20 buyers now circling Virgin Australia
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Virgin Australia final two bidders: Bain and Cyrus
Bain and Cyrus "are the dual and duelling finalists in line to buy Virgin Australia for up to $4 billion". BGH bundled out, in a surprise move.
https://www.executivetraveller.com/n...lia-bain-cyrus
From what I've read, Bain wants Virgin 2.0 to be more 'hybrid' while Cyrus is closer to the Scurrah's own plans to remain full-service and also swap the A330s and B777s for B787s down the track.
https://www.executivetraveller.com/n...lia-bain-cyrus
From what I've read, Bain wants Virgin 2.0 to be more 'hybrid' while Cyrus is closer to the Scurrah's own plans to remain full-service and also swap the A330s and B777s for B787s down the track.
Last edited by MelbourneFlyer; 2nd Jun 2020 at 07:35.
Evertonian
Sir Richard Branson's Virgin Group has held discussions with both Bain and Cyrus is understood to be ready to support the winning consortium with a cash injection to help recapitalise the airline, along with dropping or steeply discounting his annual $15 million Virgin brand franchising fee at least over the next few years until the airline is back on its feet and back in the air.
off!
I hope for the hard working loyal employees' sake that Bain and Jayne don't win. But at least it will be fun boys and girls. Free FA singing lessons start next week.
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Is it permissible for the winning bidder to change the name of the airline?
I would be quite certain that the airlines patronage had nothing to do with the name painted on the aircraft.
How is it financially jusitfiable for a new owner to pay million's of dollars a year for naming rights for a business that has rarely ever made a profit?
It makes no sense that Branson keeps getting money for nothing.
I would be quite certain that the airlines patronage had nothing to do with the name painted on the aircraft.
How is it financially jusitfiable for a new owner to pay million's of dollars a year for naming rights for a business that has rarely ever made a profit?
It makes no sense that Branson keeps getting money for nothing.
As far as the business never making a profit goes...You can blame the 'look at my new Maserati' whilst I do the Captain Concordia shuffle for that!
The current CEO Paul, had the airline back on track and trending well before all this Covid business broke out.
L.B
Last edited by "Littlebird"; 2nd Jun 2020 at 13:47.
Interesting point....my understanding was originally Branson was paid royalties as a percentage of REVENUE. This was then re-negotiated as a flat fee. You would think any deal would, as you said above, would make any payments as a percentage of profit.
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If you look at it from a minimum entry cost perspective, it will be much cheaper to pay a royalty then spend millions on re-branding. So, I reckon the name will stay for the time being, but the basis of royalties payable will be re-negotiated.
Here's an inventory of CEO Paul's achievements as at 31 December 2019,
- Paid $700 million for 35 percent of Velocity that had been sold five years earlier for $355 million.
- Funded the Velocity transaction entirely by raising debt; a $750 million notes issue at 8 percent interest.
- In just that single transaction managed to send the net equity of the business underwater (liabilities exceeding assets) to the tune of over $100 million.
- Allowed non-fuel operating costs to go up by over four percent when the business was meant to be cost cutting.
- Saw labour costs go up by 6.5 percent in the course of a 'rightsizing' program that should have been decreasing them by 5.5 percent.
- Knocked nearly 40 percent off the profitability of the domestic operation.
- Managed to spend $2.70 for every dollar of extra revenue gained.
- As noted earlier, delivered the worst half-year result since the GFC that included a 42 percent reduction in EBIT margin.
Last edited by MickG0105; 2nd Jun 2020 at 23:55. Reason: Correction
Interesting that for the last number of weeks PS has been talking up the Administration and everything would be ok, come out the other end in one piece, but stronger.
Latest post now says that there is no doubt the airline will be coming out the other sidea lot smaller (smaller than before) and staff should be prepared for job losses. Would seem all the wonderous support replies and thanks have dried up. Certainly didnt see any....................
When the music stops, I probably wont have a chair.
Latest post now says that there is no doubt the airline will be coming out the other side
When the music stops, I probably wont have a chair.
Last edited by Servo; 2nd Jun 2020 at 23:48.
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Guys, it doesn't matter whether you like the grinning woolly jumper or not, if he is in the successful bid, he is in.
It would be unusual if either bidder kept the current management team.
It would be unusual if either bidder kept the current management team.
Interesting that for the last number of weeks PS has been talking up the Administration and everything would be ok, come out the other end in one piece, but stronger.
Latest post now says that there is no doubt the airline will be coming out the other side a lot smaller and staff should be prepared for job losses. Would seem all the wonderous support replies and thanks have dried up. Certainly didnt see any....................
When the music stops, I probably wont have a chair.
Latest post now says that there is no doubt the airline will be coming out the other side a lot smaller and staff should be prepared for job losses. Would seem all the wonderous support replies and thanks have dried up. Certainly didnt see any....................
When the music stops, I probably wont have a chair.
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You would think any deal would, as you said above, would make any payments as a percentage of profit.
The franchisor provides a name, business system and goodwill. The franchisee takes the business risk.
$15 mill for Virgin Australia is probably reasonable as franchises go.
Franchise fees are normally either a fixed sum, percentage of turn over or combination of both.
The franchisor provides a name, business system and goodwill. The franchisee takes the business risk.
$15 mill for Virgin Australia is probably reasonable as franchises go.
The franchisor provides a name, business system and goodwill. The franchisee takes the business risk.
$15 mill for Virgin Australia is probably reasonable as franchises go.
The main thing keeping Branson at the table at the moment is the confluence of the one-off cost of rebranding (it'd likely be $8-12 million just to repaint the fleet) and the typically short term focus of new investors. Just back-of-the-napkin, assuming no leakage on loyalty, ditching Branson and rebranding would only become NPV positive on a 3-4+ year investment horizon.
Evertonian
