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Virgin 3.0

Old 17th Oct 2020, 22:14
  #541 (permalink)  
 
Join Date: Apr 2010
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Originally Posted by MickG0105 View Post
Neil Hansford has been talking up Virgin transitioning to an ultra-LCC model for about six months now, long before Bain were announced as the new owner.

One thing that he is most assuredly right about though is that you do not need 6,000 staff for a fleet of 56 NBs.
You do have 20 odd VARA aircraft in that figure also. Pilots and CC would be around 4000. I think they do include third party employees in that figure. Considering CC make up a third of the number you can see why they were targeted first for wage cuts. Have not heard anything around outsourcing ground crew at the capitals but only a matter of time I guess.

Bit hard to say if the Pilot and Cabin crew base is overloaded, with reduced overnights, and increased duty hours, ie increased efficiencies as they call it, the headcount is obviously planned as lower but we donít exactly know how much they are planning on sweating the staff yet.

Jetstar are what 800 Pilots with 55 Narrow/10 Wide.
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Old 17th Oct 2020, 22:31
  #542 (permalink)  
 
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[QUOTE=gordonfvckingramsay;10905896]So the predicted 90-100% NO vote is an aberration? I believe the union refused to even present the offer (if you can call it that) to the members as it was so far off the mark.

Nothing stopping Management from presenting it directly though. In fact they probably will, if not already, depending on their level of delusion?

I’ve seen it done before with predictable results.

Last edited by KRUSTY 34; 18th Oct 2020 at 01:18.
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Old 17th Oct 2020, 23:25
  #543 (permalink)  
 
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Originally Posted by KRUSTY 34 View Post
Nothing stopping Management from presenting it directly though Gordon. In fact they probably will, if not already, depending on their level of delusion?

Iíve seen it done before with predictable results.
Of course, and management will get to see the 90+% no vote arrive in real time. Iíve never seen a pilot group united to this degree, even in the face of ďcertain doomĒ, Miss Jayne might have kicked herself an own goal.
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Old 18th Oct 2020, 01:16
  #544 (permalink)  
 
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Originally Posted by gordonfvckingramsay View Post
Of course, and management will get to see the 90+% no vote arrive in real time. I’ve never seen a pilot group united to this degree, even in the face of “certain doom”, Miss Jayne might have kicked herself an own goal.
What will be interesting Gordon, is what will Bain’s move be once the “No” vote comes in?

I can think of a couple of scenarios.
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Old 18th Oct 2020, 01:19
  #545 (permalink)  
 
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Originally Posted by KRUSTY 34 View Post
What will be interesting Gordon, is what will Bainís move be once the ďNoĒ vote comes in?

I can think of a couple of scenarios.
Go on...do tell.
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Old 18th Oct 2020, 01:28
  #546 (permalink)  
 
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Originally Posted by KRUSTY 34 View Post
What will be interesting Gordon, is what will Bainís move be once the ďNoĒ vote comes in?

I can think of a couple of scenarios.

A "no" vote could mean liquidation so a pyrrhic victory to the naysayers. Don't bite the hand that feeds you...
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Old 18th Oct 2020, 01:43
  #547 (permalink)  
 
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Originally Posted by TBM-Legend View Post
A "no" vote could mean liquidation so a pyrrhic victory to the naysayers. Don't bite the hand that feeds you...
Ever tried to take a bone away from a dog thats been abused?
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Old 18th Oct 2020, 01:49
  #548 (permalink)  
 
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Originally Posted by TBM-Legend View Post
A "no" vote could mean liquidation so a pyrrhic victory to the naysayers. Don't bite the hand that feeds you...
Liquidate what? Are there enough assets to liquidate and turn a profit?

As Iíve said before, if Bain are going to do what most believe they will, liquidation and a fast exit (with $200mil from the QLD gov) is going to happen no matter what. A yes vote simply ads to the amount these criminals can abscond with.
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Old 18th Oct 2020, 02:06
  #549 (permalink)  
 
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Originally Posted by KRUSTY 34 View Post
What will be interesting Gordon, is what will Bainís move be once the ďNoĒ vote comes in?

I can think of a couple of scenarios.
As far as Iím aware the two unions have presented the summary of changes the company is seeking. The company has also held two town halls outlining the changes.
However they are yet to present a complete document to anyone as they havenít finished It yet. I imagine it will be a Big no vote based off the crap already being offered. Let alone the other small changes they will try and get through. The pilot body need time to read a full and complete document before voting it up. Part of the reason I think a No vote is coming is based on the lack of information from the company. You donít enter a contract without first seeing it.

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Old 18th Oct 2020, 02:32
  #550 (permalink)  
 
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Originally Posted by TBM-Legend View Post
A "no" vote could mean liquidation so a pyrrhic victory to the naysayers. Don't bite the hand that feeds you...
There's barely any assets to sell off considering the situation. Apart from the most valuable asset, VFF (which seems to be already thrashed), most of their owned aircraft fleet are already used as collateral by the banks. The owned 737s and 777s have mortgages/loans against them applied by the previous owners.
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Old 18th Oct 2020, 02:48
  #551 (permalink)  
 
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Originally Posted by DanV2 View Post
There's barely any assets to sell off considering the situation. Apart from the most valuable asset, VFF (which seems to be already thrashed), most of their owned aircraft fleet are already used as collateral by the banks. The owned 737s and 777s have mortgages/loans against them applied by the previous owners.

I know that however what weapons do the unions have to enforce a positive outcome when they don't have funds to contribute - only words and threats. No government will buy into this.
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Old 18th Oct 2020, 02:56
  #552 (permalink)  
 
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As I’ve said before, if Bain are going to do what most believe they will, liquidation and a fast exit (with $200mil from the QLD gov) is going to happen no matter what.
What most believe? Really.

Why would they spend a couple of billion dollars to liquidate it for a few hundred million?

There is not $200 million in a bucket from the Qld government, mostly a loan facility.

They will pare it back to basics and float it within a couple of years.

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Old 18th Oct 2020, 02:59
  #553 (permalink)  
 
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Originally Posted by TBM-Legend View Post
I know that however what weapons do the unions have to enforce a positive outcome when they don't have funds to contribute - only words and threats. No government will buy into this.
A "no" vote could mean liquidation so a pyrrhic victory to the naysayers. Don't bite the hand that feeds you...
So which one is it? Do they have the ability to liquidate or not?

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Old 18th Oct 2020, 03:20
  #554 (permalink)  
 
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I think some people grossly overestimate the importance of a pilot EBA to an operation. If these guys are so smart, and have planned so far ahead (I've no doubt that's the case), the idea that they'll pack up their bat and ball and go home after the first 'no' vote is laughable.
They'll already have an idea of airframe and pilot numbers, and a 'yes' vote won't save those they already want to cut (I'm willing to bet there won't be job guarantees with the new agreement).
Granted, the pilots' aren't in a great place to negotiate, but if you don't like the deal, vote no. The worst that'll happen is it'll end up in front of the commission and the outcome will most likely be somewhere in between. A 'yes' vote just locks in inferior conditions for years to come.
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Old 18th Oct 2020, 03:21
  #555 (permalink)  
 
Join Date: May 2016
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What's probably worth remembering is that Bain have the Tigerair AOC in their back pocket. They may very well envisage a play for dealing with a resounding no vote that entails winding up Virgin and restarting as something else around the Tiger AOC with essentially clean sheet EBAs across the board. A winding up would necessitate paying out all employee entitlements of what was some $450 million (now somewhat less than that (~ $300 million?) after the recently enacted round of redundancies).

From a purely financial perspective whether you'd go down that path or not would depend whether you thought you could recoup that $300-odd million outlay over the planned holding time for the airline. A quick back-of-the-napkin run of the numbers makes that look doable - if your new clean sheet EBAs gave you a 12.5 percent saving over the current ones, you'd get your $300 million back with interest in three years.

Financially there'd likely also be some rebranding costs to deal with but they would probably net out over three by not having to pay the grinning loon his annual branding fee.

I'm not saying that this will come to pass but you can bet your bottom dollar that Bain will have modelled something like this out.
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Old 18th Oct 2020, 04:02
  #556 (permalink)  
 
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I recall the APA consortium bid for QF back in 2006. The strategy back then was pretty obvious. Dump the unprofitable bits ( international ? ) , increase the value of the profitable bits , Domestic and Frequent Flyer , than flog it off.
But QF was profitable.
How does private equity make a profit out of a loss making enterprise?
Surely by resurrecting it , building on the brand name and frequent flier program and recreating value. In which case it needs its employees.
Despite what the profits of doom are saying ,and I don’t have a dog in the fight , I cant see how it is to their advantage to screw the only people who can make it happen.
Remember that back in 1989 the thing that broke the AFAP was that the airlines offered a new contract with a pay INCREASE , albeit with a much tighter conditions.
Doesn’t seem to me to be the time to be rolling over and taking the unlubricated pineapple just yet.
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Old 18th Oct 2020, 04:41
  #557 (permalink)  
 
Join Date: Oct 2013
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Richard the third

Has anybody seen any documents that indicate how much Branson will earn for the continued use of his brand name? I recall back in and around 2005/06 when the 50th aircraft arrived he was earning around $1m per tail. I donít know what has changed over the years or what the future holds but paying that clown $1m per tail in 2020 would be criminal. Many of his Ďbusinessesí are about as successful and credible as Trumps. Virgin would be better off using the Tiger brand and saving a hell of a lot of money in excessive royalties. Rebranding in itself isnít cheap but in the long term it may be beneficial. Nobody gives a crap about brandnames anymore, itís about the cheapest fare. You could rebrand VA as Epstein Airways or Kim Jong Un Air and as long as the fares are cheap people will fly.
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Old 18th Oct 2020, 04:57
  #558 (permalink)  
 
Join Date: Aug 2009
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How does private equity make a profit out of a loss-making enterprise?

Easy. Make it profitable. And it can. VA was profitable at an operating level. It had a disastrous balance sheet that was hemorrhaging. However, the business could generate positive cash flow (sometimes). It could deliver a strong operating margin, even with all of its problems. Its debt killed it. +4x leverage and an interest cover at 1.2 are horrific metrics for an airline business expose to a lot of volatility and market impacts. Now the wheels have turned. Massively! We have a 'clean-sheet' business that can generate cash. With significantly lower fuel-excluded cASK's, there is no reason why VA will not become a highly-valuable business. And Bain's consultants will go through the business with a fine-tooth comb to drive out cost and leverage global best practices across technology, process etc., to make it a success. Then, once that is all done - they'll either prepare it for a full sale, listing, partial sale (equity partner arrangement) or hang on to it for a longer-term as it returns value to them. Bain Capital does have some credentials in holding on to some of their investments. It isn't all 'pump and thump' tactics as they are made out to be. But nothing will happen until they can return their investment and some.

Has anybody seen any documents that indicate how much Branson will earn for the continued use of his brand name?

$15m annually. They are, however, renegotiating this.

Virgin would be better off using the Tiger brand

There would be licensing costs with Tigerair too. That brand belongs to our friends in Singapore
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Old 18th Oct 2020, 04:58
  #559 (permalink)  
 
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Branson was getting 15mil/yr. Read it somewhere reliable, afr?
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Old 18th Oct 2020, 05:02
  #560 (permalink)  
 
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Originally Posted by On Guard View Post
Branson was getting 15mil/yr. Read it somewhere reliable, afr?
Cheers. Money for jam thatís for sure.
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