Bain: Virgin Australia needs to be more like Virgin Blue
You couldn't help making money with that cost base.
Last edited by Slezy9; 26th May 2020 at 21:08. Reason: Maths
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Wouldn't Bain Capital be the worse thing to happen to Virgin since JB? private equity firms just prop a company up then gut it out. anyone remember Dick smith electronic?! Anchorage Capital does they made millions 510 of them.
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The only one who would be there forever and ever would be Indigo.
Not overly convinced the others are there for the airline’s prospering future interests.
It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.
I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.
Bill was after a local partner also. I wonder if Local means Singapore.
Not overly convinced the others are there for the airline’s prospering future interests.
It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.
I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.
Bill was after a local partner also. I wonder if Local means Singapore.
The only one who would be there forever and ever would be Indigo.
Not overly convinced the others are there for the airline’s prospering future interests.
It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.
I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.
Bill was after a local partner also. I wonder if Local means Singapore.
Not overly convinced the others are there for the airline’s prospering future interests.
It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.
I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.
Bill was after a local partner also. I wonder if Local means Singapore.
The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.
Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.
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Indigo will eventually convert/revert VA (back) into another LCC. Indigo are not in the business of operating FSCs and will want to allocate those 500+ A320Neos across their group, including VA if they are successful.
The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.
Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.
The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.
Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.
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Indigo will eventually convert/revert VA (back) into another LCC. Indigo are not in the business of operating FSCs and will want to allocate those 500+ A320Neos across their group, including VA if they are successful.
The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.
Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.
The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.
Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.
What's that definition of INSANITY again?? "Doing the same thing and expecting a different outcome......."
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Ex: the SMH- Union kingmakers fear Bain Capital's bid for Virgin Australia
Link here: https://www.smh.com.au/business/comp...31-p54y24.html
Extract here:
By Sarah Danckert and Patrick Hatch
May 31, 2020 — 11.45pm
Unions controlling key votes in the Virgin Australia administration process have expressed serious concerns about Bain Capital's tilt at the airline due to the buyout firm's history of slashing jobs and imposing harsh conditions on workers offshore.
Virgin's 9000 employees are owed a combined $450 million from the collapsed airline and will be a vital voting block to get any rescue bid approved. As a result, the unions representing the carrier's workers have emerged as kingmakers in the bidding process which will this week hit a pivotal juncture.
Bain part-owned Toys R Us has a patchy industrial relations record in the US, particularly when dealing with workers made redundant during insolvency. Credit:Jane Dyson
Bain, which in Australia is led by former Olympic diver Michael Murphy, is among the contenders for the airline alongside local private equity outfit BGH Capital, Richard Branson linked Cyrus Capital, US airline investor Indigo Partners and Canadian funds management giant Brookfield.
Virgin's administrators Deloitte spent the weekend working through second round bids and could announce a shortlist of two final bidders as soon as Monday.
Ahead of the decision, unions have aired concerns with Deloitte about Bain Capital's track record in the US where it has cut jobs and slashed worker entitlements. Transport Workers Union national secretary Michael Kaine said that while Bain had launched a public relations blitz last week to put forward its plans "this isn’t about the number of column inches you get".
"It’s about how you can demonstrate that you can get Virgin back in the air in a way that serves workers and the travelling public,” Mr Kaine said.
Four bidders for Virgin Australia have been shortlisted and will be revealed to the public.
Mr Kain noted that Bain had a patchy record on respecting workers’ rights.
"Our message to Bain and any other bidders is that Virgin’s workers are a unique workforce, they’re highly skilled, they’re highly dedicated, they’re fiercely concerned about the future of the airline and they are a force to be reckoned with for any bidders which doesn’t have Virgin’s long-term future as a priority, and which believes they can ram through plans which might ultimately hurt Australia’s chances of having a strong second airline."
Union sources said they are also troubled by Bain’s track record on industrial relations, and after meeting with the group last week believed that the private equity firm would play hard-ball with Virgin's highly unionised workforce.
Related Article
Aviation
Deloitte's call for Virgin emergency cash rejected as liquidity fears rise
In 2017, around 30,000 US workers at Bain part-owned group Toys R US were left without severance pay when the retail chain collapsed. The workers launched a months-long campaign against Bain and former co-owners KKR and the Vornado Realty Trust, enlisting high-profile supporters including former Democratic Presidential candidates Elizabeth Warren and Bernie Sanders.
Bain and KKR created a $US20 million hardship fund for workers in late 2018. This amount was on top of an earlier settlement which was short of the $US75 million workers said they were owed.
There has also been criticism of the treatment of workers at music retailer Guitar Center when it was under Bain majority control. In 2017, the US National Labor Relations Board found the then Guitar Centre engaged in illegal union-busting activities in 2014 when Ares Management and Bain owned the group including "threatening employees with reduced benefits because of their union membership or affiliation", "interrogating workers about their support for their union" and "creating the impression that employee support for the Union was under surveillance".
Worker representatives also fear that American ultra-low cost airline investors Indigo Partners and its partner Oaktree Capital would turn Virgin into a scaled-back budget airline which would employ far fewer people.
Australian private equity firm BGH Capital, which is working on a bid with AustralianSuper, has proposed restarting Virgin with as few as 15 planes in the sky, which was also poorly received by union representatives, sources said.
“There are concerns about many of the private equity bidders,” one union figure said.
Brookfield - which dropped out of the formal sale process two weeks ago but made another bid on Friday hoping to remain a contender - remains the unions’ preferred bidder. They also view the Richard Branson-linked Cyrus Capital favourably after it outlined a plan to maintain Virgin as a full-service international airline.
Rgds
S28- BE
Extract here:
Union kingmakers fear Bain Capital's bid for Virgin Australia
By Sarah Danckert and Patrick Hatch
May 31, 2020 — 11.45pm
Unions controlling key votes in the Virgin Australia administration process have expressed serious concerns about Bain Capital's tilt at the airline due to the buyout firm's history of slashing jobs and imposing harsh conditions on workers offshore.
Virgin's 9000 employees are owed a combined $450 million from the collapsed airline and will be a vital voting block to get any rescue bid approved. As a result, the unions representing the carrier's workers have emerged as kingmakers in the bidding process which will this week hit a pivotal juncture.
Bain part-owned Toys R Us has a patchy industrial relations record in the US, particularly when dealing with workers made redundant during insolvency. Credit:Jane Dyson
Bain, which in Australia is led by former Olympic diver Michael Murphy, is among the contenders for the airline alongside local private equity outfit BGH Capital, Richard Branson linked Cyrus Capital, US airline investor Indigo Partners and Canadian funds management giant Brookfield.
Virgin's administrators Deloitte spent the weekend working through second round bids and could announce a shortlist of two final bidders as soon as Monday.
Ahead of the decision, unions have aired concerns with Deloitte about Bain Capital's track record in the US where it has cut jobs and slashed worker entitlements. Transport Workers Union national secretary Michael Kaine said that while Bain had launched a public relations blitz last week to put forward its plans "this isn’t about the number of column inches you get".
"It’s about how you can demonstrate that you can get Virgin back in the air in a way that serves workers and the travelling public,” Mr Kaine said.
Four bidders for Virgin Australia have been shortlisted and will be revealed to the public.
Mr Kain noted that Bain had a patchy record on respecting workers’ rights.
"Our message to Bain and any other bidders is that Virgin’s workers are a unique workforce, they’re highly skilled, they’re highly dedicated, they’re fiercely concerned about the future of the airline and they are a force to be reckoned with for any bidders which doesn’t have Virgin’s long-term future as a priority, and which believes they can ram through plans which might ultimately hurt Australia’s chances of having a strong second airline."
Union sources said they are also troubled by Bain’s track record on industrial relations, and after meeting with the group last week believed that the private equity firm would play hard-ball with Virgin's highly unionised workforce.
Related Article
Aviation
Deloitte's call for Virgin emergency cash rejected as liquidity fears rise
In 2017, around 30,000 US workers at Bain part-owned group Toys R US were left without severance pay when the retail chain collapsed. The workers launched a months-long campaign against Bain and former co-owners KKR and the Vornado Realty Trust, enlisting high-profile supporters including former Democratic Presidential candidates Elizabeth Warren and Bernie Sanders.
Bain and KKR created a $US20 million hardship fund for workers in late 2018. This amount was on top of an earlier settlement which was short of the $US75 million workers said they were owed.
There has also been criticism of the treatment of workers at music retailer Guitar Center when it was under Bain majority control. In 2017, the US National Labor Relations Board found the then Guitar Centre engaged in illegal union-busting activities in 2014 when Ares Management and Bain owned the group including "threatening employees with reduced benefits because of their union membership or affiliation", "interrogating workers about their support for their union" and "creating the impression that employee support for the Union was under surveillance".
Worker representatives also fear that American ultra-low cost airline investors Indigo Partners and its partner Oaktree Capital would turn Virgin into a scaled-back budget airline which would employ far fewer people.
Australian private equity firm BGH Capital, which is working on a bid with AustralianSuper, has proposed restarting Virgin with as few as 15 planes in the sky, which was also poorly received by union representatives, sources said.
“There are concerns about many of the private equity bidders,” one union figure said.
Brookfield - which dropped out of the formal sale process two weeks ago but made another bid on Friday hoping to remain a contender - remains the unions’ preferred bidder. They also view the Richard Branson-linked Cyrus Capital favourably after it outlined a plan to maintain Virgin as a full-service international airline.
S28- BE
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Ex- the AFR: Steve Ciobo advising Bain's Virgin bid.....
Link here: https://www.afr.com/rear-window/stev...0200531-p54y1h
Extract here:
Rgds
S28- BE
Extract here:
" -Rear Window
Steve Ciobo advising Bain's Virgin bid
Joe Aston Columnist
May 31, 2020 – 11.58pm
Whoever emerges as Virgin Australia's new owner, and in whatever form the airline takes, the voluntary administration process will have been a consultants' picnic. Oodles of professional services mercenaries attached to the various bids – Bain, for instance, has 22 external advisers engaged "around the clock" on theirs – will no doubt be extra grateful for the fee bonanza at such a dismal point in the economic cycle.
One former Somebody lending his expertise and entrée to Bain's bid is former federal minister Steven Ciobo, no doubt offering unparalleled insight into the direction of the wind, at any given moment, in Scott Morrison's Canberra.
A curious choice. Does the Prime Minister's door even remain ajar to his former defence industry minister?
You'll recall defence minister Christopher Pyne was allowed to serve out his final days in Parliament on the frontbench after announcing he would not contest the 2019 election. So, too, was human services minister Michael Keenan, despite his character assessment of his new leader as an "absolute arsehole". Very pointedly, however, Ciobo was not extended the same courtesy, sent to the backbench just 2½ months from the May poll.
Having backed Peter Dutton in the Liberal leadership spill (and even run as deputy, garnering more votes, at least, than poor, deluded Greg Hunt), Ciobo had already been demoted from the trade and tourism portfolio when Morrison appointed his first cabinet in August 2018, a portfolio he'd really come to know and love. Ciobo spent almost as many nights in the key Virgin Australia destination of Los Angeles than George Christensen did in Angeles City – and Ciobo was even ordered by the (previous) Prime Minister's Office to cut it out. Who knew West Hollywood was such a nerve centre for bilateral trade negotiations with Indonesia or Peru?
Hey, at least Ciobo hasn't been reduced to lobbying for L'Oréal.
Over at rival Virgin bidder Brookfield, Canberra's vagaries are being interpreted for the Canadians by GRA Cosway. No government relations advice is required at BGH Capital, where principal Ben Gray considers himself an ex-officio member of federal cabinet. Why pay for a pale imitation when you've got the real thing engraved on the door?
Joe Aston has helmed The Australian Financial Review's Rear Window column since 2012. He is based in Los Angeles. Connect with Joe on Facebook and Twitter. Email Joe at [email protected] "
Steve Ciobo advising Bain's Virgin bid
Joe Aston Columnist
May 31, 2020 – 11.58pm
Whoever emerges as Virgin Australia's new owner, and in whatever form the airline takes, the voluntary administration process will have been a consultants' picnic. Oodles of professional services mercenaries attached to the various bids – Bain, for instance, has 22 external advisers engaged "around the clock" on theirs – will no doubt be extra grateful for the fee bonanza at such a dismal point in the economic cycle.
One former Somebody lending his expertise and entrée to Bain's bid is former federal minister Steven Ciobo, no doubt offering unparalleled insight into the direction of the wind, at any given moment, in Scott Morrison's Canberra.
A curious choice. Does the Prime Minister's door even remain ajar to his former defence industry minister?
You'll recall defence minister Christopher Pyne was allowed to serve out his final days in Parliament on the frontbench after announcing he would not contest the 2019 election. So, too, was human services minister Michael Keenan, despite his character assessment of his new leader as an "absolute arsehole". Very pointedly, however, Ciobo was not extended the same courtesy, sent to the backbench just 2½ months from the May poll.
Having backed Peter Dutton in the Liberal leadership spill (and even run as deputy, garnering more votes, at least, than poor, deluded Greg Hunt), Ciobo had already been demoted from the trade and tourism portfolio when Morrison appointed his first cabinet in August 2018, a portfolio he'd really come to know and love. Ciobo spent almost as many nights in the key Virgin Australia destination of Los Angeles than George Christensen did in Angeles City – and Ciobo was even ordered by the (previous) Prime Minister's Office to cut it out. Who knew West Hollywood was such a nerve centre for bilateral trade negotiations with Indonesia or Peru?
Hey, at least Ciobo hasn't been reduced to lobbying for L'Oréal.
Over at rival Virgin bidder Brookfield, Canberra's vagaries are being interpreted for the Canadians by GRA Cosway. No government relations advice is required at BGH Capital, where principal Ben Gray considers himself an ex-officio member of federal cabinet. Why pay for a pale imitation when you've got the real thing engraved on the door?
Joe Aston has helmed The Australian Financial Review's Rear Window column since 2012. He is based in Los Angeles. Connect with Joe on Facebook and Twitter. Email Joe at [email protected] "
S28- BE
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"Ciobo spent almost as many nights in the key Virgin Australia destination of Los Angeles than George Christensen did in Angeles City"
Ha ha that's very funny...I live in Ciobos electorate and certainly he was not ever seen around except for junk mail sprouting falsehoods leading up to election time...predictably his replacement is the same...shame
Ha ha that's very funny...I live in Ciobos electorate and certainly he was not ever seen around except for junk mail sprouting falsehoods leading up to election time...predictably his replacement is the same...shame
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Yup Gotya, 'Level' there-
.......!!!
And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????
Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!
Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE
ScepticalOptomist
And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????
Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!
Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE
Yup Gotya, 'Level' there- .......!!!
And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????
Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!
Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE
And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????
Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!
Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE
Bain is the worst thing that could happen to Virgin and Australia and the staff. The Bain model is simple; suck the life out of what’s left of the business, suck out all the cash as well. Load the business with service and financial contracts that keep Bain sucking cash out for years. Roll the resulting financial turd in glitter and sell it to investors. Profit.
The value of Virgin to Bain is the huge cash flow airlines generate, not the potential for profit. What I think Bain would do is to get their hands on that cash flow for as long as possible. They would do that by making Virgin enter some very one sided contracts with Bain controlled entities. You would start with a leasing entity, a facilities entity, perhaps a fuel hedge/broker entity, a finance factoring entity and maybe others. The ‘’independent’’;Hoho!Haha! Board led by chairman Carla will rush to sign such deals.
‘’You then have a zombie company. The new Virgin looks like an airline, but it’s paying Bain a premium through a range of expensive one sided leasing and service contracts. You then dress up Virgin as a new bride and flog her to the stock market. Mums and dads will buy. Bain is still raking in the cash through its service provision entities. Then it parcels them up and sells them to the stock market before the contracts run out....making more money from gullible investors. Virgin is left with a huge cost base, ageing aircraft and no profits. Bain sucked the life out of it.
Of course in the old days they could just rip up the company and sell it to competitors. Not possible today.
The value of Virgin to Bain is the huge cash flow airlines generate, not the potential for profit. What I think Bain would do is to get their hands on that cash flow for as long as possible. They would do that by making Virgin enter some very one sided contracts with Bain controlled entities. You would start with a leasing entity, a facilities entity, perhaps a fuel hedge/broker entity, a finance factoring entity and maybe others. The ‘’independent’’;Hoho!Haha! Board led by chairman Carla will rush to sign such deals.
‘’You then have a zombie company. The new Virgin looks like an airline, but it’s paying Bain a premium through a range of expensive one sided leasing and service contracts. You then dress up Virgin as a new bride and flog her to the stock market. Mums and dads will buy. Bain is still raking in the cash through its service provision entities. Then it parcels them up and sells them to the stock market before the contracts run out....making more money from gullible investors. Virgin is left with a huge cost base, ageing aircraft and no profits. Bain sucked the life out of it.
Of course in the old days they could just rip up the company and sell it to competitors. Not possible today.