20 buyers now circling Virgin Australia
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Virgin headed for another disaster, says REX chairman
https://www.afr.com/companies/transp...0200506-p54qb3
“Mr Lim said Virgin's EBAs had lumbered the airline with high fixed costs and they needed to be fixed while Mr Strawbridge had the powers of an administrator and before the release of a deed of company arrangement.
"It is well known that in the last 10 years Virgin's management has been extremely lax and extremely non-courageous in their negotiations over EBAs," Mr Lim said”
"IF" VA comes back under some sort of guise they will come back in a very fragile market! The whole country has been decimated on so many fronts (forget the world) so yield will be low at least in the foreseeable future.
To make any attempt work the new "Co" will have to be a very lean operation. Now what can be cut!
Leasing? Hardly!
Maint? Nope!
Fuel? They wish!
Airways charges? Hardly!
Airport leases and associated costs? In yr dreams!
CREW/personel? Exactly!
The hunan element is the only area that can be squeezed & they will come flocking!
Interesting times ahead! If the flying game returns anywhere near pre the CV BS then it won't return for everyone!
To make any attempt work the new "Co" will have to be a very lean operation. Now what can be cut!
Leasing? Hardly!
Maint? Nope!
Fuel? They wish!
Airways charges? Hardly!
Airport leases and associated costs? In yr dreams!
CREW/personel? Exactly!
The hunan element is the only area that can be squeezed & they will come flocking!
Interesting times ahead! If the flying game returns anywhere near pre the CV BS then it won't return for everyone!
- Leases: Good chance the leases will actually be cheaper - and if the leasors dont come to the party in any new business, they can have their aircraft back, because all won’t be required. And as an aircraft owner, you would not want to own second hand jets at the moment.
- Fuel: Not sure if you have seen the price of oil at the moment. But in a soft economy, that price of fuel isn’t going up in a hurry any time soon.
- Maintenance: You’re quite possibly right here. But less flying means less maintenance overheads.
- Airport leases: Yup fair enough.
- Staff wages: Again you are probably right. Having said that, if the airline is sold as a going concern, all employee EAs remain in force. That of course doesn’t stop a new owner from shrinking the workforce, or unions negotiating with new owners to keep more people employed but on lower Ts and Cs.
Very simplistically airline costs are 1/3 fuel, 1/3 employee costs and 1/3 fixed overheads. Those fixed overheads also include real estate leases etc etc. All of which you’d expect to be up for renegotiation.
This certainly doesn’t mean things will be fine and beaut. Obviously things aren’t going to be great at Virgin for quite a while. To start from an almost $0 revenue position is going to be very very difficult.
Once travel restrictions are lifted, I am planning on being on 50% salary for 12-18 months. From that point who knows - but any serious buyer of VA would (you would hope) understand the market they are getting themselves into. And assuming it’s not bought by private equity with the intention of chopping it up, or flicking it in 3 years time, within the medium term, it COULD be a profitable business.
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To make any attempt work the new "Co" will have to be a very lean operation. Now what can be cut!
Leasing? Hardly!
Maint? Nope!
Fuel? They wish!
Airways charges? Hardly!
Airport leases and associated costs? In yr dreams!
CREW/personel? Exactly!
The hunan element is the only area that can be squeezed & they will come flocking!
Leasing? Hardly!
Maint? Nope!
Fuel? They wish!
Airways charges? Hardly!
Airport leases and associated costs? In yr dreams!
CREW/personel? Exactly!
The hunan element is the only area that can be squeezed & they will come flocking!
For airports it's a bit trickier because most airports are monopolies in their city, but still possible because the administrator only needs a majority of creditors to agree to their plan - they can say "Agree to a discount now, or we'll cancel the contract and you can try to renegotiate it in an environment where your terminals are half empty and VA only needs two thirds of the floor space."
Obviously, maintenance activities can't easily be cut. But there may be savings to be had on parts and labour. There'll be a glut of parts, and a lot of MRO shops hunting for business
Fuel and charges - agreed.
Also, don't forget all of the other supplier costs - catering, uniforms, cleaning etc. All of that is up for negotiation too.
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It's only my take on it, nobody knows for sure how and even if VA will come back. The 'human' element covers most of the day to day operations not just the guys at the pointy end.
Fuel will get more expensive once the thruput goes up in fact 'if' normality returns then everything cost wise will rapidly increase, just not wages, that's the bit that can be 'fiddled' with. Bit like'89 that was a turning point in aviation as far as conditions go so will this disaster!
Fuel will get more expensive once the thruput goes up in fact 'if' normality returns then everything cost wise will rapidly increase, just not wages, that's the bit that can be 'fiddled' with. Bit like'89 that was a turning point in aviation as far as conditions go so will this disaster!
I don’t envy JQ pilots having to essentially restart negotiations in the current climate.
And I certainly don’t envy VA pilots who’ll be no doubt asked to take pay cuts to save jobs, and even then you’d have to question whether or not it will be enough to save all jobs.
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Agreed about the Qantas LH EBA. Very lucky indeed. If a NO vote won the subsequent negotiations would have been a blood bath.
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Notice to virgin australia noteholders
The following extracts ex the Deloitte/Virgin webpage (https://www2.deloitte.com/au/en/page...sidiaries.html) and the Administrators correspondence to "Unsecured Noteholders" of 06 May:
And:
The 'margin' is interesting ('I' thought ???), given the times relative to the broader economy and global rate cutting/quantitative easing etc. by Central Banks of recent years. Be a tough 'Gig' chairing/running this 'consultative process'................, I would have thought.
Rgds
S28- BE
'SEEKING EXPRESSIONS OF INTEREST IN RESPECT OF NOTEHOLDER CONSULTATIVE COMMITTEE'
'We also refer to the following notes issued by Virgin Australia Holdings Limited:
- USD350M 7.875% unsecured senior notes due 2021.
- AUD150M 8.25% unsecured fixed rate notes due 2023.
- AUD250M 8.075% unsecured fixed rate notes due 2024
- USD425M 8.125% unsecured senior notes due 2024
- AUD325M 8% unsecured senior notes due 2024
Rgds
S28- BE
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The following extracts ex the Deloitte/Virgin webpage (https://www2.deloitte.com/au/en/page...sidiaries.html) and the Administrators correspondence to "Unsecured Noteholders" of 06 May:
And:
The 'margin' is interesting ('I' thought ???), given the times relative to the broader economy and global rate cutting/quantitative easing etc. by Central Banks of recent years. Be a tough 'Gig' chairing/running this 'consultative process'................, I would have thought.
Rgds
S28- BE
And:
The 'margin' is interesting ('I' thought ???), given the times relative to the broader economy and global rate cutting/quantitative easing etc. by Central Banks of recent years. Be a tough 'Gig' chairing/running this 'consultative process'................, I would have thought.
Rgds
S28- BE
When will people understand that the system is rigged.
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If the chest beating PIA hadn't taken place an agreement may well have been reached before the C19 shutdown. There will probably be a wage freeze for at least two years and no back pay when an agreement is signed. Whats the bet that single sector BOC will be no longer rostered.
I'm sorry to see him go.
It will be impossible for him to post under a new user name, without being instantly recognisable.
He has had a great deal of grief to deal with, that may have coloured his postings at times. But he does have more professional experience than most of you will give him credit for. You lot love to think because you've got an ATPL and a jet command or right seat that you're experts in everything else. It's the Type A pilot way.
I don't know him, I know of him and I know his qualifications through a few sources. I reckon he'd be an interesting dude to have a beer with.
And why the **** not can a bloke in his 70's have a chat about his travels, whether they're first, business or economy, he's earned it. If you see this is as rubbing your nose in it, you're a bit fragile.
It will be impossible for him to post under a new user name, without being instantly recognisable.
He has had a great deal of grief to deal with, that may have coloured his postings at times. But he does have more professional experience than most of you will give him credit for. You lot love to think because you've got an ATPL and a jet command or right seat that you're experts in everything else. It's the Type A pilot way.
I don't know him, I know of him and I know his qualifications through a few sources. I reckon he'd be an interesting dude to have a beer with.
And why the **** not can a bloke in his 70's have a chat about his travels, whether they're first, business or economy, he's earned it. If you see this is as rubbing your nose in it, you're a bit fragile.
QF Pilots have a strong company and a strong union, they are likely to be able to maintain their T&Cs unless the company is still experiencing heavy losses in 6-12 months time. Obviously their Pilots will be earning less as flying pay, overtime, duty allowances, night stop allowances etc will down due to less flying, but the basic structure should still be intact.
A new pay deal will be high up on the list of any potential purchaser of VA, who will want to know the exact running costs of the new entity. No one will agree to buy and start enterprise bargaining with the workforce once they take over. A 2 year agreement on similar terms to JQ is likely to be on the table and needs to be signed off before any sale goes through.
A new pay deal will be high up on the list of any potential purchaser of VA, who will want to know the exact running costs of the new entity. No one will agree to buy and start enterprise bargaining with the workforce once they take over. A 2 year agreement on similar terms to JQ is likely to be on the table and needs to be signed off before any sale goes through.
and the administrator has the power to cancel contracts, which means they can credibly say to lessors, "You can keep your lease, at an X% discount, or we'll cancel it and talk to the other lessors."
The administrators cannot wave a magic wand to make debt disappear. If enough creditors agree they can force liquidation.
Very educational to read thu this thread. Only have a PHD in the School of Life.
Sorry about Suuny, At least he was correct about the regulator we have. We can blame ourselves for that...never united enough to tell CAsA to Foxtrot Oscar. Altho I see of recent times that Phil Hurst has the cajones to tell ;em their latest brain fart is crap.
Some laughs along the thread way too , but top marks go to Junior for the Downfall exerpt. A winner !!
Best belly cackle for years Thanks.
Sorry about Suuny, At least he was correct about the regulator we have. We can blame ourselves for that...never united enough to tell CAsA to Foxtrot Oscar. Altho I see of recent times that Phil Hurst has the cajones to tell ;em their latest brain fart is crap.
Some laughs along the thread way too , but top marks go to Junior for the Downfall exerpt. A winner !!
Best belly cackle for years Thanks.
Krismiler, I hope you are right regarding Qantas but I don’t see how? The PM today just said international travel is not even on the radar and jobkeeper runs until October I think. Using AirNZ /BA as an example everyone is going to have to take a hit, it is just a matter of how many and how much. Anything else just isn’t plausible in the short term. The same for VA if it comes back no doubt at all.
Last edited by ozbiggles; 8th May 2020 at 06:05.
Your opinion matters to me angryrat!
I’m slightly confused but I will work on it!
On the positive side at least there will be some bumper tax returns in Jul 2020 and 21
I’m slightly confused but I will work on it!
On the positive side at least there will be some bumper tax returns in Jul 2020 and 21
A new pay deal will be high up on the list of any potential purchaser of VA, who will want to know the exact running costs of the new entity. No one will agree to buy and start enterprise bargaining with the workforce once they take over. A 2 year agreement on similar terms to JQ is likely to be on the table and needs to be signed off before any sale goes through.
Any purchaser is in a much stronger negotiating position before a sale goes through as he can always threaten to pull out if he doesn't get what he wants. Once the sale is finalised, the employees position becomes more equal as money has been committed and laws governing workplace rights come into play.
The buyer of VA would be crazy not to take full advantage and insist on a comprehensive pay agreement being in place prior to signing on the dotted line.
The buyer of VA would be crazy not to take full advantage and insist on a comprehensive pay agreement being in place prior to signing on the dotted line.
As posted on another thread….
The most recent basic Pilot's award as published by Fair Work.
Let's hope it doesn't come to this…...
The most recent basic Pilot's award as published by Fair Work.
Let's hope it doesn't come to this…...