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Branson brings Virgin blue at Sydney airport to a head

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Branson brings Virgin blue at Sydney airport to a head

Old 4th Nov 2002, 19:03
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Branson brings Virgin blue at Sydney airport to a head

Tues "Melbourne Age" 5/11/02

Branson brings Virgin blue at Sydney airport to a head
November 5 2002
By Colin Kruger

Virgin boss Sir Richard Branson this week hopes to end a bitter six-month stand-off with Sydney Airport Corp Ltd over Virgin Blue's attempts to lease part of the former Ansett terminal.

Speaking in Sydney yesterday, he said that while he would not agree to a deal that would force up air fares, he wanted the issue settled "either way" before he left Australia next week.

Virgin Blue says that after the airport was sold to a Macquarie Bank-led consortium, SACL's management reneged on a handshake deal to lease the terminal.

"We can't afford to give in on it, and I'm hopeful that sense will prevail," Sir Richard said.

But if a deal was not struck while Sir Richard was in Australia the airline would "go off and do something else", he said.

Meanwhile, in London, Will Whitehorn, Sir Richard's right-hand man, said that Virgin Blue, jointly owned with transport group Patrick Corporation, was looking to float possibly in the first quarter of next year.

"We put in £10 million ($A27.9 million) to start it, sold half to Patrick for $100 million and now Australian analysts are valuing it at between $1.2 billion and $1.4 billion. Virgin Blue is probably the most successful investment we have made for a while."

The news was even more upbeat on other fronts for the Virgin machine, with new market promotions expected to help boost subscriber numbers for Virgin Mobile, the group's Australian mobile phone unit, from the current 230,000 to 400,000 over the next 18 months.

The "Flash" promotion will turn Virgin Mobile phones into "virtual discount cards", allowing discounts at 400 shops, restaurants clubs and bars across Australia from today.

"You don't have to fill in forms; you just literally have to have a Virgin mobile phone. We don't even need to know who you are," Sir Richard said at the launch in Sydney yesterday.

He said Virgin Mobile was "about on budget" and forecast it would become profitable during the 18 months of the subscriber push.

"I don't think it has actually been harder than we expected," Sir Richard said of the Australian mobile phone market. "We're very, very pleased with the way mobile is going in Australia."

Virgin Mobile had a loss of $72 million in the year to March 31, widening from a $44 million loss a year earlier, according to SingTel Optus accounts for the period. Virgin has 75 per cent of Virgin Mobile while SingTel Optus owns the rest.

Sir Richard also announced plans for the largest Virgin Megastore in Australia, which will be located in Martin Place, Sydney. The store is expected to open next March.

Mr Whitehorn, said the Virgin empire was having a profitable year, despite torrid markets and persistent rumours it was facing a cash crisis. "None of our companies have a cash requirement. They are all doing very well," he said.

-with AAP

Virgin Blue hopes to end row over Sydney Airport space: Branson
Virgin Blue chairman Richard Branson said he hopes to settle the airline's long-running dispute over the lease of terminal space at Sydney Airport and move in within the next week.

The British tycoon said the row with Sydney Airport Corp. Ltd. (SACL) over the lease of terminal space previously occupied by failed carrier Ansett had gone on long enough and he wanted it settled "either way" before he left Australia at the weekend.

"If things haven't been settled whilst I'm in Australia -- I'm here another week -- then we'll go off and do something different," he said.

"I'm hopeful that sense will prevail and that something will get sorted out hopefully over the next seven days or so."

Branson claimed in June after the airport was sold to the Macquarie Bank-led consortium, that SACL's management reneged on a handshake deal to lease the terminal to Virgin Blue.

He has previously said the airport was demanding "nearly triple" the 17-18 million (9.5-9.9 million US) dollars the airline was prepared to pay for the terminal space.

SACL has denied such deal was ever struck.

Branson said Monday that Virgin would not compromise by accepting another arrangement because if it did it would mean higher fares for Virgin passengers.

"Negotiations have been going on for the past six months and as long as the prerequisite of it not costing our passengers any more takes place, then if we can reach agreement then we would love to see our passengers move into a bigger terminal," he said.

Virgin Blue took court action against SACL in a bid to force the Sydney Airport operator to uphold the agreement claimed to have resulted from talks between Branson and SACL chief executive Tony Stuart.

The case is still continuing.

SACL spokesman Peter Gibbs would not comment on how negotiations were progressing between the two companies, but he said he was hopeful an agreement could be reached.

"We have had ongoing discussions with Virgin Blue and we would hope that we may be able to come to a successful conclusion but I'm not going to put a time frame on it or where the discussions are at the moment," Gibbs said.


Last edited by Wirraway; 4th Nov 2002 at 19:20.
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Old 4th Nov 2002, 21:01
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So after admitting to having made such an astute investment in VB why doesnt the red-headed clown give his pilots a pay rise as originally promised?????
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Old 4th Nov 2002, 23:32
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Talking You Aint Seen Nothing Yet

Heard on the news the other night that VB's inflight magazine had compared a seal on land to a drunken Tommy Raudonikis, and Tommy, rightly so, is extremely p!ssed....If Mr Branson thinks he has a battle with SACL & QF, he is about to go to a whole new level

Maybe he should have his inflight magazine people take a leaf out of the VB website &
As safety is our number one priority, we donít provide sponsorship for high-risk sports.
I'm of the opinion that tackling Tommy Terrific may be a bigger ask then they had bargained on

Report Here

Last edited by nasa; 5th Nov 2002 at 06:25.
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Old 5th Nov 2002, 01:17
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Thumbs down

It's obvious that the pilots got a promise for a pay rise, but forgot to seal the deal with a handshake.
ex-knuck is offline  
Old 5th Nov 2002, 09:25
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No pay rise wouldn't have anything to do with calling the boss a Red Headed Clown would it ?
Guys - stick to driving the bus, others are paid to run the place, as difficult as that seems to be for you to digest at times. You could, of course, start your own show and be your own Red Headed Clown.
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Old 5th Nov 2002, 10:25
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You sound like the red headed clown has looked after you.

Street talk has many saying it is sweet justice for VB pilots to come in and undercut the industry, so effectively in fact, that their management now have no reason to honour a handshake deal or offer a realistic EBA.

What goes around comes around?

Sincerely, good luck guys.

I think VB management are brilliant in regard to containing employee wages.
Gnadenburg is online now  
Old 6th Nov 2002, 00:14
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well it worked... DJ have done the deal
apacau is offline  
Old 6th Nov 2002, 08:26
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It's not Virgins terminal, it's now Macq's. they can do whatever they want with it. They paid top dollar for Syd airport (I assume that included the AN terminal?). Ansett spent 100's of millions on it and virgin want's it for buggar all.

Speaking in Sydney yesterday, he said that while he would not agree to a deal that would force up air fares.
It's worth a bloody lot, therefore it cost big bucks to buy if you want it, which in turn has to be factored into the cost of running a proper airline, therefore fairs would have to go up to cover the costs of having such a fantastic facility, therefore we come back to the realisation that an airline can only be trimmed back so much. Can't have your cake and eat it too. Ansett spent 100's of millions on it, why can't Virgin. They don't deserve to get it for nothing.
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Old 6th Nov 2002, 11:23
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SACL paid $198 million I believe for the Ansett terminal after Patrick pulled out thinking that they had an agreement for access.

Patrick were rumoured to have offered in excess of $200 million.

SACL was then sold.

SACL under the new owners sought to recover approximately $100 million PER YEAR from the prospective tenants of the terminal.

Would anyone other than a bank think that it was acceptable to recover the capital cost for such a large purchase in just under 2 years?

Charge a reasonable price and nobody would complain - try and charge a hugely excessive amount and people have a whinge - and I mean all sectors on the community -

Would you sit back and let the bank make you pay off your home loan in 2 years - only to be told that you won't own it at the end of the 2 years.

Stick Pusher - I reckon $17 odd million per year is a lot of money and still provides SACL with a better return on investment than either of the 2 major airlines get for their massive investments..
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Old 6th Nov 2002, 12:18
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Caveat Emptor.
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