Virgin headed for another disaster, says REX chairman

[MickG0105]

Originally Posted by wheels_down

PS has pulled back what 20% of the workforce since he started?

No, not even close. His lack of traction on that front has been just one of his signature failures.

In August last year he announced 750 jobs were going to be cut as part of a rightsizing. On the basis that he'd been there for five months at that stage most people thought that he'd have the 750 names in his back pocket or at the very least be well advanced in planning. In a 7 November 2019 piece in the SMH it was reported that most of the 750 headcount reduction would be completed by Christmas.

Depending on who you listen to, as of 1 January this year either just 140 of the mooted 750 had gone or none had gone but there were plans to cut 400 jobs by the end of March with another 350 to go by the end of June. So, much talking, little planning, less cutting.

If you turn to the FY20-H1 interim report delivered in late February, subsequent to announcing the 750 'rightsizing' employee costs went up by $42 million (6.3 percent). After you allow for redundancy payments for the 140 that were meant to have been exited, the Schuster bonus and EBA escalators, there's still $10 million in additional employee costs that is unaccounted for. That seems to suggest that they added headcount. There was no hiring freeze in place prior to the COVID-19 crisis biting.

Subsequent to the coronavirus crisis emerging they've apparently made 1,000 people redundant, likely some of the 750 plus the Tiger and NZ-based staff. That seems to gel with the headcount numbers that Deloitte is bandying around (9,020 employees). So, all up pre- and post-crisis they've managed to reduce headcount by about 10 percent with the vast majority of that reduction occurring post-crisis.

Originally Posted by wheels_down

HQ will likely move to Sydney so expect another 10-20% who won’t commit.

I wouldn't be too sure about head office moving but, in any event, just how many people do you think are employed in the Village? My understanding is that there's only about 1,000 people there.

Originally Posted by wheels_down

What Fuel price is that figure based on?

Yeah, good question. Just back of the napkin it has to be something like $US50 a barrel.

[Section28- BE]

For 'what', It is Not worth- it has been 'reported' (allegedly/apparently) -

1/ 'Said', "Note Holders"- not 'that' freekin Happy/Impressed, with NIL Inclusion on the 'Committee of Inspection'.....

2/ 'Apparently'- a veritable onslaught of 'New' (revised)- Confidentiality Agreements, being 'Sprayed' around at this time.............., go figure?????

Shall, keep it Blunt/Descriptive, for this...., per chance 'is' the model being flogged, the one Paul...........
Rgds all
S28- BE

[MickG0105]

Originally Posted by Section28- BE

For 'what', It is Not worth- it has been 'reported' (allegedly/apparently) -

1/ 'Said', "Note Holders"- not 'that' freekin Happy/Impressed, with NIL Inclusion on the 'Committee of Inspection'.....

2/ 'Apparently'- a veritable onslaught of 'New' (revised)- Confidentiality Agreements, being 'Sprayed' around at this time.............., go figure?????

Shall, keep it Blunt/Descriptive, for this...., per chance 'is' the model being flogged, the one Paul...........
Rgds all
S28- BE

On Point 1/, and rightly so. Unsecured bondholders are owed $2,000 million (roughly one third of total debts) and have zero representation on the Committee of Inspection; employees are owed $450 million and have 11 representatives on the CoI (roughly one third of the committee of 35).

Dot - unions raise no objection to the appointment of Strawbridge et al (Deloitte) as Administrator.

Dot - Strawbridge announces no plans for redundancies or changes to employment during administration.

Dot - Employee representatives (10 unions plus Virgin's Chief Legal and Risk Officer) make up one third of CoI

I'm sure there's some joining to be done there somewhere.

[Section28- BE]

Got-Ya 'Blackout'............., well done.

You, would Know- Sister.
Rgds
S28

[MickG0105]

Originally Posted by Blackout

Gas turbine blades of conventional rotorcraft turboshaft engines are optimized to operate at nearly a fixed speed and a fixed incidence angle. If the operating condition of the engine changes, then the flow through the turbine may need to be guided to a more optimum direction.

One way to do this is with variable turbine nozzle geometry. But this standard method has some disadvantages including increased weight and complexity, as well as a limited operating range since the nozzle vanes can only be turned to a certain point before severe flow incidence angles disrupt the rotating blades downstream.

That appears to draw directly enough from Murugan, Muthuvel; Ghoshal, Anindya; Bravo, Luis; Xu, Fei; Hsu, Ming-Chen; and Bazilevs, Yuri, "Articulating Axial-Flow Turbomachinery Rotor Blade For Enabling Variable Speed Gas Turbine Engine" (2018). Mechanical Engineering Conference Presentations, Papers, and Proceedings. 195. to require a citation, no?

[Section28- BE]

Orrrrh- 'Cut & Paste'........., could not be so.

Rgds
S28

[positivegee]

Originally Posted by Paragraph377

You can’t compare VA with QF. It’s like comparing a vagina to a dick..

I love this thread, this made me LMAO, thanks P377

[MickG0105]

Originally Posted by Blackout

Still -'Serves' its 'Purpose' as a- 'Metaphor' -moving 'FORWARD'.

Yes, I had a fair idea of what you were getting at, I was just looking out for poor old Murugan et al.

[BNEA320]

Originally Posted by airdualbleedfault

Despite the plethora of flogs (Inc Mr Lim) here that should be running merchant banks instead of flying aeroplanes, nobody has explained in layman's terms how Kwantarse can pay virtually all of their staff significantly more than Virgin and still turn a large profit, if indeed as the experts say the EBAs need to be slashed at VA???????

so my 2 cents .....

QF & VA had way too many staff getting paid too much, BUT QF had larger share of corporate market, who pay top dollar.

You only had to look around at airports, with many well paid staff, standing around doing stuff all between flights.

New QF will have less staff probably being paid less or paid same but with more required (not saying necessarily pilots will work more hours).

New VA, if it gets up (can the administrators stuff it up ? Looks possible) will have a huge haircut in terms of staff & pay & conditions, otherwise a totally new airline will pick up either B737 or A320 aircraft leases for a song & pay nothing like QF/VA have in the past.

A new airline will only have to fly trunk routes more frequently than JQ & have cheaper fares than QF. Govts might have to subsidise non-trunk routes or JQ will fly them at higher fares, which will hurt tourism industry recovery in the regions.

Plenty of experienced ex VA & other airline staff, who would work for a lot less than they were getting, as have mortgages etc.

A new airline might start slowly, hiring only as needed, but in this new world, they could probably start with 6-8 aircraft or less, doing triangle only to offer a schedule better than JQ. Remember JQ will never fly frequently on the golden triangle or will be competing with QF.

What did Virgin Blue start with ? 2 x ex AN B734s wasn't it ? BNE/SYD only ?

Seem to be plenty of venture capitalists around with plenty of cash to fund it. Wouldn't be surprised if some of pay of any new airline was either shares or % of profit.

[Con Catenator]

Remember JQ will never fly frequently on the golden triangle

I wouldn't be so sure of that in the future if a new airline such as your describing gets up. Qantas will compete head to head using JQ to match any new airfares.

[machtuk]

I remember an Airline that started in this country a few years ago, had only a hand full of planes of one type, the drivers started out on less $$$ than their competitors and they ran a very lean operation, even used spent paper in the printers! They did just the popular main routes tourist destinations mostly. They expanded to 14 airframes still all the one type, finally after a sucsesion of the usual CEO's CP's who thought they knew better the said Airline just started to operate on the black then along came a mother Airline who bought in to the said Airline a bit at a time and wanted to change the fleet type, synergy I think they call it, the new corporate 'in' word. From that day onwards the said Airline went backwards losing money like a kid at a lolly shop due missmanagment and a whole host of internal issues. Enter CV19, the lolly shop kid ran out of money, the mother Airline went bust".........said Airline was Tigers!

[rmm]

You only had to look around at airports, with many well paid staff, standing around doing stuff all between flights.

So what would you have them do? Stand them down for 20 minutes then recall them?

[chookcooker]

Originally Posted by MickG0105

So, that Deloitte marketing spiel is somewhat delusional.

you’ve seen it have you?

[chookcooker]

Originally Posted by rmm

So what would you have them do? Stand them down for 20 minutes then recall them?

it’s ok. Certainly at va that time at the airport was unpaid. They were essentially stood down. Perhaps they should be extra extra unpaid

[normanton]

Originally Posted by chookcooker

you’ve seen it have you?

Yes mate.

Its on the website. I almost fell off my chair reading it.

[MickG0105]

Originally Posted by wishiwasupthere

Has there ever been an airline in Australia as badly mismanaged in such a short time?

Bali...
Fleet Transition....
Catering...

A330 leases ...
Hong Kong ...
Velocity buy-back ...
2019 notes issue ...

[chookcooker]

Originally Posted by normanton

Yes mate.

Its on the website. I almost fell off my chair reading it.

sorry, which website?

[George Glass]

Originally Posted by BNEA320

so my 2 cents .....

QF & VA had way too many staff getting paid too much, BUT QF had larger share of corporate market, who pay top dollar.

You only had to look around at airports, with many well paid staff, standing around doing stuff all between flights.

New QF will have less staff probably being paid less or paid same but with more required (not saying necessarily pilots will work more hours).

New VA, if it gets up (can the administrators stuff it up ? Looks possible) will have a huge haircut in terms of staff & pay & conditions, otherwise a totally new airline will pick up either B737 or A320 aircraft leases for a song & pay nothing like QF/VA have in the past.

A new airline will only have to fly trunk routes more frequently than JQ & have cheaper fares than QF. Govts might have to subsidise non-trunk routes or JQ will fly them at higher fares, which will hurt tourism industry recovery in the regions.

Plenty of experienced ex VA & other airline staff, who would work for a lot less than they were getting, as have mortgages etc.

A new airline might start slowly, hiring only as needed, but in this new world, they could probably start with 6-8 aircraft or less, doing triangle only to offer a schedule better than JQ. Remember JQ will never fly frequently on the golden triangle or will be competing with QF.

What did Virgin Blue start with ? 2 x ex AN B734s wasn't it ? BNE/SYD only ?

Seem to be plenty of venture capitalists around with plenty of cash to fund it. Wouldn't be surprised if some of pay of any new airline was either shares or % of profit.

Its a bit of a myth that QF staff are overpaid. Twenty years ago , yes but not now .Pilots are still pretty well compensated but every other department has taken a haircut over the last few years. Remember the shut down? That pretty much broke the TWU and others at QF. Large parts of the workforce , flight attendants , baggage handlers, front counter staff etc. have been casualized. It will take a ruthless competitor to take them on.

[MickG0105]

Originally Posted by chookcooker

you’ve seen it have you?

I haven't seen the information memorandum; Deloitte and PS are somewhat antsey about confidentiality; seems they aren't keen for stuff like the value of the Travel Bank liability and the underpinning headcount projections to see light of day just yet. I've only seen what has been spruiked to the papers. You can find it under headlines like Virgin can earn $1.2b a year in 2022: management's pitch to buyers

[lc_461]

Originally Posted by BNEA320

so my 2 cents .....

QF & VA had way too many staff getting paid too much, BUT QF had larger share of corporate market, who pay top dollar.

You only had to look around at airports, with many well paid staff, standing around doing stuff all between flights.

New QF will have less staff probably being paid less or paid same but with more required (not saying necessarily pilots will work more hours).

.

I would argue this isn't true for QF at least. On the ground at least many years of VR and retirements has left the workforce on lean 20hr per week part time contracts, where the pay is barely industry competitive. Many of the full time staff on old contracts have long sailed into the sunset. All new hires on the ramp for at least 5 years are hired by a separate wholly owned entity (QGS) with comparably poor salaries. The manpower allocations above and below the wing are the bare minimum. For example, FAs assist with boarding. Travel overseas and you might see 5 or 6 staff at the gate (or double that in cheap labour markets, I've counted 9 before in HKG!), whereas at least in Australia you would be lucky to see half that.