20 buyers now circling Virgin Australia
Evertonian
We were going to be left 'high & dry' regardless. It was a opportunistic asset grab that parked the staff in Queenscross & the assets in Tesna so they were protected. We have SYD Airport to thank for saving us from more pain.
The only experience I have is what I saw and went through during the Ansett administration. Just to be clear Ansett didn't just suddenly stop flying, it was in administration for 5 months flying a limited service with the support of the ACTU. So the unions were well and truly represented during the whole period when KM were negotiating the sale to Fox and Lew. Lindsay Fox in particular was very chummy with the unions through his association with Bill Kelty. At the end of the day it didn't matter and the employees and the unions were left high and dry when the people with the money decided at literally the last minute to not proceed with the purchase.
My advise to any Virgin employee is not to put your faith in the union to secure the deal despite what they say because they can't force Bain or Cyrus to buy the airline if at the last minute they choose not to. The most devastating statement I heard during the whole Ansett debacle was Greg Combet on the news stating "There are no jobs to be saved at Ansett.".
My advise to any Virgin employee is not to put your faith in the union to secure the deal despite what they say because they can't force Bain or Cyrus to buy the airline if at the last minute they choose not to. The most devastating statement I heard during the whole Ansett debacle was Greg Combet on the news stating "There are no jobs to be saved at Ansett.".
In retrospect that lack of interest is sort of interesting in that Ansett's balance sheet was actually better than Virgin's. In today's dollars Ansett was carrying about $5.2 billion in debt and liabilities against $5.9 billion in assets for a net equity position of around $700 million. Virgin is carrying $6.9 billion in debt and liabilities against about $5.8 billion in assets to be underwater to the tune of $1.1 billion. Now, you can make the argument that the new accounting standard, AASB 16, means that aircraft lease liabilities are treated differently to how they were back in 2001, but even when you back that treatment out of the Virgin numbers you're still left with essentially zero equity.
There were clearly some operational issues for Ansett (think B767s) that Virgin doesn't have but the business should have been salvageable. Of course, probably the key difference between the two situations is that back then you had no other than Virgin Blue looking to slot into the spaces that Ansett was vacating. That's not a factor this time around.
Any old how, back then there was no choice between competing bids, competing business models and potentially different outcomes for the staff. Once Lindsay and Solly realised that they weren't going to get their hands on the Sydney terminal they quickly lost interest and that, as she wrote, was that. The unions being matey with Lindsay meant nothing at the end of the day because they were never presented with the opportunity to have a say in proceedings.
I disagree Buster but that is irrelevant. If you are a Virgin employee Mick then I can understand your optimism but there is a significant difference between VB's situation and Ansett. When Ansett was in administration there was a market and an economy that was part of the 29 years of continuous growth. Virgin has neither to try and recover in.As for no other competition QF has that sewn up with mainline looking after the premium end and Jetstar looking after the LC end. As for the 767 you can substitute the 330's in that section of the case study. Small fleet and maintenance intensive. Lets look at the similarities. Massive debt, taking on both ends of the market with a cost base that doesn't compete with either and the big one, not profitable. Wishful thinking is understandable but it will be an extraordinary chain of events that will make this result in a different outcome to March 2002.
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ex the SMH: Qantas and Virgin Australia suspend remaining international flights.....
Link/Reference here: https://www.smh.com.au/business/comp....html#comments
Extract here:
Rgds all
S28- BE
Extract here:
Qantas and Virgin Australia suspend remaining international flights
Qantas and Virgin Australia suspend remaining international flights
By Patrick Hatch
June 8, 2020 — 3.45pm
Qantas and Virgin Australia have regrounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The Morrison government says it is reviewing whether it needs to fund further flights to get Australians home from abroad as some overseas airlines resume flying here.
Qantas and Virgin will again suspend their international passenger operations.
Under the government program, Qantas was flying a twice weekly London-Perth-Melbourne return service and a weekly Los Angeles-Melbourne service, the last of which landed on Monday morning.
Meanwhile Virgin - which is in voluntary administration seeking new owners - was flying a weekly Los Angeles-Brisbane service which ended Sunday.
Both airlines confirmed on Monday they had no further international passenger services scheduled following the end of the government scheme, with aircraft to be grounded and crews working the flights stood down.
A spokeswoman for the Deputy Prime Minister and Transport Minister Michael McCormack said the scheme with Qantas and Virgin was established to get Australians home as soon as possible amid the pandemic.
"The government is reviewing the program noting there are now alternative commercial flight options available from London and Los Angeles," she said.
The government also has previously arranged for ad hoc repatriation flights from Peru, Argentina, South Africa and India.
Government to extend financial backing for domestic flights
Qantas will continue to fly some international freight flights and said it was ready to fly any further repatriation flights for the government as needed.
A Qantas spokesman said the airline was "proud to have helped thousands of Australians return home as well as taking foreign nationals back in the other direction".
Over the weekend Mr McCormack announced the government will extend the underwriting over a minimum number of domestic and regional flights operated by Qantas, Virgin and Regional Express.
The end of Qantas and Virgin’s Los Angeles flights leaves United Airlines’ daily Sydney-San Francisco service as the only direct passenger air link between Australia and the United States.
Qatar Airways, Emirates and Etihad Airways have resumed regular flights connecting Sydney, Melbourne, Brisbane and Perth to the UK, Europe, Middle East and Asia via their Gulf hubs, while Air New Zealand is operating some trans-Tasman flights and Cathay Pacific is flying to Hong Kong.
There is a $165m plan for Qantas and Virgin to resume domestic routes.
Under current border restrictions, only Australian citizens, residents and immediate family members can travel to Australia and must go into quarantine for 14 days on arrival.
Australians have been banned from leaving the the country since March 25 unless they receive an exemption because their travel relates to work combating the COVID-19 pandemic, is in an essential industry, is for medical treatment or on compassionate or humanitarian grounds.
Patrick Hatch
Business reporter at The Age and Sydney Morning Herald.
June 8, 2020 — 3.45pm
Qantas and Virgin Australia have regrounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The Morrison government says it is reviewing whether it needs to fund further flights to get Australians home from abroad as some overseas airlines resume flying here.
Qantas and Virgin will again suspend their international passenger operations.
Under the government program, Qantas was flying a twice weekly London-Perth-Melbourne return service and a weekly Los Angeles-Melbourne service, the last of which landed on Monday morning.
Meanwhile Virgin - which is in voluntary administration seeking new owners - was flying a weekly Los Angeles-Brisbane service which ended Sunday.
Both airlines confirmed on Monday they had no further international passenger services scheduled following the end of the government scheme, with aircraft to be grounded and crews working the flights stood down.
A spokeswoman for the Deputy Prime Minister and Transport Minister Michael McCormack said the scheme with Qantas and Virgin was established to get Australians home as soon as possible amid the pandemic.
"The government is reviewing the program noting there are now alternative commercial flight options available from London and Los Angeles," she said.
The government also has previously arranged for ad hoc repatriation flights from Peru, Argentina, South Africa and India.
Government to extend financial backing for domestic flights
Qantas will continue to fly some international freight flights and said it was ready to fly any further repatriation flights for the government as needed.
A Qantas spokesman said the airline was "proud to have helped thousands of Australians return home as well as taking foreign nationals back in the other direction".
Over the weekend Mr McCormack announced the government will extend the underwriting over a minimum number of domestic and regional flights operated by Qantas, Virgin and Regional Express.
The end of Qantas and Virgin’s Los Angeles flights leaves United Airlines’ daily Sydney-San Francisco service as the only direct passenger air link between Australia and the United States.
Qatar Airways, Emirates and Etihad Airways have resumed regular flights connecting Sydney, Melbourne, Brisbane and Perth to the UK, Europe, Middle East and Asia via their Gulf hubs, while Air New Zealand is operating some trans-Tasman flights and Cathay Pacific is flying to Hong Kong.
There is a $165m plan for Qantas and Virgin to resume domestic routes.
Under current border restrictions, only Australian citizens, residents and immediate family members can travel to Australia and must go into quarantine for 14 days on arrival.
Australians have been banned from leaving the the country since March 25 unless they receive an exemption because their travel relates to work combating the COVID-19 pandemic, is in an essential industry, is for medical treatment or on compassionate or humanitarian grounds.
Patrick Hatch
Business reporter at The Age and Sydney Morning Herald.
S28- BE
The bond holders are at the back of the queue, they took an unsecured position in exchange for a decent fixed return. Now they are finding why banks don't offer them 8%. They will cop a pasting. It may not be a 100% loss but it'll be close.
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The only experience I have is what I saw and went through during the Ansett administration. Just to be clear Ansett didn't just suddenly stop flying, it was in administration for 5 months flying a limited service with the support of the ACTU. So the unions were well and truly represented during the whole period when KM were negotiating the sale to Fox and Lew. Lindsay Fox in particular was very chummy with the unions through his association with Bill Kelty. At the end of the day it didn't matter and the employees and the unions were left high and dry when the people with the money decided at literally the last minute to not proceed with the purchase.
My advise to any Virgin employee is not to put your faith in the union to secure the deal despite what they say because they can't force Bain or Cyrus to buy the airline if at the last minute they choose not to. The most devastating statement I heard during the whole Ansett debacle was Greg Combet on the news stating "There are no jobs to be saved at Ansett.".
My advise to any Virgin employee is not to put your faith in the union to secure the deal despite what they say because they can't force Bain or Cyrus to buy the airline if at the last minute they choose not to. The most devastating statement I heard during the whole Ansett debacle was Greg Combet on the news stating "There are no jobs to be saved at Ansett.".
As for workplace, think of it as anesthetic "deep breaths and it'll be fine" they said", and when you're passed out on happy gas the cutting begins.
Last edited by didrechambers77; 9th Jun 2020 at 10:44. Reason: extension.
Correct, the unions involved are purely a mouth piece. Any sentiment regarding keeping watch on employee entitlements/rights is as good as a live feed from workplace "there there pet, it'll be okay, we god this".... any outstanding entitlements in the event on liquidation are underwritten by the FEG, no need for a mouthpiece for that. Keep in mind, your unions are also going through the process to make your respective agreements more "competitive" and "modernized" are the buzz words being thrown around. The drastic spill and fill is on its way for the corp staff, (both bidders have put together structures already, which only include 5-C suits [down from 9] and EBA staff well.... spill and fill, don't like it leave... nothing more nothing less.
As for workplace, think of it as anesthetic "deep breaths and it'll be fine" they said", and when you're passed out on happy gas the cutting begins.
As for workplace, think of it as anesthetic "deep breaths and it'll be fine" they said", and when you're passed out on happy gas the cutting begins.
Love it!!!
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ex ABC: Virgin's administrator pleads for government support to stop bidders from...
And again.......
Link here: https://www.abc.net.au/news/2020-06-...covid/12338760
Extract here:
Link here: https://www.abc.net.au/news/2020-06-...covid/12338760
Extract here:
Virgin's administrator pleads for government support to stop bidders from walking away amid coronavirus crisis
Virgin's administrator pleads for government support to stop bidders from walking away amid coronavirus crisis
By business reporter Nassim Khadem
Posted 36mminutes ago, updated 35mminutes ago.
Virgin Australia went into voluntary administration in April.
Virgin's administrator has written to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of government support for the airline industry.
The global aviation industry is facing an uncertain future, with coronavirus halting international travel and airlines announcing job cuts and calling on governments for support.
On Monday, Virgin Australia and Qantas grounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The limited flights had been in operation to allow Australians stranded overseas to return home amid the COVID-19 crisis.
Sources have confirmed Virgin's administrator, Deloitte, wrote to the Government on Tuesday, requesting urgent support.
The bidders are not only concerned about Virgin's financial status, but the general future for airlines given the uncertainty over when international travel could resume.
The Federal Government has consistently argued it will not bail out individual companies, but has given some funding for local flights, including some operated by Qantas and Virgin.
Virgin Australia went into administration on April 21, owing about $7 billion to about 12,000 creditors.
A number of bidders have been circling the airline, but the initial shortlist of 20 was narrowed to two bidders at the start of the month: Boston-based private investment firm Bain Capital, and global investor Cyrus Capital Partners,which has links to British billionaire and Virgin founder Richard Branson.
Final bids are due this Friday.
More to come.
Posted 36mminutes ago, updated 35 mminutes ago
Posted 36mminutes ago, updated 35mminutes ago.
Virgin Australia went into voluntary administration in April.
Virgin's administrator has written to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of government support for the airline industry.
The global aviation industry is facing an uncertain future, with coronavirus halting international travel and airlines announcing job cuts and calling on governments for support.
On Monday, Virgin Australia and Qantas grounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The limited flights had been in operation to allow Australians stranded overseas to return home amid the COVID-19 crisis.
Sources have confirmed Virgin's administrator, Deloitte, wrote to the Government on Tuesday, requesting urgent support.
The bidders are not only concerned about Virgin's financial status, but the general future for airlines given the uncertainty over when international travel could resume.
The Federal Government has consistently argued it will not bail out individual companies, but has given some funding for local flights, including some operated by Qantas and Virgin.
Virgin Australia went into administration on April 21, owing about $7 billion to about 12,000 creditors.
A number of bidders have been circling the airline, but the initial shortlist of 20 was narrowed to two bidders at the start of the month: Boston-based private investment firm Bain Capital, and global investor Cyrus Capital Partners,which has links to British billionaire and Virgin founder Richard Branson.
Final bids are due this Friday.
More to come.
Posted 36mminutes ago, updated 35 mminutes ago
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Surely the final two bidders would be well aware of the current state of Virgins financials and the environment they would be taking an airline into after they purchase it.
Without the extension of the underwritten Government network would Virgin be flying anything at all other than FIFO ? QF are going up to 15% increasing in size as demand requires.
It appears any flying by VA at the moment is on the back of the Government network and without it would Deloitte even have anything up in the air?
It appears any flying by VA at the moment is on the back of the Government network and without it would Deloitte even have anything up in the air?
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Another article indicating nervousness in the buyers- it just makes you wonder why anybody would want to buy an airline in this climate, let alone one with such a poor financial history as Virgin.
Without the millions they provided the company may well have been liquidated already but the eventual winning bid will gladly hold on to that cash.
A better outcome would be for the successful bidder to agree to a partial or full repayment of the capital at a pre-determined time in the future.
And yet those same bond holders are probably the same people that prevented Virgin from going into administration months earlier; well before some anomaly called Covid.
Last edited by non_state_actor; 10th Jun 2020 at 05:48.
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It’s being reported in the Australian Cyrus and Bain capital want the Federal Gov to guarantee jobkeeper for 9000 Virgin staff and guarantee Virgin ticket sales before committing to anything.
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Extract:
Virgin's administrator pleads for government support to stop bidders from walking away amid coronavirus crisis
Virgin's administrator pleads for government support to stop bidders from walking away amid coronavirus crisis
By business reporter Nassim Khadem
Posted 1h ago, updated 48m ago
Virgin's administrator has written to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of government support for the airline industry.
The letter calls on the Government to extend the JobKeeper program for the airline's 9,000 workers for at least another six months, and guarantee Virgin tickets.
The global aviation industry is facing an uncertain future, with coronavirus halting international travel and airlines announcing job cuts and calling on governments for support.
On Monday, Virgin Australia and Qantas grounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The limited flights had been in operation to allow Australians stranded overseas to return home amid the COVID-19 crisis.
Sources have confirmed Virgin's administrator, Deloitte, wrote to the Government on Tuesday, requesting urgent support.
It said the two current bidders - Boston-based private investment firm Bain Capital, and global investor Cyrus Capital Partners - are not only concerned about Virgin's financial status, but the general future for airlines given the uncertainty over when international travel could resume.
The Federal Government has consistently argued it will not bail out individual companies, but has given some funding for local flights, including some operated by Qantas and Virgin.
Virgin Australia went into administration on April 21, owing about $7 billion to about 12,000 creditors.
About 9000 of those creditors are Virgin's workers, who are owed $450 million in entitlements.
A number of bidders have been circling the airline, but the initial shortlist of about 20 was reduced to four, and then narrowed down to two at the start of the month.
Final bids for Virgin are due on June 22.
But it adds that there is a threat to that sale being finalised unless the Government provides clarity around aviation support measures.
Those measures would include extending the JobKeeper wage subsidy for aviation workers after the end of September, when the scheme is legislated to end.
The letter also calls for an extension of 'use it or lose it' airline slots at airports, since planes have been grounded and slots are currently not in use.
The letter calls on the Government to ensure fair competition and to make sure Australia's competition watchdog is equipped with strong powers to fight possible anti-competitive practices such as the dumping of capacity by Qantas.
And it asks the Government to give people who have bought tickets a guarantee that they will not lose out and will be able to book future flights with Virgin.
It also suggests that the $715 million Australian airline financial relief package, which Transport Minister Michael McCormack announced before Virgin went into voluntary administration, be extended until the end of the year.
The package was aimed at mainly giving airlines relief from government-imposed fees and charges, but has been of limited use given travel bans have grounded planes and domestic carriers have barely been flying.
The letter also urges the Government to extend domestic network subsidies to the end of the year, and to maintain support for trans-Tasman flights, which could soon resume.
Posted 1h ago, updated 48m ago
Posted 1h ago, updated 48m ago
Virgin's administrator has written to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of government support for the airline industry.
The letter calls on the Government to extend the JobKeeper program for the airline's 9,000 workers for at least another six months, and guarantee Virgin tickets.
The global aviation industry is facing an uncertain future, with coronavirus halting international travel and airlines announcing job cuts and calling on governments for support.
On Monday, Virgin Australia and Qantas grounded their remaining international passenger operations after government funding for the handful of overseas routes they were flying came to an end.
The limited flights had been in operation to allow Australians stranded overseas to return home amid the COVID-19 crisis.
Sources have confirmed Virgin's administrator, Deloitte, wrote to the Government on Tuesday, requesting urgent support.
It said the two current bidders - Boston-based private investment firm Bain Capital, and global investor Cyrus Capital Partners - are not only concerned about Virgin's financial status, but the general future for airlines given the uncertainty over when international travel could resume.
The Federal Government has consistently argued it will not bail out individual companies, but has given some funding for local flights, including some operated by Qantas and Virgin.
Virgin Australia went into administration on April 21, owing about $7 billion to about 12,000 creditors.
About 9000 of those creditors are Virgin's workers, who are owed $450 million in entitlements.
A number of bidders have been circling the airline, but the initial shortlist of about 20 was reduced to four, and then narrowed down to two at the start of the month.
Final bids for Virgin are due on June 22.
Bidders are ready to move but want certain guarantees
Sources say the letter says the sale process is at a stage where there are two strong bidders wanting to purchase the company.But it adds that there is a threat to that sale being finalised unless the Government provides clarity around aviation support measures.
Those measures would include extending the JobKeeper wage subsidy for aviation workers after the end of September, when the scheme is legislated to end.
The letter also calls for an extension of 'use it or lose it' airline slots at airports, since planes have been grounded and slots are currently not in use.
The letter calls on the Government to ensure fair competition and to make sure Australia's competition watchdog is equipped with strong powers to fight possible anti-competitive practices such as the dumping of capacity by Qantas.
And it asks the Government to give people who have bought tickets a guarantee that they will not lose out and will be able to book future flights with Virgin.
It also suggests that the $715 million Australian airline financial relief package, which Transport Minister Michael McCormack announced before Virgin went into voluntary administration, be extended until the end of the year.
The package was aimed at mainly giving airlines relief from government-imposed fees and charges, but has been of limited use given travel bans have grounded planes and domestic carriers have barely been flying.
The letter also urges the Government to extend domestic network subsidies to the end of the year, and to maintain support for trans-Tasman flights, which could soon resume.
Posted 1h ago, updated 48m ago
S28
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As has just been reported by GT on Sky, IF Bain or Cyrus and Co's can come to the table with $AUD 100B, then surely they can't seriously be asking for government handouts and guarantees........
The Adaministrators will be the ONLY winners out of this debacle.
Akin in to a train wreck in slow motion.
The Adaministrators will be the ONLY winners out of this debacle.
Akin in to a train wreck in slow motion.
