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20 buyers now circling Virgin Australia

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20 buyers now circling Virgin Australia

Old 27th Jun 2020, 01:49
  #461 (permalink)  
 
Join Date: Nov 2003
Location: aus gold
Posts: 94
Originally Posted by Obie View Post
I hope I'm wrong too!
But have been there, done that, 30 yrs ago, with the pilots dispute and the Ansett debacle and Australian aviation destroyed by the Hawke labour guvmint!
In this climate no one will buy an airline with a 7 Billion dollar debt!
Surely you can all see that?
I very much doubt Bain will take on this Debt, or at least any major part of it
maxter is offline  
Old 27th Jun 2020, 02:01
  #462 (permalink)  
 
Join Date: Jul 2005
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There are potential other steps, but Deloitte will just drive the company into liquidation if the vote is no. However, Bain have covered their tracks very cleverly and will have what assets/workforce/AOC they want regardless if this is the case.

Although they sound brutal, it will be nice to be managed by people who know what they are doing for once. Domestic has always made the money in Virgin with the 737’s.

Borghetti and the board should be held accountable for their poor decisions and excessive spending. Allowing one department to rob from the other to serve their personal KPI and various bonus’s. Look at Karl from velocity abandoning ship with 8 million plus payout.

The non stop rotation of middle management and massive payouts over the last eight years, if they dare stood up to the little Hitler himself, were tossed out like garbage. Extracting millions of payouts every time.

The phrase, “JWI” - John wants it, were thrown around the head office constantly. Even though these poor decisions were bleeding the company dry for years. Who in their right mind would sign up six A330’s with five different leasing companies 80% above market value - the most expensive in the world ! Even at the start pulling two ex EK clapped out A330’s out of the desert to start, to end up releasing them out whilst virgin pays a percentage of the cost.

Scurrah’s plan so far has worked. The COVID-19 pandemic and voluntary administration gives him the tools to accelerate and undo where Borghetti and the board failed.
yigy2 is offline  
Old 27th Jun 2020, 02:04
  #463 (permalink)  
 
Join Date: Dec 2019
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I would have thought the AOC would be lost if the company is liquidated, hence that really should not be an option
Forced Labor is offline  
Old 27th Jun 2020, 02:19
  #464 (permalink)  
 
Join Date: Jul 2014
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So in the wash up..what is the general consensus on numbers out the door? QF has put Up 20%
Surely Bain would be looking at 40-50% when it looks to return with a weaker domestic capacity. 330ís and 777ís from all reports are set to go. The tiger cabin crew who remained on...what is the need for them when the 737 fleet is set to be cut back significantly.

Thoughts?
Fujiroll76 is offline  
Old 27th Jun 2020, 02:26
  #465 (permalink)  
 
Join Date: Jul 2005
Location: aus
Posts: 34
Maxter - have you not kept up on current events?

They just made a successful, legally binding bid.

It is comments like yours why I barely comment on this forum. I should not have wasted brain power trying to educate you and your other fellow pessimistic comrades what just happened. 🙄

Virgin Australia is set to be resurrected by US private equity firm Bain Capital into a leaner airline with a broader range of fares to suit economy travellers.

The Boston-based company was confirmed as the winning bidder for the debt-riddled airline on Friday, after rival Cyrus Cap*ital Partners pulled out citing a “lack of engagement” by administrator Deloitte.

Under the vision of Bain’s Australian chief executive, Mike Murphy, and Virgin Australia management, the airline will retain* the modest business-class cabin on its Boeing 737s but provide the majority of passengers in economy with more options.

These will include paying extra for more legroom or a preferre*d window seat, or less for the bare basics of a seat and carry-on luggage.

Technology will be upgraded to improve the customer experience from booking to check-in, and Velocity frequent flyer points will tick over at every opportunity, with Bain envisioning greater engagement between the airline and its 10-million-member loyalty program.

Although it will still be possible to visit a lounge before boarding for eligible travellers, Bain wants to do away with the exclusive domain of VIPs known as The Club.

There would also be no trying to persuade passengers to board new Boeing 737 Max aircraft, which remained grounded after two fatal crashes.

Mr Murphy indicated the curren*t order with Boeing for 48 new Max 8 and 10 aeroplanes would be torn up as part of the administrati*on process.

“The opportunity has to be taken to match fleet size to custom*er demand,” he said.

Bain is expected to waste no time implementing its plan, despite the sale of Virgin Australia still being reliant on an August 22 creditors’ meeting.

As well as providing upfront financ*e in excess of $100m, the cashed-up company will make a further capital injection in the vicinity of $1bn to help the airline rebuild post-COVID.

With a fleet of between 60 and 70 single-aisle Boeing 737s, Bain’s Virgin Australia will service major domestic routes and a range of regional centres.

Mr Murphy suggested *opera*tions were likely to be limited to 40-50 aircraft at the outset, to maintain a high level of reliability.

“We’re very keen to make sure we retain a healthy buffer of aircraft above consumer demand,” he said. “Demand bounces back pretty quickly, and we want to have capacity to turn back on.”

In addition to fewer aircraft, Virgin 2.0 would have a significantly reduced workforce of 5000-6000 employees, a little more than half of the pre-coronavirus number.

The majority of those would be based in Brisbane, under a $200m deal struck with the Queensland government, which would also deliver the state a “strategic equity stake”.

“Queensland is the home of aviation in Australia, and we are thrilled that our investment, a mix of equity and economic incentiv*es, has helped to secure that into the future,” Treasurer Cameron Dick said.

Unions that had previously backed Cyrus indicated they were more than willing to work with Bain, after Mr Murphy reached out to them. Flight Attendants Association of Australia secretary Teri O’Toole said the FAAA was keen to engage with Bain on behal*f of members.

The retention of the Virgin brand was another key element of Bain’s bid, ensuring the support of Virgin Group chief executive Josh Bayliss. Despite refusing to “take sides” through the administration process, he expressed his satisfaction with the result.

“Time is now of the utmost importance*, and we cannot afford delay in getting the company back in the air for the benefit of its customers, its employees and the wider Australian economy,” said Mr Bayliss.
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Old 27th Jun 2020, 02:27
  #466 (permalink)  
 
Join Date: Aug 2006
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If the creditors/bondholders (biggest value vote) vote against the DOCA in august and the employees (biggest numbers vote) vote for it then it’s a tie. The administrators then have a tie breaking vote and I think we know which way that would go and the sale will go through. Despite the ructions from a few unions who preferenced Cyrus a few weeks ago, are they now not going to vote for Bain and hence cause a liquidation and the loss of ALL the jobs, I don’t think so. The sale will go through eventually......I hope. Court action may slow the process but because of the Administration process it’s unlikely they will intervene, they haven’t much in the past. Bain is now liable for all expenses that VA incurs and they are racking up a rather large bill, after having spent millions over the last 2 months already, that shows their sincerity and so unlikely they will pull out. And yes, IF liquidated, the AOC, the slots, all the hard won (with CASA) approvals.....all gone. The slots are probably the most valuable asset and Bain only has first right to purchase them but then what would they do with them. On selling them to someone would be an option, but it won’t come to this.....again, I hope.
No Idea Either is offline  
Old 27th Jun 2020, 02:35
  #467 (permalink)  
 
Join Date: Jul 2005
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What no idea either said ✅
yigy2 is offline  
Old 27th Jun 2020, 04:03
  #468 (permalink)  
 
Join Date: Jun 2020
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Originally Posted by No Idea Either View Post
If the creditors/bondholders (biggest value vote) vote against the DOCA in august and the employees (biggest numbers vote) vote for it then itís a tie. The administrators then have a tie breaking vote and I think we know which way that would go and the sale will go through. Despite the ructions from a few unions who preferenced Cyrus a few weeks ago, are they now not going to vote for Bain and hence cause a liquidation and the loss of ALL the jobs, I donít think so. The sale will go through eventually......I hope. Court action may slow the process but because of the Administration process itís unlikely they will intervene, they havenít much in the past. Bain is now liable for all expenses that VA incurs and they are racking up a rather large bill, after having spent millions over the last 2 months already, that shows their sincerity and so unlikely they will pull out. And yes, IF liquidated, the AOC, the slots, all the hard won (with CASA) approvals.....all gone. The slots are probably the most valuable asset and Bain only has first right to purchase them but then what would they do with them. On selling them to someone would be an option, but it wonít come to this.....again, I hope.
The bond holders as a group are neither the biggest by number or value, therefore, that group alone cannot stop the DOCA.
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Old 27th Jun 2020, 08:08
  #469 (permalink)  
 
Join Date: May 2020
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Maybe a silly question, but how does Virgin Mk2 intend to fly internationally ? Being now 100% foreign owned they can't fly to international destinations. Virgin Mk 1.0 got around that by having international supposedly owned by a Australian entity which issued shares valued at virtually zero to current shareholders, a dubious outcome. But as it stands Virgin Mk 2 can't fly internationally if it 100% foreign owned.
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Old 27th Jun 2020, 11:07
  #470 (permalink)  
 
Join Date: Mar 2011
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How can they receive Job Keeper as a foreign owned company, wasnít that the issue with some of the ground suppliers ?
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Old 27th Jun 2020, 11:32
  #471 (permalink)  
 
Join Date: Jun 2020
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Originally Posted by Tubman601 View Post
How can they receive Job Keeper as a foreign owned company, wasnít that the issue with some of the ground suppliers ?
I think that issue relates to be 100% owned by a foreign government rather than a foreign entity. Happy to be wrong...
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Old 27th Jun 2020, 12:42
  #472 (permalink)  
 
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Originally Posted by Tubman601 View Post
How can they receive Job Keeper as a foreign owned company, wasnít that the issue with some of the ground suppliers ?
The issue is with companies 100% owned by a foreign government. Dnata's ownership can ultimately be traced back, through Emirates, to the UAE government.
regional_flyer is offline  
Old 27th Jun 2020, 12:58
  #473 (permalink)  
 
Join Date: Aug 2004
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Yigy2, remember I said these deals are characterised by a “flowers and chocolates”start and a “divorce court” end. Bain already know what their exit strategy is. They won’t tell you or anyone else. That’s the divorce court end. Mr. Murphy, God bless him Yigy, is giving you the “flowers and chocolates” front end, that is exactly what that article depicts.

Lets hope I’m wrong again, but I have bitter experience of the behaviour of VC’S once the ink is dry on the final agreement. It isn’t pretty.

BTW, Bain will have signed a /“heads of agreement “ if the details of what the Administrators have told them aren’t true then no deal.
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Old 27th Jun 2020, 15:10
  #474 (permalink)  
 
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I fail to see how Bain, however malignant they might be, would be any worse for employees than the liquidation of Virgin. The Enterprise Agreements in place stand legally until renegotiated. The bulk of the Head Office personnel are non EA employees so that might be where some aggressive action is taken early on. Bain will fight hard on those EAs I am sure, but if it is basically just the 737 operation going forward then there isn’t a whole lot of fat to be trimmed. They would have to go head on into T & Cs to get anything significant which they may well do, but if they start with the ‘Jetstar’ approach that’s what they will wind up with.
slice is offline  
Old 27th Jun 2020, 15:28
  #475 (permalink)  

Evertonian
 
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Originally Posted by slice View Post
I fail to see how Bain, however malignant they might be, would be any worse for employees than the liquidation of Virgin.
If they're a scam like TESNA, then the employees go through all the pain again. Lets hope they're not.
Buster Hyman is offline  
Old 27th Jun 2020, 17:55
  #476 (permalink)  
 
Join Date: Feb 2001
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Originally Posted by yigy2 View Post
From the AFAP

“We are also advised that Bain has signed an Asset Sale Agreement (“ASA”). This will provide them first option to purchase assets in the unlikely event the DOCA fails both tests (i.e. it is not supported by both a majority in value and a majority in number of the creditors). The ASA undermines any threat from bond holders or other creditors seeking to improve their position by voting down a DOCA. The administrator’s position is that one way or another the business will be sold to Bain as the preferred bidder”

So for all you doomsday flight crew wanting Virgin 2.0 to fail.

F$&k OFF !!!

The deal is done regardless if the vote is no at the creditors meeting.

Show support for you fellow aviation colleagues that will lose their career from this sale. 737 crews are the lucky ones just by chance.
Im pretty sure hardly anybody here wants anything to fail so relax. This is a forum for people to express their own opinions, telling people to 'FOFF' is a little bit inappropriate.

As for your statement above- An 'Agreement' is not a 'Contract'. If the DOCA gets voted down, the company goes into Liquidation. The Assets must be sold at 'Market Value'. What Bain might choose to do with that if thats the case, is another story.

Couple of good links if anyone is interested-

Agreement vs Contract:
https://lawpath.com.au/blog/differen...ract-agreement

Sale of Assets:
https://www.dissolve.com.au/wp-conte...info-sheet.pdf

Liquidation:
https://australiandebtsolvers.com.au...o-liquidation/

Take care.
Blackout is offline  
Old 27th Jun 2020, 22:50
  #477 (permalink)  
 
Join Date: May 2020
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... and so on Friday, the choker chain went on Paul from Lady Jayne and he'll now be just the delivery man of the changes. Put those Jocelyn's aside kids, atleast try and look busy this time.
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Old 27th Jun 2020, 23:18
  #478 (permalink)  
34R
 
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Originally Posted by slice View Post
Bain will fight hard on those EAs I am sure, but if it is basically just the 737 operation going forward then there isnít a whole lot of fat to be trimmed.
If they don't move more towards a productivity based EA then I would be staggered. You are taking the p!ss if you think there isn't any fat to be trimmed, and I don't say that as a personal attack.
I flew with many, many crew who milked every cent they could and funnily enough are now complaining the loudest about Bain's impending arrival.

Save the company.... Save your job.... Work on the rest later
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Old 27th Jun 2020, 23:39
  #479 (permalink)  
 
Join Date: Aug 2013
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.......move more towards a productivity based EA
Things that will probably change:
1. Massive reductions in crew overnights,
2. Much more roster and day of operations flexibility with associated reduction in crew numbers required - subject to CASA and FRMS. This on top of a reduction in the numbers of aircraft,
3. Base rationalisation,
4. Reductions in basic salaries, DTA, overtime conditions,
5. Less crewing/operational/administration support.

Bain (Carla) will leave no stone unturned in driving costs down to the lowest possible number. It will be a very different work environment, but you will have a job for the longer term.




Denied Justice is offline  
Old 27th Jun 2020, 23:53
  #480 (permalink)  
 
Join Date: Feb 2002
Location: NSW
Posts: 43
All of the above and Cut it to the bone in every area and it might stand a chance. Get rid of staff travel and save on FBT big time, pay Branson a pittance for the name or change it, down grade hotels and use crew buses, no more fancy HQ overheads and operate to the minimum there and make the customers number one and be on=time. Don't get off the script and use the Southwest model of one type and forget flying to USA/Japan, HK etc. Focus, focus focus.... and it all might work

Senior exec pay limited and no fancy bonuses. They need to be on contracts....
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