Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

20 buyers now circling Virgin Australia

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

20 buyers now circling Virgin Australia

Old 28th Aug 2020, 13:51
  #1061 (permalink)  
 
Join Date: Feb 2001
Posts: 214
There is lots of defence in that report. Cause for concern? Only Preliminary??

Blackout is offline  
Old 28th Aug 2020, 21:29
  #1062 (permalink)  
 
Join Date: Aug 2004
Location: Melbourne, Australia
Posts: 8,428
Mick, thank you for your comment:
And let's just draw a line under this 'it was the employees' money' nonsense. It wasn't. To the extent that the business's remaining cash was anyone's it was the secured creditors. The employees' claim on the business's money is always subordinated to the secured creditors.
I refer you toDeloittes own words:
"Cash at bank on appointment and pre-appointment debtors are classified as circulating assets, and as discussed in section 3.4.4, employees have a priority to be paid out of realisations of circulating assets ahead of secured and unsecured creditors.
Deloittes made a decision.

Furthermore and with respect, I never said Deloittes did anything criminal. However whether what they did was in the best interests of employees, as opposed to other creditors, is another matter.

I also note that as reported this morning, Deloitte is threatening staff with the loss of jobkeeper payments if they don’t approve DOCA.

https://www.theage.com.au/business/c...28-p55qd6.html

‘’You are going to see more of this crap - brutal and ruthless and I suspect you are going to see much more of the same to a level that I don’t even want to talk about.

‘’What comes next? The demise of Scurragh as the new Board focuses exclusively on “exit day” a few years from now, hence there will be no long term planning past that date.

Last edited by Sunfish; 28th Aug 2020 at 21:46.
Sunfish is offline  
Old 28th Aug 2020, 22:34
  #1063 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 270
Originally Posted by Sunfish View Post
I also note that as reported this morning, Deloitte is threatening staff with the loss of jobkeeper payments if they don’t approve DOCA.
Sunfish, how is it 'threatening staff' to point out the very simple practicalities of the choices ahead of them?

Sale of the business to Bain via a DOCA preserves the existing business and therefore preserves associations with it, such as the AOCs and, importantly for stood down employees, the employee's entitlement to JobKeeper. Those preservations are the reason for preferring a DOCA as the transfer mechanism over a straight asset sale.

You may recall that when JobKeeper was established one of the safeguards to prevent rorting was that businesses registering for it had to have been in existence and employing staff as of 1 March 2020 in order to be eligible. They also had to demonstrate a decline in revenue due to the coronavirus restrictions.

The administrator was pointing out that if the transfer of the business to Bain is not effected under the DOCA then it will occur via an asset sale. An asset sale would mean that a new business entity is created and employment would transfer to that new entity. That would immediately cause an issue for employee entitlements to JobKeeper.

Would you prefer that the staff just be kept in the dark about that sort of stuff?

Originally Posted by Sunfish View Post
’What comes next? The demise of Scurragh ...
His name is Scurrah, no 'g'. And frankly how would his departure be a bad thing?

The bloke had virtually zero airline experience when he came into the job and he then demonstrated an abject inability to get anything meaningfully positive accomplished once he was there. His much talked about 750 headcount 'rightsizing' is as good an example as any of the bloke's inability to get things done. Announced in August last year, and meant to have been completed by last Christmas, come February this year only 140 people had gone. That rightsizing was the business's most significant cost control measure so you'd think that it might have warranted management's attention.

More recently we had his 13 March 'The Group currently has a cash position in excess of $1 billion' pronouncement that turns out to have been a case of providing materially false or misleading information to the ASX in breach of Listing Rule 3.1 and in breach of Section 1309 of the Corporations Act 2001. And we now know that on the day that the administrator has determined the business probably slipped into insolvency, Scurrah was telling the market that 'We are well positioned to weather this storm.' The bloke ran a business that was insolvent for a month without realising it.

Yesterday he was opining that one of the business's big problems is a lack of consistency in partner airline offerings! From yesterday's The Australian article,

One thing that’s been made very clear to us is we need a more consistent level of service across us and our partners so that people know what to expect when they get on a partner airline,” said Mr Scurrah.“It’s been pretty good but it would be different what you got on Singapore Airlines as opposed to what you got on Delta. We want to make sure that’s more consistent
Seriously?! This is what is occupying this bloke's attention at this time?

Frankly, if he's not 'spending more time with his family' by Christmas I'd be very surprised.

Last edited by MickG0105; 28th Aug 2020 at 23:09. Reason: Added CEO commentary
MickG0105 is offline  
Old 28th Aug 2020, 23:03
  #1064 (permalink)  
 
Join Date: Aug 2004
Location: Melbourne, Australia
Posts: 8,428
Mick, thank you for your reply.

I label this a threat because Deloitte allegedly used the word “May” in the video.

Under an asset sale... the employment of staff will transfer to a new entity or company, and that new entity may not be eligible for JobKeeper," Mr Strawbridge said in the video.
To me, that is a direct threat. I note the Commonwealth is silent on this ATM, however we already know Deloitte has been talking to Canberra. Such an issue would depend on how an asset sale was structured. I don’t think Bain and Deloitte would like to see their potential workforce evaporate just yet.


Sunfish is offline  
Old 28th Aug 2020, 23:15
  #1065 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 145
Originally Posted by Blackout View Post
What are you getting at Chook>?
basically your entire post is rubbish.
chookcooker is offline  
Old 28th Aug 2020, 23:18
  #1066 (permalink)  
 
Join Date: Sep 2002
Location: Australia
Posts: 749
Originally Posted by Sunfish View Post
Mick, thank you for your reply.

I label this a threat because Deloitte allegedly used the word “May” in the video.



To me, that is a direct threat. I note the Commonwealth is silent on this ATM, however we already know Deloitte has been talking to Canberra. Such an issue would depend on how an asset sale was structured. I don’t think Bain and Deloitte would like to see their potential workforce evaporate just yet.
I still don’t see how it’s a threat.
Isn’t he just being honest about the potential consequences if the DOCA doesn’t get approved?
The Bullwinkle is offline  
Old 28th Aug 2020, 23:21
  #1067 (permalink)  
 
Join Date: Jun 2020
Location: Melbourne
Posts: 53
Yes, Strawbridge said ‘may not be eligible for Jobkeeper’ I took it as finally getting some accurate information from the source rather than seeing it written in the paper first.
Boeingpilot738 is offline  
Old 28th Aug 2020, 23:23
  #1068 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 270
Originally Posted by non_state_actor View Post
So why are Deloitte defensive of the Board in the creditor's report? I would have thought if it was that bad then the Board should have the book thrown at them. It reads a bit like Deloitte think they got a bit unlucky. The real financial situation would have been well known at the high levels for years and once Covid turned up surely the first question as a Board Member would be "are we insolvent"? Sure it came undone quickly but they have had many years of losses it wasn't like the financial situation came out of nowhere. Don't they run "stress tests" on the financials in these large operations?
I suspect that Deloitte are taking the view that it's not their job to prosecute the Board (it might be seen as a negative in getting further VA work).

But it is a fairly telling indictment of the management of that joint that they blithely traded insolvent for a month before the Board made the 'courageous' decision to go into voluntary administration. There appears to have been just an appalling lack of financial analysis and reporting. But, in typical Virgin fashion, none of that basic business stuff seemed to matter so long as they 'significantly outperform on culture'.

It would be interesting to re-run that Four Corners story knowing what we know now.
MickG0105 is offline  
Old 28th Aug 2020, 23:32
  #1069 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 270
Originally Posted by Sunfish View Post
Mick, thank you for your reply.

I label this a threat because Deloitte allegedly used the word “May” in the video.



To me, that is a direct threat. I note the Commonwealth is silent on this ATM, however we already know Deloitte has been talking to Canberra. Such an issue would depend on how an asset sale was structured. I don’t think Bain and Deloitte would like to see their potential workforce evaporate just yet.
Okey doke, thanks for that explanation. You can possibly understand that not everybody would construe that language as being threatening.
MickG0105 is offline  
Old 28th Aug 2020, 23:47
  #1070 (permalink)  
 
Join Date: Aug 2009
Location: Australia
Posts: 476
The bloke had virtually zero airline experience when he came into the job

Well, that is incorrect. Just over seven years combined Qantas and Ansett and a short tenure as part of Rex start-up. Anyway - having depth in the industry does not determine success. What determines success is having good (and smart) people around you and being able to make well-informed and smart decisions.
T-Vasis is offline  
Old 29th Aug 2020, 00:25
  #1071 (permalink)  
 
Join Date: Feb 2001
Posts: 214
Originally Posted by chookcooker View Post
basically your entire post is rubbish.
Well Chookcooked,

I was going to write a response for you before, but then I realised I dont really like your tone sometimes mate. So I ended up deleting it. Thought maybe your capable of figuring it out for yourself.

But anyhow, since I feel like helping you out a little today, I'll add the reasons behind my post:

A) when exactly should it have “legally” been liquidated?

Firstly, I said probably, not should of.

https://australiandebtsolvers.com.au/research-centre/a-guide-to-liquidation/

Why should a business go into liquidation?

There are numerous reasons why liquidation is chosen as the method to cease the existence of a company, including:
  • The assets of the company will be distributed equally among creditors.
  • The cost to the community in having insolvent companies trading is reduced.
  • A dormant company can be deregistered.
  • Enables a check and balance on directors and shareholders. Liquidation ensures an independent investigation into the affairs of the company and gives creditors the opportunity to receive compensation.
B) Employees get 100% in both the DOCA and, failing that, the Asset Sale Agreement.

Im not arguing that. But 100% of what exactly? If you get made redundant NOW, there is no problem, you get your FULL ENTITLEMENTS on the CURRENT award.

C) Why would they lose 80% under a new EA? Are you suggesting new terms would be 20% the current terms? So $60k a year for a 737 captain??

Part Time wages. Roughly @ 20-25% INITIALLY during ramp up. Who knows what their plan is, or what the new EA will look like, Im just giving food for thought. They want to pay by the hour from what I heard.

What redundancy pay is payable?

Employees receive redundancy pay based on their continuous period of service with their employer. This amount is paid at the employee's base pay rate for ordinary hours worked.

An employee's base rate of pay (other than a pieceworker) is the pay rate they receive for working their ordinary hours, but does not include the following:
  • incentive-based payment and bonuses
  • loadings
  • monetary allowances
  • overtime or penalty rates
  • any other separately identifiable amounts.

D) Why didn’t you answer Mick above, when he said “Well, buddy, if it's not an error, what is your explanation for how a document dated the 15th includes a reference to another document dated the 16th? Time travel?”
not convenient? Or was it too convenient?

I think you should look after yourself.

​​​​​​​Have a good one !
Blackout is offline  
Old 29th Aug 2020, 01:20
  #1072 (permalink)  
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 270
Originally Posted by T-Vasis View Post
Well, that is incorrect. Just over seven years combined Qantas and Ansett and a short tenure as part of Rex start-up.
Fair point. I should have said 'virtually zero airline experience in the current century'.

Originally Posted by T-Vasis View Post
Anyway - having depth in the industry does not determine success. What determines success is having good (and smart) people around you and being able to make well-informed and smart decisions.
Okey doke, so let's apply those metrics of success.

Having good and smart people around you and being able to make well-informed and smart decisions. How do you reckon he scores on that?

Exhibit A. He brought back Keith Neate as CFO. Within three months of Neate's return to the business they had racked up $995.7 million in debt (the $325 million Australian bonds issue on 26 November and the $670.7 million ($US 425 million) US bonds issue on 7 November). They used $711.1 million of that to fund the Velocity re-acquisition transaction; paying $700 million to buy back 35 per cent of the business that was sold in 2014 for $335 million. Leaving aside the fact that the re-acquisition itself would take at least six years to break even, that transaction and the associated debt raising comprehensively tanked the balance sheet - the business had negative net equity. It was the equivalent of selling not only your final, contingency and alternate reserves but a bit of your trip fuel to boot.

Exhibit B - the rightsizing fiasco. The business's most significant cost control measure that two months after its nominated completion date had failed to achieve 20 per cent of its targeted savings.

Exhibit C - being essentially clueless on the actual financial status of his business. Again, his appointee as CFO was apparently incapable of discerning that the business they were running was insolvent. It's bad enough that that happened at all but the fact that they traded insolvent for three weeks past a month end is pretty much inexcusable.

If you wanted to pick over the bones you could probably add Exhibit D - the Haneda strategy to the list. We'll never know whether swapping out Hong Kong for Haneda would have been a successful play for international or not but there was always a certain lack of logic to moving from one tightly contested route with two direct competitors to a similarly tightly contested route with three direct competitors.

I have no doubt that the current CEO is popular but that's most assuredly not the same as being competent.

Last edited by MickG0105; 29th Aug 2020 at 01:22. Reason: Typo
MickG0105 is offline  
Old 29th Aug 2020, 01:38
  #1073 (permalink)  
 
Join Date: Feb 2001
Posts: 214
Originally Posted by chookcooker View Post
a) no you said “”Liquidated when legally, it probably should of been” It’s been sold as a going concern, which is pretty much proof that at no point up until now it should ever have simply been liquidated.



b) and c) redundancy payout isn’t based on ramp up MOU terms. It’s in the bit you quoted “ordinary hours worked” of which a Memorandum if Understanding clearly isn’t “ordinary”
any new EA has to be agreed to and will take time.

You quite clearly have been expecting the “shit to hit the fan” for a while now. And looks like you’re still hoping/waiting.

so I’ll stand by my original observation thanks.
Feel free to ignore me too like you did Mick when it became convenient.

HAHA ok Chook,

I'm not waiting for the shit to hit the fan... From what I see!

EA's dont have to be agreed too.

Take care mate


Blackout is offline  
Old 29th Aug 2020, 01:54
  #1074 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 145
Originally Posted by Blackout View Post
HAHA ok Chook,

I'm not waiting for the shit to hit the fan... From what I see!

EA's dont have to be agreed too.

Take care mate

ha ha
what’s the “A” in EA then matey??
its like you can’t help posting rubbish
chookcooker is offline  
Old 29th Aug 2020, 02:00
  #1075 (permalink)  
 
Join Date: Jun 2020
Location: Melbourne
Posts: 53
Originally Posted by chookcooker View Post
ha ha
what’s the “A” in EA then matey??
its like you can’t help posting rubbish
I suspect the ‘A’ in agreement will be much like the vote on the DOCA, it won’t be a choice.
Boeingpilot738 is offline  
Old 29th Aug 2020, 02:15
  #1076 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 145
Originally Posted by Boeingpilot738 View Post
I suspect the ‘A’ in agreement will be much like the vote on the DOCA, it won’t be a choice.
maybe. Maybe not, it’s still an agreement.
it’s also crystal balling and a touch of hysteria.

question: if big bad Bains cunning plan is to move 737 pilots onto pt25 to then only pay 25% redundancy, why aren’t they doing that with the wide body crew???why are they allowing any early retirement or VR on the narrow body at current rates, when according to some, it will be 25% of that in a few months time.
Are the being generous? That doesn’t suit the narrative.

Answer is that it’s not that easy despite what some might think.


Last edited by chookcooker; 29th Aug 2020 at 02:46.
chookcooker is offline  
Old 29th Aug 2020, 02:18
  #1077 (permalink)  
 
Join Date: Feb 2001
Posts: 214
Originally Posted by chookcooker View Post
ha ha
what’s the “A” in EA then matey??
its like you can’t help posting rubbish
Whats the A in HAHA matey?

Ever heard of the FWC?

Are you just here to piss people off?? Ive noticed your attitude, and how you get all angry, post shit, then delete it. And thats just not with me!

Although, I have nothing against you.

Its a nice day outside. Go for a walk .



Blackout is offline  
Old 29th Aug 2020, 02:44
  #1078 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 145
Originally Posted by Blackout View Post
Whats the A in HAHA matey?

Ever heard of the FWC?

Are you just here to piss people off?? Ive noticed your attitude, and how you get all angry, post shit, then delete it. And thats just not with me!

Although, I have nothing against you.

Its a nice day outside. Go for a walk .

Quite ironically I deleted the post because I was heading out on a walk and thought i thought it needed additional context. Regardless, you quoted it so it’s easy for me to paste:

“Originally Posted by chookcooker
a) no you said “”Liquidated when legally, it probably should of been” It’s been sold as a going concern, which is pretty much proof that at no point up until now it should ever have simply been liquidated.



b) and c) redundancy payout isn’t based on ramp up MOU terms. It’s in the bit you quoted “ordinary hours worked” of which a Memorandum if Understanding clearly isn’t “ordinary”
any new EA has to be agreed to and will take time.

You quite clearly have been expecting the “shit to hit the fan” for a while now. And looks like you’re still hoping/waiting.

so I’ll stand by my original observation thanks.
Feel free to ignore me too like you did Mick when it became convenient.”



Not sure what in the above you somehow construe as me “getting all angry”

Perhaps you should take some of your own advice.

chookcooker is offline  
Old 29th Aug 2020, 02:48
  #1079 (permalink)  
 
Join Date: Feb 2001
Posts: 214
Originally Posted by chookcooker View Post
Quite ironically I deleted the post because I was heading out on a walk and thought i thought it needed additional context. Regardless, you quoted it so it’s easy for me to paste:

“Originally Posted by chookcooker
a) no you said “”Liquidated when legally, it probably should of been” It’s been sold as a going concern, which is pretty much proof that at no point up until now it should ever have simply been liquidated.



b) and c) redundancy payout isn’t based on ramp up MOU terms. It’s in the bit you quoted “ordinary hours worked” of which a Memorandum if Understanding clearly isn’t “ordinary”
any new EA has to be agreed to and will take time.

You quite clearly have been expecting the “shit to hit the fan” for a while now. And looks like you’re still hoping/waiting.

so I’ll stand by my original observation thanks.
Feel free to ignore me too like you did Mick when it became convenient.”



Not sure what in the above you somehow construe as me “getting all angry”

Perhaps you should take some of your own advice.
I LOVE YOU CHOOK
Blackout is offline  
Old 29th Aug 2020, 03:11
  #1080 (permalink)  
 
Join Date: Jun 2020
Location: Melbourne
Posts: 53
Originally Posted by chookcooker View Post
maybe. Maybe not, it’s still an agreement.
it’s also crystal balling and a touch of hysteria.

question: if big bad Bains cunning plan is to move 737 pilots onto pt25 to then only pay 25% redundancy, why aren’t they doing that with the wide body crew???why are they allowing any early retirement or VR on the narrow body at current rates, when according to some, it will be 25% of that in a few months time.
Are the being generous? That doesn’t suit the narrative.

Answer is that it’s not that easy despite what some might think.
I’m not buying into hysteria but you really think when it’s put out for vote there won’t be a “the alternative to this agreement not being voted up is.....” statement? What’s in it is indeed crystal balling but the process will no doubt be something along those lines.
Boeingpilot738 is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.