Virgin Australia - Phoenix Rising from the Ashes?
Virgin Australia - Phoenix Rising from the Ashes?
it’s been a couple of years since a thread regarding Virgin Australia was created so I hope this gets the ball rolling.
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With the dust settling from the Virgin Australia administration there seems to be new rumours on the ramp regarding the future of VA and VARA.
Latest news suggests Bain capital are investing in Virgins future for the long term despite reports they wanted to float the company next year (2023). With major debt ties finally cut it seems the airline has no where to go than up.
Despite their loss of circa $76.8mil (considerably less than previous years under previous management) in fiscal year 2021, and Covid finally being over, will we see Virgin make a push for the skies or proceed with caution with Bain heaving at the reigns?
I am no expert but I would suggest the best way forward for Virgin would be to consolidate its domestic operation around Australia, stay competitive with Bonza and Qantas and restart international operations ASAP. With Qantas operating almost all of international flights out of Australia under the careful watch of the ACCC it seems ridiculous that none of the 787’s that Virgin hinted at buying years ago are even on the cards yet. Another opportunity wasted.
Are the 25 737 MAX’s arriving in 2023 replacing the dinosaur 737’s hobbling around their network or will they be used to supplement the short haul international network out of the east coast and potentially create new opportunities out of Perth?
The newest rumours on the block suggest that VA offshoot VARA will obtain Boeing 737-700 jets. Rumours suggest that VA have purchased 10 ex KLM 700 series and have them operate on the west coast. With an ever ageing Fokker 100 fleet surely these jets are intended as a replacement? Why though would VA commit to these aircraft rather than investing in their growing A320 fleet and run A319’s in the Pilbara? Common Airbus fleet type would streamline maintenance, crewing and general ops?
From a commercial standpoint, one would assume the 737-700 would limit VARA’s ASK, compromise its ability to consolidate its position servicing the WA market and more importantly affect its ability to compete against an ever expanding Network fleet? Or are these aircraft simply replacement frames for the F100’s servicing the FIFO market? From what I’ve been told, the F100 runs rings around the 737 in regards to its performance out of high elevation high temperature airports - does the 737 even make sense in the summer? Jeez I hope they got the numbers right there if it’s true.
The purchase of the 737-700’s is also a complicated move in regards to the AOC’s. I can only assume that VARA still have the A320, F100, F70 and ATR-72 on their AOC. It seems silly to add another aircraft on the list when VA already have the 737 on their AOC? Is this Bains subtle way of ditching VARA and absorbing all operations under the VA AOC or rather a strategic move to have VARA operate 737 routes for much less in WA just like network is doing for Qantas?
I miss the presence that Virgin once had in Australian aviation. I miss seeing their 330’s running East-West and tripplers running to LAX. I hope to see this amazing airline achieve huge success in the future because we all know at times they offer a damn lot more than other airlines do in this country.
———————————————————————————————————————————————————
With the dust settling from the Virgin Australia administration there seems to be new rumours on the ramp regarding the future of VA and VARA.
Latest news suggests Bain capital are investing in Virgins future for the long term despite reports they wanted to float the company next year (2023). With major debt ties finally cut it seems the airline has no where to go than up.
Despite their loss of circa $76.8mil (considerably less than previous years under previous management) in fiscal year 2021, and Covid finally being over, will we see Virgin make a push for the skies or proceed with caution with Bain heaving at the reigns?
I am no expert but I would suggest the best way forward for Virgin would be to consolidate its domestic operation around Australia, stay competitive with Bonza and Qantas and restart international operations ASAP. With Qantas operating almost all of international flights out of Australia under the careful watch of the ACCC it seems ridiculous that none of the 787’s that Virgin hinted at buying years ago are even on the cards yet. Another opportunity wasted.
Are the 25 737 MAX’s arriving in 2023 replacing the dinosaur 737’s hobbling around their network or will they be used to supplement the short haul international network out of the east coast and potentially create new opportunities out of Perth?
The newest rumours on the block suggest that VA offshoot VARA will obtain Boeing 737-700 jets. Rumours suggest that VA have purchased 10 ex KLM 700 series and have them operate on the west coast. With an ever ageing Fokker 100 fleet surely these jets are intended as a replacement? Why though would VA commit to these aircraft rather than investing in their growing A320 fleet and run A319’s in the Pilbara? Common Airbus fleet type would streamline maintenance, crewing and general ops?
From a commercial standpoint, one would assume the 737-700 would limit VARA’s ASK, compromise its ability to consolidate its position servicing the WA market and more importantly affect its ability to compete against an ever expanding Network fleet? Or are these aircraft simply replacement frames for the F100’s servicing the FIFO market? From what I’ve been told, the F100 runs rings around the 737 in regards to its performance out of high elevation high temperature airports - does the 737 even make sense in the summer? Jeez I hope they got the numbers right there if it’s true.
The purchase of the 737-700’s is also a complicated move in regards to the AOC’s. I can only assume that VARA still have the A320, F100, F70 and ATR-72 on their AOC. It seems silly to add another aircraft on the list when VA already have the 737 on their AOC? Is this Bains subtle way of ditching VARA and absorbing all operations under the VA AOC or rather a strategic move to have VARA operate 737 routes for much less in WA just like network is doing for Qantas?
I miss the presence that Virgin once had in Australian aviation. I miss seeing their 330’s running East-West and tripplers running to LAX. I hope to see this amazing airline achieve huge success in the future because we all know at times they offer a damn lot more than other airlines do in this country.
I was told the -700s are going East coast in an effort to hold onto the 50 odd Tiger slots, and less rely on Alliance in smaller markets in the longer run.
Last edited by PoppaJo; 20th Apr 2022 at 20:35.
I believe the 700’s are leased not owned. I also believe a decision is yet to be announced as to where they will end up. The decision was meant to have been made in early April.
Hopefully widebodies are on the cards too. They have gotten rid of the majority of their debt, have regained market share and a have a pretty valuable frequent flyer program. They also managed to cut their cost base through administration. Bain picked up a bargain and will make an absolute motza out of it. However they could also sit back and take in the yearly profits which could be in the billions if they play their cards right.
Meanwhile the opposition now has more debt than virgin did when it went into administration.
Both airlines also have disgruntled staff. Changing the attitudes towards staff and their T&C’s could make a difference towards the airlines success.
Hopefully widebodies are on the cards too. They have gotten rid of the majority of their debt, have regained market share and a have a pretty valuable frequent flyer program. They also managed to cut their cost base through administration. Bain picked up a bargain and will make an absolute motza out of it. However they could also sit back and take in the yearly profits which could be in the billions if they play their cards right.
Meanwhile the opposition now has more debt than virgin did when it went into administration.
Both airlines also have disgruntled staff. Changing the attitudes towards staff and their T&C’s could make a difference towards the airlines success.
Highly likely the MAX10 will slip into 2024 while they sort out the alerting issue amongst other certification problems. Wouldn’t expect any word from Boeing until the end of the year.
They will need all the aircraft they can get in the meantime.
They will need all the aircraft they can get in the meantime.
Qantas is working very hard to helping Virgin's recovery. zero investment, shocking management, poor treatment of staff, love of outsourcing and overall arrogance means they've handed everything to their competitors, all of them risen out of nothing (rex) or from the ashes (virgin).
does a great mardi gras though.
does a great mardi gras though.
Lower demand routes and I believe pavement concessions
I think an important item to note is the debt levels and cost base. Virgin are being very rational with their growth/expansion. They aren’t chasing the competition. They are doing their own thing and doing it well.
Qantas on the other hand are laden with debt and with an upcoming fleet renewal, will have some significant debt/cash outflow to come.
Virgin achieved a sweet deal on the max’s from my understanding with a fair portion of the order already paid for by the previous owners.
Just some food for thought.
Qantas on the other hand are laden with debt and with an upcoming fleet renewal, will have some significant debt/cash outflow to come.
Virgin achieved a sweet deal on the max’s from my understanding with a fair portion of the order already paid for by the previous owners.
Just some food for thought.
However they could also sit back and take in the yearly profits which could be in the billions if they play their cards right.
comedy gold that. Billions of dollars eh??I like that they're back. And they're doing a great job so far. Have enjoyed flying with them. But billions of dollars of profit, that's really funny.
I hope to see this amazing airline achieve huge success in the future because we all know at times they offer a damn lot more than other airlines do in this country.
In what way are VA amazing? Was it the $2 initial issue price followed by a decade below sixty cents or the billions lost and written off by creditors to give them a clean sheet to start with?
PS Why would VARA want to ditch the A320s that they operate for 737s?
I hope they do well but you lost me there…What do they offer that is a “damn lot more” than other airlines in Australia?
In what way are VA amazing? Was it the $2 initial issue price followed by a decade below sixty cents or the billions lost and written off by creditors to give them a clean sheet to start with?
PS Why would VARA want to ditch the A320s that they operate for 737s?
In what way are VA amazing? Was it the $2 initial issue price followed by a decade below sixty cents or the billions lost and written off by creditors to give them a clean sheet to start with?
PS Why would VARA want to ditch the A320s that they operate for 737s?
The A320’s are leased so why not let them expire and use the 73’s?
That mini alliance is surprising as well! Imagine booking a virgin ticket from Sydney to Canberra and ending up on that Saab! Next time I’d be booking direct with Qantas with the ‘risk’ of being put on a dash 8 as a worst case scenario! The rebranding to Link Airways was the best thing corporate air ever did - put them in bed with the big guys!
This makes sense - take back some of the work that VA are palming off to Alliance. Imagine what they could have done if they kept their ATR’s!
Not saying it will happen overnight but it could well happen in the next 5 years when they have a bigger network which could include wide body operations.
I believe the 700’s are leased not owned. I also believe a decision is yet to be announced as to where they will end up. The decision was meant to have been made in early April.
Hopefully widebodies are on the cards too.
Meanwhile the opposition now has more debt than virgin did when it went into administration.
Hopefully widebodies are on the cards too.
Meanwhile the opposition now has more debt than virgin did when it went into administration.
I hope so too. I’d love to avoid paying Qantas fares to go anywhere out of Australia - we desperately need that healthy competition to drive the prices back down. Mind you Virgin charged a bucket load between cities when the borders opened up so who’s to say the prices will be at all cheap.
True - But Qantas have more equity and can therefore expand quicker than what Virgin can.
If there are any F100s at VARA that needs replacing, it's probably more likely that Bain will acquire more A320ceo leases to replace any of the F100s, especially those from the ex-Tiger Australia or ex-Tiger Singapore/Scoot fleets. Largely for commonality purposes.