Looks like we are in for a long wait before we hear anything.
When we eventually hear let’s hope there’s some good news for VA , it’s employees and the travelling public.
“ Stay around Virgin, we need you “

If the Government does not come to the party, what is next? Probably 800m left.

Can they position toward a Domestic only operation with 40-50 737s? With the cash that they still have.

Hopefully something comes good of it.

Whats happening today for the employees @ VA?

Well if they possibly have a job or not?

Government Support = Continued Operations
No Support = File for Administration

VA basically just told their shareholders, you can either cough up or we'll either take the debt restructure option and/or send the joint into "voluntary administration".

Either way, whatever the path VA takes, the shareholders will have the stakes diluted either way. SQ, EY, HNA et al will get "sacked" from their roles as shareholders if VA files voluntary administration.

https://www.news.com.au/travel/trave...adf77c1a5f7d92

DITO.....all the best guys/gals -:)

Is that what actually happened?

Can't see Administration helping them, just like '01, the industry is in turmoil & it's no time to invest in airlines.

If Virgin does go into administration it gets instant protection from creditors and if there is $800 million or so in the bank that should allow for a period of operation whilst the future is worked out. The administrators won't allow it to run at a loss so basically it will just be the peak hour flights between main centres with the dear tickets that continue. Every employee's job gets looked at and those deemed unnecessary are laid off. Costs are ruthlessly cut as the administrators are on the hook for every debt incurred by the company once they take over, if there isn't enough in the kitty it will be down to them to pay the bill themselves.

The administrators run the show and the creditors will make the final decision. I previously worked for a company which went into administration and can still remember walking into the GM's office and finding him sitting at a small table in the corner whilst the new appointee made himself comfortable behind the main desk.

During this period a creditors committee is formed and they get to decide what happens. Basically the two options on offer are:

1. Wind things up, sell off the assets and get back a percentage of what's owed.

2. Restructure the company so it's profitable which generally involves cutting out loss making areas and reducing staff numbers. Also debts are examined and proposals made which involve writing off a percentage of what's owed and/or more favourable terms for the balance, eg write off 20% of the debt, defer payments for a year and extend the repayment period with a lower interest rate. This is a very good time for a potential purchaser to come in as all the difficult work has been done and they are seen as a saviour, backs are up against the wall and substantial losses or redundancies are the next step. Negotiations are very one sided to say the least as they only need to pay the creditors a bit more than they would receive in a fire sale, and can take on the employees they want on the terms they want.

The purchaser gets to take over a company which is restructured into going concern on their terms, rather than moving in early, being liable for debts and having to negotiate with the unions.

Krismiler. You forgot to mention that the administrator pays themselves first. Handsomely.

halas

It’s hard to see where this is going.

The Treasurer just now spoke that they (airlines) need to speak to specific shareholders about its financial needs.

But then these comments that popped up today around the debt/equity, reeks of a deal being done in some form.

Etihad won’t chip in a cent. I mean they will just dispose of the stake, won’t mean much to them, past management errors.

PS is a finance man inside out. If the numbers don’t align he won’t drag it on. He will make the closedown call fairly quickly.

It seems it’s up to Singapore. The silence in their involvement in the last few years is the problem.

Would have been a nice project for someone over Easter , talking to the Emirates , Beijing and Singaporeans , asking for more money or walk away from their investment.

Couldnt agree more,its so sad for all that turn up & give their all every day to keep this airline going.
Shame on the majority shareholders who now are in hiding & basically hiding from their responsibilities after stripping every $ out of the company & now crying poor.

KordaMentha did pretty well out of Ansett and certainly strung the process out long enough. Administrators fees make lawyers jealous, and even secretarial staff are charged out at hourly rates approaching a Captain's overtime pay. With $700-800 million in the bank and the creditors behind a wall, the administrators would have a fair bit of working capital to play with and not have to worry about loans or asset sales to keep things going. Potential investors might be waiting for a restructure in their favour before committing any money.

Virgin Australia considers going into administration as Labor calls for government rescue

The grounded airline is in a trading halt after hiring insolvency and turnaround experts amid the coronavirus crisis



Source: https://www.theguardian.com/business...ernment-rescue

The only person that ‘stripped’ anything out of this airline is John Borghetti. His major skillset was facillitating the transfer of large sums of money from gullible investors into his pockets.

Hogan (EY) and SQ are just as responsible for being "yes" men to JB's CapEx spending, even rolling in the money themselves willingly for little return.

The then-management of EY and SQ are now gone (IIRC Hogan jumped before he got pushed from the EY job), and the current management of both entities could not care less about VA thse days as they shore up their own balance sheets.

EY and SQ both have a dismal record at overseas investments, so why people still consider SIA as a "so-called saviour" for airlines despite SQ's mediocre record overall is beyond me.

Of the atrocious $5b debt that VA carries - $3b is secured to aircraft and $2b is secured to bonds. VA's current market cap. is ~$700m. A pittance. They're currently in talks with their 'shareholders'. They better get some cashola out of this - otherwise, they're toast. Simple as that.

Has the board reduced their pay further for the foreseeable future?

Last I hear was a 15% reduction but given what is transpiring, wouldn’t a larger sacrifice be forthcoming?

What a "Game Changer" !!! Mostly losses during that "reign" !! :(

They are inept creatures. The entire Board needs to be given a short walk. Get rid of them. They’ve fu#ked the place and their jobs should now be seen as redundant. Good riddance. Scurrah will be lucky to survive. He has had 12 months since IL Douche left VA to produce some magic. He didn’t do enough quick enough. That said, is it worth keeping him around? Who knows. Regardless, at the end of the day the CEO is the accountable executive. He knew he was inheriting a lemon and unfortunately for him it’s hit rock bottom due to mostly circumstances beyond his control. That said, he is the Captain and a good Captain always goes down with the ship. A lot of good people have and are being hurt by years of mismanagement. That’s a very sad thing.

It's beyond sad that it has come to this. How can you f*** things up so badly to not make money in a market that has one other competitor. Like seriously. I feel for the employees of Virgin. I really do.

I’m so annoyed my friends in VA are caught up in this. I really am. Rips me up.
I’m so annoyed that the (foreign) investors of VA and the board have got it to this point. And aren’t backing it up.
But why is PS pleading to the government to bail them out for $1.4 billion when they owe almost $5 billion in debt? I’m sorry... what an effing mess. It may not be his fault as such, but I’m sorry, my tax paying dollars don’t deserve to go to a foreign owned outfit that can’t get their stuff in order. I challenge anyone to explain to me why MY and everyone else’s taxes should bail an individual company out? And forget the two airlines needed to keep the air fair, whilst they’ve been here 20 years and are in this situation! But you haven’t paid much in the way of Aussie tax I’m afraid, and were quick to take advantage of the Ansett collapse many years ago.

Shut the doors. And another door will open. History has shown this with VA after Ansett. Hopefully an outfit can emerge that’s strategic enough, and not stupid like VA has been, and be a proper 2nd airline in Australia? Alliance has been a quiet achiever for 20 years and maybe they are the ones to step up for Australia.

It’s time to euthanize Qantas as well as Virgin. We need open skies.

I guess the government won’t help because they saw Il Deuce as an aviation luminary.
Why else would they have awarded him an AOM for services to aviation?

And the prize for The Most Insensitive Drivel goes too.............

The one who fumbles around in the dark at great depth at the bottom of the ocean.......

I’d be interested in your hypothetical of how that would help. Is that a bit like getting rid of Ford and Holden? All domestic foreign owned? Good for Australia?

MEL-SYD: choose between Air Asia and Scoot. Both mobs paid $2/hr, but cheap flights. Sunny reckon’s it’s good for Australia.

Sunny reckon’s it’s good for Australia.[/QUOTE]
[QUOTE]


Oh if Sunny, with more posts than a dingo fence says it, it must be true. An expert on all subjects.

He the Oracle has spoken!

It may come as a surprise to some, but the Australian people do not just exist to be fleeced of exorbitant amounts of money to keep Qantas and its staff and shareholders in the style to which they have become accustomed.

If Virgin goes under than a rampant Qantas will screw the Australian captive customers for all they are worth......again! I can see that this is TBM's wet dream. A Qantas monopoly again, but this time not just International, domestic as well! Lets see; $1000 - Melbourne Sydney, $2000 - Melbourne Brisbane, $5000 to Perth!

Competitively priced air travel is essential to Australias economy, it is axiomatic that Qantas won't provide it without competition. If there is no competition then we need to open the skies.

Love it :p

Two very quick points - your tax payer dollars have already gone to a foreign owned outfit - in REX, who got the majority of the $200m regional subsidy announced a few weeks ago. And who have now put their hand out for more....but there doesn’t seem to be much commentary here about the nasty foreign owned REX airline taking government handouts. I’m not sure if Air North received any of that money either, but there is another foreign owned airline. And I think as of last year....QF was close to 40% foreign owned.

And whilst VA have not paid any Company tax - I can assure you they still contribute indirectly to the tax system. The NB pilots would pay at least $60m in income tax every year alone. Not to mention GST, fuel excise taxes, etc etc.

I hope you’re as passionate about some of these issues in 6 months time when QF (remember the 40% foreign owned airline) puts their hand out for money (from your tax payer dollars, which they haven’t contributed to much recently either care of that handy $2b write down of assets a few years ago....)

For those of you playing along at home, it seems that all airlines are part owned by overseas companies.

QANTAS is very much partly overseas owned. A little research goes along way

The major issue with Virgin’s operations (IMHO) is that they have too many fleets in small numbers. When you have only 4-5 aircraft in a fleet, your investment in spares, maintenance, training costs, etc is far greater than when you have a fleet of 15-20 aircraft. The only way that I can see Virgin trading out of this is to reduce their operations to a single large fleet of B737’s with all the B777’s, A330’s, A320’s, ATR’s etc disposed of - with significant losses due to the depressed market. This will cause significant pain for many staff but, it s necessary to save the airline. All the best to Virgin staff.

Probably those owners will reach into their own pockets in a NORMAL capital raising without creating a game of brinkmanship between various GOVERNMENTS and bondholders.

VAH has tremendous local support. It has good people. All the best.

Absolutely agree, fleet consolidation, probably 737; trunk routes only.
If financing can be found there is hope.
Hang in there peeps, we're all in this together.
Craven

There should be some news today, or at opening tomorrow at the latest.

The announcement states "Virgin Australia wishes the trading halt to remain in place until the earlier of the release of an announcement by the Company or two trading days."

This is a standard release - a trading halt cannot be longer than 2 trading days.

From The Australian “Scott Morrison Refuses to Budge on Bailout for Virgin”

The federal government has no *intention of being Virgin’s “white knight”, dismissing growing calls for it to intervene to save the airline or even take a temporary *equity stake to prevent its collapse.

Senior government sources fear ongoing speculation about the commonwealth bailing out the foreign-owned Virgin is counter-productive, crowding out any *potential market-led solution.

While the Morrison government is concerned about the *future of Virgin, and job losses in aviation, sources insist the JobKeeper package is designed to help businesses ravaged by COVID-19 and a Virgin-specific bailout, including taking an equity stake, won’t happen.

Scott Morrison told Sky News on Tuesday: “Our plan has always been about preserving businesses as the centre of the economy, not the government at the centre of our economy. Businesses are at the centre of our economy and we want to *ensure they get through this intact … so they can lead the recovery … on the other side.”

Sources told The Australian that, despite speculation and support from Labor, this would not include any special rescue package for Virgin. The government *believes a bailout for Virgin would open the floodgates for other struggling businesses.

Deputy Prime Minister *Michael McCormack has been trying to secure an agreement from the airlines to operate a *minimum number of flights *between major centres to maintain freight connections and carry Australians to their home town or city after *enforced quarantine.
READ MORE:Virgin in trading halt amid rescue hopes|It takes two to keep the air fair|Canberra in Virgin debt dogfight|Virgin races to restructure debtBut a planned announcement on Tuesday was progressively pushed back as Virgin Australia sought assurances it would not be left out of pocket as a result of the flights. It is understood the airline has been unhappy with relief measures announced by the government to date.

Despite Mr McCormack’s promise that $159m of a $715m fee relief package would be paid to Qantas and Virgin, neither airline has yet to receive any money.

With flying reduced to almost nothing, Virgin estimated the total cost benefit of the package from February 1 to September 30 would amount to less than $70m.

For the second time this month, Virgin shares were placed in a trading halt on Tuesday pending an announcement about financial assistance and debt restructuring by Thursday.

Virgin chief executive Paul Scurrah is working on a restructuring plan with investment bank Houlihan Lokey and, with the backing of Labor, he *believes the airline is crucial to Australia’s economic recovery and the government should take an *equity stake to secure its future.

But the Prime Minister and Josh Frydenberg insisted any further support for the aviation sector would be spread across the industry. “We haven’t been picking any winners or picking any favourites here,” Mr Morrison told the Nine Network. “What we’ve been doing is ensuring we’re giving sector-wide support. So we’ll continue to deal with the sector on a sector-wide basis.”

The Treasurer also ruled out a Virgin-specific rescue package and suggested talk of the airline’s collapse was “speculating about the future”.

“Nobody knows where those issues will end up,” Mr Frydenberg said. “Australia’s been well served by having two major airlines operating in the domestic market. But Virgin and Qantas are both publicly listed companies, both with substantial shareholders.”