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VARA to be off-loaded?

Old 26th Mar 2021, 04:44
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VARA to be off-loaded?

Rumours circulating today that Bain Capital intend to offload VARA as part of a further review of the Group's operations. Alliance have been offered 'first dibs' but have walked away from the proposal / offer given they have just acquired the 14 E-Jets.

Another Bain broken promise to staff?

Last edited by Agent_86; 26th Mar 2021 at 05:00.
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Old 26th Mar 2021, 05:01
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Then what? Gift an entire market to QF??
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Old 26th Mar 2021, 05:07
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I thought VARA was profitable? Its more the contracts that are worth anything

If Alliance arnt interested, who would be - Skippers - unlikely, Network - unlikely, Cobham - maybe?

Rex......?
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Old 26th Mar 2021, 05:15
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Originally Posted by neville_nobody View Post
Then what? Gift an entire market to QF??
Apparently part of the broader business review, Ms Jayne wants to concentrate on establishing the 'Hybrid' VA Mainline and do away with the associated costs of running VARA as a side gig. Bain are obviously pushing the thumbscrews to save even more money so they can get ready for a quick 'flip' on VA.
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Old 26th Mar 2021, 05:18
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Originally Posted by jrfsp View Post
I thought VARA was profitable? Its more the contracts that are worth anything
Exactly, contracts are important to offload VARA as a going concern to an interested buyer. As for profitability that is still a mixed argument.

As for REX buying it, would they even want to take on another project?
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Old 26th Mar 2021, 05:25
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Obviously there are some medium to long term risks with that business (fleet renewal, contracts up and down). As well as the management distraction which is probably the key reason behind any offload.

I donít think many will disagree, we all know Virgin needs to wind the clock back 15 years and go back to the roots of a NG operation only.

Might not be all bad news for those working in the west. If itís a money maker with long term contracts someone will bite.
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Old 26th Mar 2021, 05:34
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Apparently part of the broader business review, Ms Jayne wants to concentrate on establishing the 'Hybrid' VA Mainline and do away with the associated costs of running VARA as a side gig. Bain are obviously pushing the thumbscrews to save even more money so they can get ready for a quick 'flip' on VA.
It would be interesting to see what the thinking is about on carriage. I suspect the whole FIFO model is changing in WA with the parochial Labor Government pushing for the entire workforce to be domiciled there. This obviously drives economic activity for WA but in reality how long will that last?? People might be happy to do it for a year or two, but if your entire extended family is on the east coast how practical is it for your family to live in WA as opposed to just doing some sort of FIFO from the east coast?
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Old 26th Mar 2021, 05:41
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Originally Posted by neville_nobody View Post
It would be interesting to see what the thinking is about on carriage. I suspect the whole FIFO model is changing in WA with the parochial Labor Government pushing for the entire workforce to be domiciled there. This obviously drives economic activity for WA but in reality how long will that last?? People might be happy to do it for a year or two, but if your entire extended family is on the east coast how practical is it for your family to live in WA as opposed to just doing some sort of FIFO from the east coast?
Whats this got to do with VARA? Whether the FIFO worker lives in perth or syd/mel, the roster (contract) wouldn't change. The same number of people are required for the shift cycle, they are all mobilizing through PER regardless.
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Old 26th Mar 2021, 05:50
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Profitable for now, there in lies the issues as detailed above. The business model doesn't align with the strategy, maintaining something which needs a 5yr fleet replacement plan along with assoc. costs. Why keep it if you can spin it off for a bit of cash.... and we all know what the 5 year strategy is....
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Old 26th Mar 2021, 05:54
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When will any of this be officially announced? Will the staff still have a right to return to the mothership?
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Old 26th Mar 2021, 06:20
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Originally Posted by Barrt3344 View Post
When will any of this be officially announced? Will the staff still have a right to return to the mothership?
I guess that's a question for Ms Jayne and the Exec. Team. She has been somewhat backward in coming forward with the truth so don't expect an answer straight away.
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Old 26th Mar 2021, 06:38
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Whats this got to do with VARA? Whether the FIFO worker lives in perth or syd/mel, the roster (contract) wouldn't change. The same number of people are required for the shift cycle, they are all mobilizing through PER regardless.
Well everything. If it all goes to a Perth centric model then you have no real competitive advantage and have to scrap against every other contractor vying for the business. If however say 30% of the contract then flowed onto interstate flights that's a different proposition for a national airline. Charter Operators can't compete against a national airline as they can't offer the connections.
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Old 26th Mar 2021, 06:51
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Originally Posted by neville_nobody View Post
Well everything. If it all goes to a Perth centric model then you have no real competitive advantage and have to scrap against every other contractor vying for the business. If however say 30% of the contract then flowed onto interstate flights that's a different proposition for a national airline. Charter Operators can't compete against a national airline as they can't offer the connections.
Huh.. "interstate connections" has minimal input into FIFO contracts. Its costs flying PER - Mine Site/ aircraft size -capability / frequency.
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Old 26th Mar 2021, 06:58
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Originally Posted by didrechambers77 View Post
Profitable for now, there in lies the issues as detailed above. The business model doesn't align with the strategy, maintaining something which needs a 5yr fleet replacement plan along with assoc. costs. Why keep it if you can spin it off for a bit of cash.... and we all know what the 5 year strategy is....
The VA Group Fleet Renewal is planned for 2023 but it seems somewhat 'Mainline Centric'
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Old 26th Mar 2021, 08:02
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Originally Posted by Barrt3344 View Post
Will the staff still have a right to return to the mothership?
That's wishful thinking.
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Old 26th Mar 2021, 08:58
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Also wishful thinking, but I would have thought those mainline staff thrown overboard from the mothership would also get a chance at getting back onboard.
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Old 26th Mar 2021, 11:12
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Not surprising.

How VARA can survive with the legacy agreements it has I don’t know. Sorry, but why the pilots don’t take a hard look at the Alliance and Network terms and wake up is beyond me.

In the new world, If you’re not competitive you’re unemployed.

So sad.
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Old 26th Mar 2021, 15:15
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Originally Posted by Arthur D View Post
Not surprising.

How VARA can survive with the legacy agreements it has I donít know. Sorry, but why the pilots donít take a hard look at the Alliance and Network terms and wake up is beyond me.

In the new world, If youíre not competitive youíre unemployed.

So sad.
You mean like why mainline QF 73 guys are worried about network doing the WA flying? Too bad for them eh? think youíll find VARA T&Cs sit right smack between Network and alliance after the renegotiated EBA during 2020, check FWA 👍🏻

Fits in the VA decision strategy though, sell off the only thing flying and making money throughout this whole mess

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Old 26th Mar 2021, 23:17
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Originally Posted by Barrt3344 View Post
Will the staff still have a right to return to the mothership
How can the crew return to something that they were never a part of? Most crew joined Skywest and became VARA when the business was purchased by VA.
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Old 26th Mar 2021, 23:38
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The VARA people from the ATR who were previously made redundant and have a deed which outlines a return will come back eventually, if they want too, within the deed time frame. If the current VARA op is flogged off, then no, they will not be able to return via a deed, but would have to apply like any other Ďjoe or joetteí off the street. Thatís how I read it. Could be wrong though. It all depends on the fine print, like anything. But why would they want to come back????
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