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Virgin Australia bidder Cyrus favours full-service but only B737s

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Virgin Australia bidder Cyrus favours full-service but only B737s

Old 27th May 2020, 02:40
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Virgin Australia bidder Cyrus favours full-service but only B737s

So while Bain wants Virgin Australia to be more like Virgin Blue, outsider Cyrus says it wants Virgin Australia to remain full-service, but with an all-B737 domestic fleet, no international flights for a while and when international flights resume they'd be on Boeing 787s instead of A330s and B777s.

https://www.smh.com.au/business/comp...26-p54wnl.html
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Old 27th May 2020, 02:42
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Brilliant another Virgin thread.
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Old 27th May 2020, 02:50
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Originally Posted by Ragnor View Post
Brilliant another Virgin thread.
We haven't reached the peak yet...
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Old 27th May 2020, 02:53
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It has the word Virgin in the thread title. Id assume if your sick of virgin threads, youd be smart enough to just pass it by.
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Old 27th May 2020, 03:39
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The big unknown is who picks the winner.

Its fairly clear its on PS watch, and this dialogue is what he is after. So these guys will be the winners on his watch.

Bain and Indigo have their own agenda (which would be better for Virgin in terms of wiping out the Management).
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Old 27th May 2020, 04:06
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The big unknown is who picks the winner.
That would be the creditors.

https://www.mackaygoodwin.com.au/faq...E&gclsrc=aw.ds

https://asic.gov.au/regulatory-resou...y-arrangement/

There is little mystery to the process, only the outcome in each case.
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Old 27th May 2020, 05:39
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Their short-haul international, e.g. within the proposed trans-Tasman bubble, will that be the 738's currently used?
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Old 27th May 2020, 07:40
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Originally Posted by Ragnor View Post
Brilliant another Virgin thread.
It's almost like there's something pretty major going on, around Virgin lately...
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Old 27th May 2020, 08:38
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Cyrus currently has just $4 billion in assets under management. Resurrecting Virgin 'to remain roughly the same size it was before going into voluntary administration in April' will be a $5 billion cash and debt deal. So, there's that.

Branson is underwater on Virgin Atlantic and just watched Virgin Orbit drop a $12 million two-stage rocket into the Pacific Ocean (for those unfamiliar with the project, the rocket was meant to head in the opposite direction). And then there's Virgin Voyages - probably not tracking to the FY20 business plan and not likely to be hitting its FY21 numbers either with a further two 110,000 tonne cruise ships on order. So, in the grand scheme of things I wouldn't think that he's necessarily flush with cash just at the moment.

Cyrus are likely just trying to play up their non-financial credentials to the unions ahead of Friday's short-short-listing.

Last edited by MickG0105; 27th May 2020 at 13:11. Reason: Spelling
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Old 27th May 2020, 09:42
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I would have thought that the administrations would be making the decision who takes the cake.....?
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Old 27th May 2020, 09:44
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Originally Posted by Double_Clutch View Post
I would have thought that the administrations would be making the decision who takes the cake.....?
Not at all. The creditors do.
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Old 27th May 2020, 10:32
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Snoop

Ex- 'a' preceding post (and shall NOT identify, 'IT'- as, am carrying a veritable tranche/posse/plethora of Parasites/Lower-Level Dwellers/and Folk that, have Not done 'Much'.....!!!!!!).

Extract here:
Branson is underwater on Virgin Atlantic and just watched Virgin Orbit drop a $12 million two-stage rocket into the Pacific Ocean (for those unfamiliar with the project, the rocket was meant to head in the opposite direction).
ABC News- link here: https://www.abc.net.au/news/2020-05-...aunch/12286216

Rgds all/be well
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Last edited by Section28- BE; 27th May 2020 at 11:30. Reason: Gotta, run 'Plethora' in 'this/being your' fool's paradise- do you not....???
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Old 27th May 2020, 11:51
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Originally Posted by MickG0105 View Post
Cyrus currently has just $4 billion in assets under management. Resurrecting Virgin 'to remain roughly the same size it was before going into voluntary administration in April' will be a $5 billion cash and debt deal. So, there's that.

Branson is underwater on Virgin Atlantic and just watched Virgin Orbit drop a $12 million two-stage rocket into the Pacific Ocean (for those unfamiliar with the project, the rocket was meant to head in the opposite direction). And then there's Virgin Voyages - probably not tracking to the FY20 businsss plan and not likely to be hitting its FY21 numbers either with a further two 110,000 tonne cruise ships on order. So, in the grand scheme of things I wouldn't think that he's necessarily flush with cash just at the moment.

Cyrus are likely just trying to play up their non-financial credentials to the unions ahead of Friday's short-short-listing.
No secret I think Micks posts are as informative as any, more so than most so would encourage more seriously read....and ponder.

The CREDITORS and ONLY the creditors will decide what happens to VA - it is not, and never will be, the administrator.

It is up to the administration to try to convince the creditors that it's to their benefit to cut their losses and accept xxx% o the dollar.
It is up to the administration to try to convince any serious buyer to throw in xxx billions (totally dead money) to tell the creditors to piss off.
THEN the buyer has to have the $$ to keep the operation going, revamp, renew....whatever buzzwords you want to employ.

Mick I think is suggesting Cyrus don't have the financial power required to accomplish the above.

Does anyone - apart from (maybe) someone who sees assets to be stripped?

Apologies Mick If I've misunderstood or misquoted you, from what I see what you say is just fair common sense, well imparted with no malice intended to anyone.

Time will tell.
Cheers
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Old 27th May 2020, 13:09
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Originally Posted by galdian View Post
Mick I think is suggesting Cyrus don't have the financial power required to accomplish the above.

Does anyone - apart from (maybe) someone who sees assets to be stripped?

Apologies Mick If I've misunderstood or misquoted you, from what I see what you say is just fair common sense, well imparted with no malice intended to anyone.
Spot on, that is what I'm suggesting. Cyrus are not a big player.

Back of the napkin, it's going to take $5 billion give or take a few hundred million to resurrect VA as a Qantas Mini-Me (full service domestic + international + LCC). If that's Cyrus's plan they will need a deep pocketed partner.

Same same with Indigo, they're about the same size as Cyrus. That said, Indigo wouldn't be buying into the Qantas Mini-Me delusion - Bill Franke hasn't been successful in the industry for 35 years for no good reason. They would have their eyes on something like a $2.5 - 3 billion cash and debt deal with fleet of about 50 narrow bodies and half the current workforce flying domestic and trans-Tasman. That's not going to get a tick from the unions though.

Bain and BGH/AusSuper/Temasek are the only ones currently in the race that can fund the Qantas Mini-Me delusion. Bain would know that that model won't make money for a couple of years, at best, and their preference will be for something leaner and meaner. Enter the unions. Lean and mean is a hard sell to them hence Bain's 'let's make flying fun again' - that was a pitch to the employees, not the customers.

BGH might just be dumb enough to try the Delusion but as they'll need to turn to AusSuper for probably half the funding I think they'll struggle to make a bankable investment case. Who knows though, stranger things have happened when super funds want to get creative.

The further complicating factor is that everything has to happen at the speed of heat because Deloitte probably only has 30 days of runway left.

Although the real rub in these proceedings is that you've got VA's management and the unions being confronted by real airline/business people for the first time in over a decade, possibly ever. It's classical clash of cultures stuff - on one side a bunch who've repeatedly rewarded failing to succeed, people who believe that they were just one tweak of the business away from being great and on the other you've got a bunch with a totally antithetical approach; failing is never acceptable and they've got a suitcase of wire brushes of various grades that they're not afraid to use in order to avoid it. And the interactions between the two are being forced to play out in a contrived manner over a very compressed time frame.
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Old 27th May 2020, 13:26
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Originally Posted by MickG0105 View Post
Spot on, that is what I'm suggesting. Cyrus are not a big player.

Back of the napkin, it's going to take $5 billion give or take a few hundred million to resurrect VA as a Qantas Mini-Me (full service domestic + international + LCC). If that's Cyrus's plan they will need a deep pocketed partner.

Same same with Indigo, they're about the same size as Cyrus. That said, Indigo wouldn't be buying into the Qantas Mini-Me delusion - Bill Franke hasn't been successful in the industry for 35 years for no good reason. They would have their eyes on something like a $2.5 - 3 billion cash and debt deal with fleet of about 50 narrow bodies and half the current workforce flying domestic and trans-Tasman. That's not going to get a tick from the unions though.

Bain and BGH/AusSuper/Temasek are the only ones currently in the race that can fund the Qantas Mini-Me delusion. Bain would know that that model won't make money for a couple of years, at best, and their preference will be for something leaner and meaner. Enter the unions. Lean and mean is a hard sell to them hence Bain's 'let's make flying fun again' - that was a pitch to the employees, not the customers.

BGH might just be dumb enough to try the Delusion but as they'll need to turn to AusSuper for probably half the funding I think they'll struggle to make a bankable investment case. Who knows though, stranger things have happened when super funds want to get creative.

The further complicating factor is that everything has to happen at the speed of heat because Deloitte probably only has 30 days of runway left.

Although the real rub in these proceedings is that you've got VA's management and the unions being confronted by real airline/business people for the first time in over a decade, possibly ever. It's classical clash of cultures stuff - on one side a bunch who've repeatedly rewarded failing to succeed, people who believe that they were just one tweak of the business away from being great and on the other you've got a bunch with a totally antithetical approach; failing is never acceptable and they've got a suitcase of wire brushes of various grades that they're not afraid to use in order to avoid it. And the interactions between the two are being forced to play out in a contrived manner over a very compressed time frame.


Anyone want to argue with the fundemtals as described?
Seriously??

Cheers
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Old 27th May 2020, 16:08
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B737's? ... Yep that is truly sensible one type to go for, the travelling public just love B737's in recent times, the type hasn't received any bad publicity whatsoever!
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Old 27th May 2020, 20:24
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Keeps coming back to the point where it has to go into receivership and rise from the ashes after that. The huge problem in that scenario is the AOC is effectively lost and a new one will need to be obtained.

That will take months.
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Old 27th May 2020, 21:38
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Originally Posted by Rashid Bacon View Post
Keeps coming back to the point where it has to go into receivership and rise from the ashes after that. The huge problem in that scenario is the AOC is effectively lost and a new one will need to be obtained.

That will take months.
That might work out alright really. Aviation is not going to be busy until next yr the individual governments are dragging their heals soon no one will have money to travel. New VA in 12 months might work out better because QF and JQ will be in that position this time next yr.
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Old 27th May 2020, 21:57
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Bacon, Rasher ..”That will take months”.... True, but surely not unreasonable to assume that work on it has already been commenced by the interested parties. Also, an accelerated and expedient process both technically and politically would be more than likely - possibly even a new land speed record for box ticking by CASA.

MickGO105, ... spot on. Self evidently, uppermost in the minds of the bidders will be assuming the least possible percentage of debt followed by minimising operating costs. Both of which will make for unhappy creditors and unions. Despite which, I can’t see either of them considering the nuclear option. Hobson’s choice.
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Old 28th May 2020, 01:05
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Originally Posted by Rashid Bacon View Post
Keeps coming back to the point where it has to go into receivership and rise from the ashes after that. The huge problem in that scenario is the AOC is effectively lost and a new one will need to be obtained.

That will take months.
I clearly don't know the rules around this but, with that scenario in mind, could a new owner buy the TT AOC & set up, then VA goes into receivership?
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