20 buyers now circling Virgin Australia
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
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
I’m not saying there aren’t savings to be made but generally some guys could milk the system (referring mostly to the drafting system I presume) only because of the utterly incompetent approach to crewing generally. One of the hallmarks of the old Virgin operation was the utter collapse of any kind coherent plan in the event of any kind of disruption. On top of that, the rostering software was abysmal.
It’s interesting to see someone advocating an additional Adelaide base and others saying the number of bases should reduce. This is the interesting conundrum, more bases / less Hotac costs or few bases / little Hotac cost but big schedule restrictions (ie no early deps or late arrivals at outports). But as I said, a Jetstar approach will get a Jetstar result.
HK was a big loser and making "profits" on certain routes can depend on how you apportion overheads and related costs. JB was famous for his statements on profits before EBITDA..which are real costs..
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Last edited by ABP; 28th Jun 2020 at 06:04.
The NZ part of the operation made 14 million dollars I think it was in profit (I will edit when I find the reference) last FY.. it was a long standing lie told to the Virgin staff over there and the rest of the company to cover up where the loss was actually occurring. My guess most of that was from poor contract/ lease management but that would have looked bad at the top, also dummy spits between board members between Air NZ and you know who.
JB loved playing with numbers and using cute accounting terms but the reality was it lost a whopping $7Bn in its tenure. The new owner will, I'd imagine, use their own modelling to create profitable [?] rotes. The historical data would, in my opinion, be sus.
A clean sheet is required for everything!
*airlines are hard yards - NokScoot gone forever now and BA laying off 12,000 employees. Don't mention the collateral financial damage from these events .
A clean sheet is required for everything!
*airlines are hard yards - NokScoot gone forever now and BA laying off 12,000 employees. Don't mention the collateral financial damage from these events .
The A320s are all leased. Tiger only had 10 year lease terms, then they re negotiated extensions. I think the F100s are owned. The 90s build A320s can be scrapped.
The 737 can do all the mining contracts. Probably more profitable too once you take the cost base of VARA away and all it’s associated silos.
The 737 can do all the mining contracts. Probably more profitable too once you take the cost base of VARA away and all it’s associated silos.
it could be reasonably expected Alliance could do what a 737 can not - QQ still fly's daily flights for VA even under administration. Haven't seen any mention of a multi fleet strategy from Bain.
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ex ABC- Four Corners:Top bosses at Virgin Australia give insiders' account of .......
Top bosses at Virgin Australia give insiders' account of what went wrong at the struggling airline
Top bosses at Virgin Australia give insiders' account of what went wrong at the struggling airline
Link here: https://www.abc.net.au/news/2020-06-...ation/12392730
"Watch the full investigation on Four Corners tonight at 8:30pm on ABC TV or livestream on the Four Corners Facebook page."
Rgds
S28- BE
Last edited by Section28- BE; 28th Jun 2020 at 22:44. Reason: Added viewing time...
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But they’ll never be forced to explain, never forced to answer questions about their conduct. They’ll simply move to new boards and continue on. VA is (was) the naming rights sponsor to the Supercars and JB finds himself on the board....
The Board, starting with the Chairman, were stuffed from the beginning because they used an outdated and dangerous corporate accountability structure. Specifically Borghetti and later Scurrah, were on the Board of the company as “managing directors”. This is just plain wrong.
The roles of “manager” and “Director” are utterly and completely seperate and combining them is and was a recipe for disaster. The role of the Board, and Directors, is ultimately risk management in its highest form. - Preserving the assets of the company, including its reputation, for the benefit of its shareholders.
The role of the “manager” usually called the CEO is to employ the assets to make money. This is NOT the role of the Board.
So you can see that being an “MD’ leaves you hopelessly conflicted. On one hand you must manage risks, on the other hand you must accept risks to make money.
The conversations are different.
CEO and staff: “what is our business plan?”
‘’Board: “Do we accept the CEO’s plan?
You can’t combine the two roles.
‘’The Board didn’t act soon enough - couldn’t act because Borghetti was a Director and so was part of the conversation, he couldn’t be kept out.
If you are a CEO, you are only “in attendance” at Board meetings and when you leave the Board can have a warts and all discussion about your performance or lack of it. Borghetti stayed at least three years too long. If you are CEO dignity doesn’t come into it. The Board gets nervous about what you are doing, you get fired, period.
This is why Virgin went under.
The roles of “manager” and “Director” are utterly and completely seperate and combining them is and was a recipe for disaster. The role of the Board, and Directors, is ultimately risk management in its highest form. - Preserving the assets of the company, including its reputation, for the benefit of its shareholders.
The role of the “manager” usually called the CEO is to employ the assets to make money. This is NOT the role of the Board.
So you can see that being an “MD’ leaves you hopelessly conflicted. On one hand you must manage risks, on the other hand you must accept risks to make money.
The conversations are different.
CEO and staff: “what is our business plan?”
‘’Board: “Do we accept the CEO’s plan?
You can’t combine the two roles.
Mr Borghetti left the airline in March 2019.
"What the board can do if they don't like the way the CEO is running the company is to change the CEO. And that's eventually what the board that I led did. It was not prematurely, it was not done in an undignified fashion," Ms Bryan said.
"I think he'd done his stuff and the board thought it was time for a change."
Mr Borghetti told Four Corners that he first flagged leaving the company in 2016 but stayed on for another three years at the request of the chair.
"What the board can do if they don't like the way the CEO is running the company is to change the CEO. And that's eventually what the board that I led did. It was not prematurely, it was not done in an undignified fashion," Ms Bryan said.
"I think he'd done his stuff and the board thought it was time for a change."
Mr Borghetti told Four Corners that he first flagged leaving the company in 2016 but stayed on for another three years at the request of the chair.
If you are a CEO, you are only “in attendance” at Board meetings and when you leave the Board can have a warts and all discussion about your performance or lack of it. Borghetti stayed at least three years too long. If you are CEO dignity doesn’t come into it. The Board gets nervous about what you are doing, you get fired, period.
This is why Virgin went under.
Spoiler
No it can't
https://www.theaustralian.com.au/bus...lQauAJWiPSwVOI
Virgin Australia CEO Paul Scurrah and administrator Vaughan Strawbridge of Deloitte. Picture: John Feder.
The new relationship is expected to be marked by a press conference on Wednesday with Virgin chief executive Paul Scurrah and Bain Capital’s local CEO Mike Murphy.
On Friday Bain agreed to a $1.65bn deal to inject cash and assume responsibilities for Virgin employee entitlements and travel credits.
The total value of the deal, including how much money — if any — is payable to the airline’s bond holders, will depend on decisions by Virgin management and Bain on how many planes to keep in the short to medium term.
With the airline’s financial future apparently secure — barring any last-minute legal action by unsecured bond holders who are owed $2bn — Virgin’s existing management under Mr Scurrah is set to push ahead more aggressively with a restructuring program designed to cut its losses and eventually return to profit.
The deal will inevitably result in the loss of thousands of Virgin’s 9000 staff, but the time frame depends on factors including a potential extension of the federal government’s JobKeeper program for airline workers and Virgin’s ability to ramp up its domestic services in the face of domestic travel restrictions.
While two of Virgin’s unions supported the proposal by Bain’s rival, New York hedge fund Cyrus, the unions have little bargaining power to oppose the plans of the new cashed-up owners in light of continued restrictions on international and domestic flights and the announcement by Qantas last week that it would be laying off some 6000 staff and standing down another 15,000.
Virgin’s restructuring program is expected to include renegotiating a string of contracts with caterers and other suppliers.
“We have a process to do around setting up the cost base of the business,” said Virgin’s administrator, Vaughan Strawbridge of Deloitte.
“There is work to be done around the construct of what the airline is going to look like and how that works.
“We will be working with them (Bain) closely over the next couple of months as we lead up to the second meeting of creditors.
“We will do what is needed to implement the transformation plan which management had in place, but we are going to accelerate that.”
He said Virgin management would be working with Bain to ramp up the airline as much as it could, depending on the level of demand.
“There’s lots of capacity. There’s lot of planes and we have some amazing staff.
“The more flights there are from demand, the more planes there will be, and the more jobs will be retained.”
Mr Strawbridge said Bain was taking its takeover of Virgin “very seriously”.
“They are going to inject significant capital into this business. This is something we took into consideration when we reviewed the bids.”
Mr Strawbridge said the new owners would start having more meetings with stakeholders including unions, staff and representatives of airports, aircraft owners and financiers.
He will formally put a proposal to Virgin creditors at a meeting in late August which will include recommending Bain as the new owner of the airline. He said the exact amount which would be paid out to the bold holders — unsecured creditors including small investors who put money into a Virgin note raising last November — depended on decisions to be made on aircraft leasing deals.
“There’s a lot which needs (to be gone into) which will determine what assets are retained and what liabilities are to be assumed (by Bain),” he said.
“It’s around whether aircraft are handed back or not. There’s a lot of work to be done around that before we can put a firm view around the return to unsecured creditors.”
Mr Strawbridge said the deal would mean all the entitlements of Virgin staff would be “looked after in full”.
“We hope as many jobs as possible will be retained. The overall position will depend on what happens over the next couple of months, including if the airline is able to put on more flights and stand up more staff than it is now.”
Virgin is expected to return to being a mid-market airline, closer to the original Virgin Blue, but including some lower-budget business class services.
Mr Strawbridge said Bain would begin providing “interim funding to fund the business through the ramp up (process) through to the completion of the sale”.
He has been able to say he still has $100m in cash at the bank but this is because of a deal with the tax office to delay tax payments, which are being accrued as a liability on its books.
The airline has been burning through cash with most of its planes grounded and its staff stood down.
A spokesman for the bond holders has denied rumours that they plan to take legal action in a bid to negotiate a better deal than the zero to 10c in the dollar they are currently facing.
The bond holders have said they are “disappointed” that the administrator announced a successful bidder for the airline without considering the recapitalisation program they put forward last week.
“We will continue to push for a genuine consideration of our proposal in the interests of Virgin employees, stakeholders and creditors, including the thousands of Australian retail bond holders and the institutions that have already invested $2bn in the airline,” a spokesman said.
The bond holders are pushing for their own recapitalisation program which would see Virgin returned to the ASX, saying they are concerned that the Bain deal could lead to a “manifestly unjust outcome” for them.
The federal secretary of the Australian Licensed Aircraft Engineers Association, Steve Purvinas, said his union was prepared to meet the new owners, despite its previous support of the rival Cyrus consortium.
He understood that the new owners could want to discuss potential changes to Virgin including to the enterprise agreements to make the airline more profitable.
“We look forward to those discussions,” he said.
He said the unions understood that there would inevitably be some job losses.
His union preferred to see as many engineers’ jobs retained as possible with a reduced workload, rather than redundancies.
Turbulence ahead as Bain steers Virgin’s recovery
Virgin Australia CEO Paul Scurrah and administrator Vaughan Strawbridge of Deloitte. Picture: John Feder.GLENDA KORPORAAL
ASSOCIATE EDITOR (BUSINESS)
The new relationship is expected to be marked by a press conference on Wednesday with Virgin chief executive Paul Scurrah and Bain Capital’s local CEO Mike Murphy.
On Friday Bain agreed to a $1.65bn deal to inject cash and assume responsibilities for Virgin employee entitlements and travel credits.
The total value of the deal, including how much money — if any — is payable to the airline’s bond holders, will depend on decisions by Virgin management and Bain on how many planes to keep in the short to medium term.
With the airline’s financial future apparently secure — barring any last-minute legal action by unsecured bond holders who are owed $2bn — Virgin’s existing management under Mr Scurrah is set to push ahead more aggressively with a restructuring program designed to cut its losses and eventually return to profit.
The deal will inevitably result in the loss of thousands of Virgin’s 9000 staff, but the time frame depends on factors including a potential extension of the federal government’s JobKeeper program for airline workers and Virgin’s ability to ramp up its domestic services in the face of domestic travel restrictions.
While two of Virgin’s unions supported the proposal by Bain’s rival, New York hedge fund Cyrus, the unions have little bargaining power to oppose the plans of the new cashed-up owners in light of continued restrictions on international and domestic flights and the announcement by Qantas last week that it would be laying off some 6000 staff and standing down another 15,000.
Virgin’s restructuring program is expected to include renegotiating a string of contracts with caterers and other suppliers.
“We have a process to do around setting up the cost base of the business,” said Virgin’s administrator, Vaughan Strawbridge of Deloitte.
“There is work to be done around the construct of what the airline is going to look like and how that works.
“We will be working with them (Bain) closely over the next couple of months as we lead up to the second meeting of creditors.
“We will do what is needed to implement the transformation plan which management had in place, but we are going to accelerate that.”
He said Virgin management would be working with Bain to ramp up the airline as much as it could, depending on the level of demand.
“There’s lots of capacity. There’s lot of planes and we have some amazing staff.
“The more flights there are from demand, the more planes there will be, and the more jobs will be retained.”
Mr Strawbridge said Bain was taking its takeover of Virgin “very seriously”.
“They are going to inject significant capital into this business. This is something we took into consideration when we reviewed the bids.”
Mr Strawbridge said the new owners would start having more meetings with stakeholders including unions, staff and representatives of airports, aircraft owners and financiers.
He will formally put a proposal to Virgin creditors at a meeting in late August which will include recommending Bain as the new owner of the airline. He said the exact amount which would be paid out to the bold holders — unsecured creditors including small investors who put money into a Virgin note raising last November — depended on decisions to be made on aircraft leasing deals.
“There’s a lot which needs (to be gone into) which will determine what assets are retained and what liabilities are to be assumed (by Bain),” he said.
“It’s around whether aircraft are handed back or not. There’s a lot of work to be done around that before we can put a firm view around the return to unsecured creditors.”
Mr Strawbridge said the deal would mean all the entitlements of Virgin staff would be “looked after in full”.
“We hope as many jobs as possible will be retained. The overall position will depend on what happens over the next couple of months, including if the airline is able to put on more flights and stand up more staff than it is now.”
Virgin is expected to return to being a mid-market airline, closer to the original Virgin Blue, but including some lower-budget business class services.
Mr Strawbridge said Bain would begin providing “interim funding to fund the business through the ramp up (process) through to the completion of the sale”.
He has been able to say he still has $100m in cash at the bank but this is because of a deal with the tax office to delay tax payments, which are being accrued as a liability on its books.
The airline has been burning through cash with most of its planes grounded and its staff stood down.
A spokesman for the bond holders has denied rumours that they plan to take legal action in a bid to negotiate a better deal than the zero to 10c in the dollar they are currently facing.
The bond holders have said they are “disappointed” that the administrator announced a successful bidder for the airline without considering the recapitalisation program they put forward last week.
“We will continue to push for a genuine consideration of our proposal in the interests of Virgin employees, stakeholders and creditors, including the thousands of Australian retail bond holders and the institutions that have already invested $2bn in the airline,” a spokesman said.
The bond holders are pushing for their own recapitalisation program which would see Virgin returned to the ASX, saying they are concerned that the Bain deal could lead to a “manifestly unjust outcome” for them.
The federal secretary of the Australian Licensed Aircraft Engineers Association, Steve Purvinas, said his union was prepared to meet the new owners, despite its previous support of the rival Cyrus consortium.
He understood that the new owners could want to discuss potential changes to Virgin including to the enterprise agreements to make the airline more profitable.
“We look forward to those discussions,” he said.
He said the unions understood that there would inevitably be some job losses.
His union preferred to see as many engineers’ jobs retained as possible with a reduced workload, rather than redundancies.
GLENDA KORPORAAL
ASSOCIATE EDITOR (BUSINESS)Evertonian
