PPRuNe Forums

PPRuNe Forums (https://www.pprune.org/)
-   Australia, New Zealand & the Pacific (https://www.pprune.org/australia-new-zealand-pacific-90/)
-   -   Government Loan to Virgin Australia (https://www.pprune.org/australia-new-zealand-pacific/631164-government-loan-virgin-australia.html)

coaldemon 11th Apr 2020 02:48

Whether you like him or not BG has actually hit it on the head. No point funding an entity that can't actually recognise it has costed itself out of the market. This is what Chapter 11 in the US is about. If you can't prove that you will be able to restructure you don't get all the protections and benefits.


The Bullwinkle 11th Apr 2020 02:55


No point funding an entity that can't actually recognise it has costed itself out of the market.
But the moron who did all of that has now gone.
Paul Scurrah (along with Blind Freddy) is acutely aware of how the costs were blown out and he was actively rectifying the situation.
He was making reasonable progress of undoing a decade of mismanagement when this Coronavirus came along.
If there had not been COVID-19, Virgin was definitely on the path to profitability.

markontop 11th Apr 2020 03:02

IRONY
How the nationally of the 40% owners are the same one’s responsible for the pandemic leading to VAH tenuous position.

normanton 11th Apr 2020 03:10


Originally Posted by The Bullwinkle (Post 10746247)
If there had not been COVID-19, Virgin was definitely on the path to profitability.

Funny, I've heard that countless times over the past decade.

Forgive me, but I don't want my tax payer dollars spent on a whim of a gamble.

spektrum 11th Apr 2020 03:32

This is what the ABC is teaching young Australians. Money printing is fine so lets bail everyone out.

https://www.abc.net.au/triplej/progr...lfare/12133292

777Nine 11th Apr 2020 03:34


Originally Posted by The Bullwinkle (Post 10746247)
But the moron who did all of that has now gone.
Paul Scurrah (along with Blind Freddy) is acutely aware of how the costs were blown out and he was actively rectifying the situation.
He was making reasonable progress of undoing a decade of mismanagement when this Coronavirus came along.
If there had not been COVID-19, Virgin was definitely on the path to profitability.

They left it too long and all it was going to take was something like this to push them to go under. Not his fault as the investors have to be held accountable here along with the previous management.

I don't feel that it's right to use taxpayer's money when the investors can easily stump up $1.4billion. Shared between them it's like $350million each.

Dale Hardale 11th Apr 2020 04:33

One of the factors in a continue or fold scenario is the staff entitlements and how much erosion and loss of these entitlements occurs as time goes on and cash is burnt in fixed overheads.

The company is essentially at close to zero operating income, so I would imagine there is some serious soul searching going on at Virgin, to get to the most appropriate outcome for everyone.

The Bullwinkle 11th Apr 2020 05:49

Weekend Australian article by Steve Creedy



Troubled Virgin reduced to a wing and industry prayers

Dark memories of the 2001 Ansett collapse are stalking the Australian aviation industry again as debate rages over the future of Virgin Australia.

They hark back to a traumatic time that led to the loss of 15,000 direct jobs, suicides by former workers, shattered careers, broken companies and higher full-service fares for corporate customers.

It resulted in a $10 ticket tax that raised more than $250m for employee entitlements and resulted in Qantas becoming the 400lb gorilla of Australian aviation.

Questions again are being asked about whether we want to repeat that trauma or see the government step in to ensure that a vital Australian industry remains competitive.

Virgin chief executive Paul Scurrah was managing 550 people at Ansett when the end came in what he describes as one of the most distressing periods of his career.

He recalls seeing families where two or three generations lost their income and economic carnage among businesses that relied on the airline.

Scurrah tells The Weekend Australian this is partly why he has been working tirelessly to avoid a repeat of the “long-lasting” pain of the Ansett collapse.

“A huge amount of businesses went broke but the thing that sticks in my mind most about it is the mental health cost,’’ he says.

“There were many much-loved people who couldn’t see beyond the crisis for whatever reason and that was the most distressing part of the whole exercise.”

Virgin has appealed to the federal government for an urgent “statement of confidence” and $1.4bn in assistance but has yet to receive a response. Analysts are predicting the airline could run out of money within as little as three months.

The dire nature of the situation was underscored on Friday when Virgin cut its already reduced flying schedule to a daily service between Melbourne and Sydney because of the enormous fall in demand.

It continues to fly repatriation flights and some charter services in areas such as the resources sector, but for all intents and purposes it has gone into hibernation after previously standing down 8000 people and announcing it would make 1000 redundant.

It looks grim — it is grim — but it is not Ansett.

The factors behind Ansett’s downfall were many and complex but the trigger was a decision by Air New Zealand to exercise its pre-emptive rights on a half share owned by News Ltd.

A deal had been done for the stake to be taken over by deep-pocketed Singapore Airlines, with the proviso that then Ansett chief executive Rod Eddington stay at the helm.

Air New Zealand was unprepared for the problems at the Australian carrier or to take on the aggressively competitive Qantas, which also had lobbied against Singapore’s involvement.

The move almost killed the Kiwi carrier — the New Zealand government had to step in to save it — and it left a cast-off, debt-laden and gutted Ansett mortally wounded.

Virgin Australia was a long way from the poster boy category of Qantas when it came to pre-COVID-19 profitability, but it was nowhere near the miserable final state of Ansett.

Like other airlines globally, however, it has been devastated by government restrictions, passenger fears and a colossal slump in demand.

“Ansett was a dead dog and Virgin isn’t really,” says CAPA Centre for Aviation chairman emeritus Peter Harbison. “These circumstances are just totally different.”

Qantas has been lobbying hard against Virgin receiving any special assistance, arguing it should be given $4.2bn if Virgin receives $1.4bn, but Harbison argues that the government should be looking not at fairness to Qantas but what is in the public interest.

The latest estimate of Virgin’s economic contribution to Australia is about $11bn but the airline says the loss would amount to $30bn if it were to disappear because of the flow-on impact to jobs, infrastructure and suppliers.

Harbison views the circumstances on the other side of the pandemic as unknown and “potentially worse than most people are contemplating”.

He believes the government faces a choice of letting Virgin collapse or keeping it alive and having “at least the seeds of a competitive environment”.

He is also doubtful that another airline will be rushing to fill the vacuum if Virgin falls over.

“You have Qantas, which is the most powerful domestic airline of any in the world in terms of market coverage and really seriously good management,’’ he says. “What airline in their right minds is going to start up against them?”

There is also another key difference when it comes to the situation with Ansett, according to Virgin founder and former chief executive Brett Godfrey.

He notes that at the time of Ansett’s collapse, there were already two other more efficient airlines operating in Australia — the Qantas Group and the small but disruptive Virgin Blue.

“If you take a step back and look at the differences, they were that you had an airline (Virgin Blue) that had nine aeroplanes in the market at that time and a trajectory that showed it had great potential to fill the void,’’ he says. “And so they were able to step into the breach.

“It’s different this time because you don’t have an indispensable second competitor in the wings.”

Godfrey echoes Harbison’s doubts about a new entrant, arguing: “If Virgin falls over, we end up with a lottery. Given every airline in the world today is hibernating, those that survive to fly ‘tomorrow’ will have their hands full recommencing in their home markets, let alone launching new brands in Australia.”

One similarity with 2001 is Qantas is likely to have excess international aircraft it can deploy in the domestic market to fill some of the void left by a Virgin collapse. The expectation is that domestic travel will take off before international.

Qantas and others have been vocal in arguing that Virgin’s existing shareholders — Etihad Airways, Singapore Airlines, Nanshan group and HNA — should stump up the cash to help Virgin, but there is little faith this will happen.

These are companies embroiled in their own crises and even Singapore Airlines’ long-harboured desire for a foothold in the Australian domestic market is taking a back seat to survival, despite the $US19bn ($21bn) the company is adding to its war chest with the help of its state-owned major investor.

Others believe the government should give foreign carriers the ability to carry passengers on some Australian domestic routes if Virgin fails. But none of the industry figures contacted by The Weekend Australian say they think this system, known as cabotage, is a good idea.

“Cabotage is an interesting theory but it never works in practice,’’ says one former airline chief executive, pointing to the desire by most passengers to take direct flights and the extra expense to airlines of flying just one stop. “It has never worked anywhere because you never get the amount of capacity you need.”

If it turns out that there is another airline willing to jump into the Australian domestic market to replace Virgin, it still would face a plethora of regulatory requirements and the need to sew up commercial agreements on issues such as slots and gates before it can start.

It took Virgin three years of preparation to get its first two planes in the air in 2000 and the Civil Aviation Safety Authority says it takes about 12 months to issue an air operators certificate, depending on the quality of the application.

Nor is rapid growth a given: Virgin’s growth was constrained to a rate of about one aircraft a month — two in some months — as it trained cabin and flight crew and met various regulatory hurdles

Scurrah observes it took 10 years to get Virgin to the point where it had 30 per cent market share and that people overlook the fact it is incredibly difficult to start an airline from scratch, particularly against a powerful competitor such as Qantas.

“It has taken us 20 years to do it. What we would say is that beyond this, if there’s not a robust and competitive two-airline industry on the other side of this crisis, you start the clock again at day one,” he says.

Steve Creedy is a former aviation editor at The Australian who has covered the sector for 25 years.

Lookleft 11th Apr 2020 07:07

Why would you start an airline from scratch when there are airlines such as Rex who could conceivably apply for a HCAOC and operate jets with at least a 30% market share beckoning. Its interesting that the article talks about how long it took Virgin to get an AOC. Impulse actually got their HCAOC before Virgin so it can be done.

Denied Justice 11th Apr 2020 08:19

I wonder if Alliance have got more than a passing interest in a move to a larger domestic operation ?

Paragraph377 11th Apr 2020 08:30


Originally Posted by Denied Justice (Post 10746432)
I wonder if Alliance have got more than a passing interest in a move to a larger domestic operation ?

They certainly have a company structure in place, AOC, COA and accountable people. But they don’t have all the infrastructure that they need, not yet anyway. Big task and they would become an entirely new airline so to speak. Be fun to watch Scott and his battles with CASA on a larger scale. Aircraft on the NZ register, if permissible, would also be interesting. It cuts a measure of CASA out of the loop. Not completely, but partially. CAA are a better regulatory body than Carmody’s CASA clowns any day of the week. Perhaps Scomo could then trip back in CASA staff numbers finally?

There is an old saying; ‘from change comes opportunity’. I have no doubt that there will be some businesses and people out there who will eventually thrive and profit out of the current situation.






Buster Hyman 11th Apr 2020 15:15


It resulted in a $10 ticket tax that raised more than $250m for employee entitlements
When they get the basics wrong, one can safely assume the rest of it is garbage as well.

Oakape 11th Apr 2020 22:05


It resulted in a $10 ticket tax that raised more than $250m for employee entitlements
If I recall correctly, not one cent of the ticket tax went to staff entitlements. It was designed to be a guarantee of staff entitlements. Asset sales managed to cover the bulk of the entitlements (90 + %) & the take from the ticket tax went into general revenue. Something the government was very quiet about!

thec172man 12th Apr 2020 02:33

ACCC???
 

Originally Posted by Blueskymine (Post 10744401)
However Jetstar will be Australia’s second airline if it all goes belly up (Virgin). The ACCC will mandate QF split it and that’ll be that.

I have heard this line a few times, but come on, is it the ACCC's role to create competition?

The ACCC mandate is to "protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and prevent illegal anti-competitive behaviour". It is not there to make sure every business has a competition, otherwise Australia would be one of the worst places to do business, could you imagine every time a competitor goes under, ACCC forcibly breaks up the remaining companies in the same sector all in the name of "competition'?

As for monopolies, well if there is a market for 2 players, there would be someone else who steps up, for all the sentiments that no one would step in the shoes of VA if they go under, maybe that just means that after this crisis, there isn't enough market for more than 1 player?

airdualbleedfault 12th Apr 2020 03:29


Forgive me, but I don't want my tax payer dollars spent on a whim of a gamble.
But you'd be happy with your "taxpayer dollars" going to 10000 centrelink cheques a fortnight? Let me take a wild guess here, you're employed somewhere in the QF group?

Paragraph377 12th Apr 2020 03:41

To bail or not to bail??
 
One of the ‘unseen’ issues with financial bailouts is that you are kicking the can further down the road. For Australia it is hundreds of billions of dollars that the Government is providing, and a lot of it is going to poorly run businesses that have failed to risk assess and plan or invest in measures that would potentially see them through times of turmoil. Virgin, sadly, is a classic example of this. Bailouts are nothing but destructive. They reward poor planing. They leave valuable assets with those who are managing them poorly, making us all poorer. Contrary to popular belief, money does not grow on trees.

When this is over the Reaper will come to collect. COVID-19 stimulus packages, money printing, collecting part of your superannuation early, extra welfare payments, wages covered by stimulus money - over $200b to date and people think that will all be forgotten?? The Reaper will ask for it all back, and with interest through a rise in GST, a rise in Government fees and charges, and that chestnut called ‘levies’. This will occur at Federal, State and Local Government levels. They will charge us for the air that we breathe and for defecating by the kilogram. The middle class was already shrinking, now it is effectively gone overnight. Now who is going to pay for the tax cuts for the rich and pay the unemployment benefits for the poor?? The pain has only just begun.....

crosscutter 12th Apr 2020 03:46

Centrelink are going to have to write 10000 cheques a fortnight regardless. The real question is how should they be distributed?

VH DSJ 12th Apr 2020 04:39


Originally Posted by Paragraph377 (Post 10747285)

When this is over the Reaper will come to collect. COVID-19 stimulus packages, money printing, collecting part of your superannuation early, extra welfare payments, wages covered by stimulus money - over $200b to date and people think that will all be forgotten?? The Reaper will ask for it all back, and with interest through a rise in GST, a rise in Government fees and charges, and that chestnut called ‘levies’. This will occur at Federal, State and Local Government levels. They will charge us for the air that we breathe and for defecating by the kilogram. The middle class was already shrinking, now it is effectively gone overnight. Now who is going to pay for the tax cuts for the rich and pay the unemployment benefits for the poor?? The pain has only just begun.....

There's your answer. Print more money! LOL. Why do they even bother to tax us when the government can print more money at will?

TACQANAVIAVEC 12th Apr 2020 05:59


Originally Posted by airdualbleedfault (Post 10747283)
But you'd be happy with your "taxpayer dollars" going to 10000 centrelink cheques a fortnight? Let me take a wild guess here, you're employed somewhere in the QF group?

When you consider both airlines would have to return as smaller versions of themselves then every dollar spend on keeping the loss making carrier alive is not only at the expense of the tax payers but also at those at the bottom of the queue at QF. So you bet any QF employee staring at their jobs been made redundant by unfair use of tax payers money would have very strong feeling about this, nothing personal just being fair.

Icarus2001 12th Apr 2020 08:15


As for monopolies, well if there is a market for 2 players, there would be someone else who steps up, for all the sentiments that no one would step in the shoes of VA if they go under, maybe that just means that after this crisis, there isn't enough market for more than 1 player?
Nature abhors a vacuum. IF and its a big IF QF/Jetstar found themselves in a monopoly position for a short while, say 6-12 months, then the federal government can with a stroke of a legislative pen price cap fares. Shortly after a foreign (or local) company would move into the vacuum left by VA, just like VB did after Ansett died. I admit they already had nine aircraft up and running at that time.

ozbiggles 12th Apr 2020 10:26

It will be interesting to compare peoples posts when we are back here in 6 months talking about bailing Qantas out with Government money.

t_cas 12th Apr 2020 10:35

To be balanced.... both QF and VA have cash reserves aside to weather some financial emergencies. The median for airlines in the Asia Pacific is 1 months cash reserves.

so my opinion.... both Australian groups are placed well on the stage when compared globally.

This event is not something any business can “plan” for. Being regulated out of the market is not something you would expect.

Put the knives away, let this play out as it should.

The groups and as many businesses as possible should be assisted as if the government had not shut the doors on the economy and the market in which they freely competed in prior to this war on Carona.

RodH 12th Apr 2020 22:33

This news item is from the Executive Travellers web site and just posted a short time ago.
Good news for everyone.
In a message to staff on a private Virgin Australia Facebook group posted this evening, and seen by Executive Traveller, CEO Paul Scurrah noted "I am aware that Qantas communicated to their people that they had been 'directed' by the Australian Government to operate a 'minimum domestic network'."

"Upon hearing this I immediately contacted the Deputy Prime Minister, who denied any such deal was in place and that both airlines will be treated equally."

"The good news is that he called me tonight to say we will be offered the opportunity to operate a 'minimum domestic network' subsidised by the Australian Government," Scurrah continued. "We will be in discussions with the Australian Government tomorrow to work through the detail.

The Bullwinkle 12th Apr 2020 23:06


Originally Posted by RodH (Post 10748120)
This news item is from the Executive Travellers web site and just posted a short time ago.
Good news for everyone.
In a message to staff on a private Virgin Australia Facebook group posted this evening, and seen by Executive Traveller, CEO Paul Scurrah noted "I am aware that Qantas communicated to their people that they had been 'directed' by the Australian Government to operate a 'minimum domestic network'."

"Upon hearing this I immediately contacted the Deputy Prime Minister, who denied any such deal was in place and that both airlines will be treated equally."

"The good news is that he called me tonight to say we will be offered the opportunity to operate a 'minimum domestic network' subsidised by the Australian Government," Scurrah continued. "We will be in discussions with the Australian Government tomorrow to work through the detail.


Unfortunately the WA Premier didn’t get the memo it seems......


The Western Australian government may underwrite flights to get people stranded due to COVID-19 back home and residents home.

Premier Mark McGowan is looking at options to fly out about 650 passengers from the Vasco Da Gama cruise ship who have completed their 14-day quarantine period in Perth.

Most are from the eastern states while a few are from overseas.

The passengers finished their quarantine on Friday and have been moved to a Perth hotel, until they can fly home.

Mr McGowan told reporters on Sunday that the state may have to work with Qantas to underwrite flights to get people home, and Western Australians back in the state.

"Getting them home is not easy... Virgin has essentially stopped, Qantas has wound back its flights so much that it's very difficult to get flights home for these people," Ms McGowan said.

"It may mean the state needs to work with Qantas to support flights or underwrite flights to get people from the east home but also to get West Australians back here."

cunnamullafella 12th Apr 2020 23:31

When McCormack was asked on AM Agenda yesterday on Sky if VA would be given funding he was non commital and said all options were being looked at. I don’t work for VA but it definitely wasn’t a NO.

Transition Layer 13th Apr 2020 00:11

The communication about the Govt “directing QF to operate a minimum domestic network” came from the head of Domestic Cabin Crew. Hardly what I would consider an authoritative source and he may indeed have been getting his terminology wrong.

On the other hand, here is what the QF Chief Pilot had to say about the matter as recently as Friday:


TEMPORARY NETWORKS

We continue to work with the Australian Government on temporary International, Domestic and Regional networks. This is about maintaining some level of connectivity where there is little commercial demand.

While there is no update on the Domestic and Regional networks yet, we have had to delay the first International flights due to the government’s decision to remove the quarantine exemption for operating crew.
I know which source I’ll believe. Looks like the head of cabin crew may have been jumping the gun a bit and hopefully gets more than a rap on the knuckles for it.

Progress Wanchai 13th Apr 2020 00:17


Originally Posted by VH DSJ (Post 10747310)
There's your answer. Print more money! LOL. Why do they even bother to tax us when the government can print more money at will?

Because printing money doesn’t fix the problem as money then loses its value. When money loses value it affects those that rely on it the most. ie, savers (generally retirees) and the working class who live pay check to pay check.
Who it benefits is the asset owning class as inflation pushes up the price of assets. In affect printing money transfers wealth but doesn’t create it in the same way tax doesn’t destroy wealth but transfers it.

Imagine what would happen to the price of gold if the government declared house bricks painted yellow had the same value as gold bullion. It’d be to the benefit of those with lots of bricks and yellow paint and to the detriment of those who have gold stashed under their mattress, but it will be of no benefit to the country as a whole. This is no different to printing money.

The government has two methods to pay its bills.
Tax, which affects the rich disproportionately to the poor.
Print money. Which affects the poor disproportionately to the rich.

RodH 13th Apr 2020 01:00

This is another pice of news from the ABC news website.
Looks like it’s credible information and that it does look good.


Federal Government is in talks with the major airlines about subsidising domestic flights in a bid to keep Qantas and Virgin Australia in the air.

Key points:

  • The Deputy Prime Minister spoke with the bosses of the major airlines at the weekend
  • Michael McCormack says there are ongoing talks about subsidising domestic flights
  • It comes as the Government urges Australians to stay home until restrictions lift


Deputy Prime Minister Michael McCormack told the ABC he spent the weekend speaking with the bosses of both airlines, in the wake of Virgin Australia's decision to suspend all domestic flights except a daily return service between Sydney and Melbourne.

He said it was vital that flights around Australia continued to ensure people returning from overseas could get home after serving their mandatory 14 days of quarantine.

"We also need, of course, to transfer people around from capital city to capital city. So we'll be looking at that," Mr McCormack said.

"We'll be looking at what we can do in conjunction with the airlines, who are cooperative."

Rudder Sir 13th Apr 2020 01:01


Originally Posted by Progress Wanchai (Post 10748173)
Because printing money doesn’t fix the problem as money then loses its value. When money loses value it affects those that rely on it the most. ie, savers (generally retirees) and the working class who live pay check to pay check.
Who it benefits is the asset owning class as inflation pushes up the price of assets. In affect printing money transfers wealth but doesn’t create it in the same way tax doesn’t destroy wealth but transfers it.

Imagine what would happen to the price of gold if the government decided it’d paint house bricks yellow and declare they now had the same value as gold bullion. This is no different to printing money.

The government has two methods to pay its bills.
Tax, which affects the rich disproportionately to the poor.
Print money. Which affects the poor disproportionately to the rich.

I think you may have missed the sarcasm. Of course printing money is not a long term fix, no one would argue it is.

Progress Wanchai 13th Apr 2020 01:04


Originally Posted by Rudder Sir (Post 10748193)
I think you may have missed the sarcasm. Of course printing money is not a long term fix, no one would argue it is.

Haha.
Cheers.

Unfortunately the RBA/Government have made noises about QE and think they can get out of this hole by digging.

normanton 13th Apr 2020 01:18

It's great Virgin are going after some of the government subsidised flying. But be careful what you wish for Virgin, you are playing right into Allan's hand.

If Qantas get x, we want x as well. Just remember Mr. Scurrah, you are asking for xx from the government for a bailout. Don't expect Qantas not to get xx too.

That alone is even more ammunition for the government to reject your bailout request.

RodH 13th Apr 2020 01:49

Firstly VA are not asking for a bailout, they are asking for a loan.
Secondly it would appear that BOTH VA and QF are going to be subsidised to allow some operations to commence again.
Given the above how can you say it’s playing into Alan’s hands when they are getting equal treatment at this stage?
I think it’s great to see the Government helping out such a vital Industry which is suffering at this time because of no fault of its own making.
Sure VA was not doing as well as QF for quite a while but it was improving fairly quickly and it’s correct that they do not have a big a reserve as QF or what is needed to see them through this horrible time but that is not any reason to abandon them.
Theres a hell of a lot of people who depend on VA continuing operations quite apart from its employees so there’s one hell of a lot more at stake than meets the eye.
We should all be pleased to see a helping hand being offered and not put them down all the time.
For the record I am not and never have been employed in any way by either VA or QF , I’m just a happy passenger who really enjoys flying.

TBM-Legend 13th Apr 2020 02:06


Originally Posted by RodH (Post 10748220)
Firstly VA are not asking for a bailout, they are asking for a loan.
Secondly it would appear that BOTH VA and QF are going to be subsidised to allow some operations to commence again.
Given the above how can you say it’s playing into Alan’s hands when they are getting equal treatment at this stage?
I think it’s great to see the Government helping out such a vital Industry which is suffering at this time because of no fault of its own making.
Sure VA was not doing as well as QF for quite a while but it was improving fairly quickly and it’s correct that they do not have a big a reserve as QF or what is needed to see them through this horrible time but that is not any reason to abandon them.
Theres a hell of a lot of people who depend on VA continuing operations quite apart from its employees so there’s one hell of a lot more at stake than meets the eye.
We should all be pleased to see a helping hand being offered and not put them down all the time.
For the record I am not and never have been employed in any way by either VA or QF , I’m just a happy passenger who really enjoys flying.



When you go for a loan, the first question the lenders ask is about your credit history followed by a look at your accounts including assets and liabilities. No lender will give you a loan if you don't pass the credit check. VA has few, if any, assets that they can pledge to support a loan. Income is another meaningful item to clearly see how you can repay a loan over and above your existing commitments and so it goes on. A "Phoenix solution" after administration with fresh capital could be a solution. The Government is not the source of that capital otherwise every struggling business in Australia would be eligible!


ECAMACTIONSCOMPLETE 13th Apr 2020 02:13

If I go to the bank and ask for a $1 million dollar loan on my $500,000 house, I’ll be laughed out the door.

Thats essentially whst virgin are asking for ($1.4 billion loan with $700 million market value).

Des Dimona 13th Apr 2020 02:27


If I go to the bank and ask for a $1 million dollar loan on my $500,000 house, I’ll be laughed out the door.
Thats essentially what virgin are asking for ($1.4 billion loan with $700 million market value).
Also, just the "small" issue of debt servicing with little or no income - doesn't add up.

crosscutter 13th Apr 2020 02:28

Virgin have a market value around $700M. A request for double their market value might be framed a loan, but I’m afraid that’s where reality ends.

What is very real is industry job losses. It’s devastating and no one wants our colleagues and friends to suffer. So how should job losses be ‘allocated’ amongst the pilots? Should QAN and VAH share the load. Is that fair? I hope the government helps further to minimise the damage. Just don’t expect junior QF pilots to be jumping up and down with excitement as they lose their job for the good of duopolistic idealism. It’s not unreasonable self interest. It’s just a matter of either it’s you or me.

Finally, the situation isn’t playing into anyone’s hands. Not Alan’s or Paul’s or Tom, Dick or Harry’s. Everyone is playing the hand the situation has dealt. Survival hasn’t been secured by anyone. I do smile when some capitalistic heroes who have made their wealth crushing the competition, advise government a philanthropic holistic approach should be followed in our industry.

RodH 13th Apr 2020 02:30

Whether a loan is justified or not is not can be debated at a later date as the Airlines look like being subsidised for a limited operation at this time.
That may well be expanded but at least things look like starting up again before too much longer.
Great for passengers trying to get home from interstate and great for staff and businesses connected with the Airlines .
Indeed a small step but it’s a start.

Toruk Macto 13th Apr 2020 02:31

Quote:
If I go to the bank and ask for a $1 million dollar loan on my $500,000 house, I’ll be laughed out the door.
Thats essentially what virgin are asking for ($1.4 billion loan with $700 million market value).



Would you not first look at the $500 k house , see it’s location , see if it’s run down ? Could it be renovated into something that one day might be worth $5m ? Be a good loan to give if you look past the current state ?

The Bullwinkle 13th Apr 2020 02:49


Originally Posted by ECAMACTIONSCOMPLETE (Post 10748230)
If I go to the bank and ask for a $1 million dollar loan on my $500,000 house, I’ll be laughed out the door.

Thats essentially whst virgin are asking for ($1.4 billion loan with $700 million market value).

Either you've got a bad credit rating or you need to change banks!!!

ECAMACTIONSCOMPLETE 13th Apr 2020 02:51


Originally Posted by Toruk Macto (Post 10748241)

Would you not first look at the $500 k house , see it’s location , see if it’s run down ? Could it be renovated into something that one day might be worth $5m ? Be a good loan to give if you look past the current state ?

Well that’s the question the credit market seems to have answered.

Even Norwegian and Caribbean cruise lines have been able to obtain loans, whereas it seems virgins final roll of the dice is with the government, which also appears set to reject them.



All times are GMT. The time now is 17:44.


Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.