Also to add Virgin only owns half of their 737 fleet (under 40 aircraft).

There's no way a new LCC formed under "VA Mk II" will be more than 38 aircraft (at most), as basically almost all (if not all) leased aircraft at VA will start to get repossessed by lessors the moment VA enters administration.

Try 20 -30 aircraft maximum on trunk routes initially with additional non capital city ports in the intermediate future as things get back to normal.

If VA stays, it will be a very, very different company.

Virgin Blue
Great! More juvenile PAs and dress ups.

I think second time around, the adults will be running the company.

At least it turned a profit every so often.

Good luck everyone. Horrific times.

Compass Mk3
 

I’m surprised nobody has mentioned a ‘Compass Mk3’? Bryan Grey and his mentor Reg Ansett might be long gone, but I was sure that somebody would still make the suggestion!

That form of Virgin turned profits for most years that airline was in operation. Their successor has never turned a 'decent' (if any) profit since the JB led rebrand.

To be clear, my reference to Virgin Blue was a small to medium fleet size, not face painting and chocolate muffins

Virgin Blue made a profit when they were the only other option to QF.
Also by way of comparison they were expanding into a vacuum and the economy was strong.
I would suggest it is easier to expand as your resources are working at 110%, much more efficient.
Today should they be successful is kind of like fighting a retreat, hard to contract into profitability with excess resources and established work practices.

Those were the days! A300s and A310s (Compass :) ) Oh and btw what if COVID HADNT have come along, were VA going to be morphing into their previous self (low cost, single aisle only etc) or just running to the end and dying? Maybe cOVID might be their saviour???

Alas, poor Virgin - I knew it well
 

Methinks this is a tragedy of Shakespearian proportions viz., Hamlet Act 5, scene 1: the gravedigger scene.
(modern translation):
"Let me see. (he takes the skull) Oh, poor Yorick! I used to know him, Horatio—a very funny guy, and with an excellent imagination. He carried me on his back a thousand times, and now—how terrible—this is him. It makes my stomach turn. I don’t know how many times I kissed the lips that used to be right here. Where are your jokes now? Your pranks? Your songs?
Your flashes of wit that used to set the whole table laughing? You don’t make anybody smile now. Are you sad about that? You need to go to my lady’s room and tell her that no matter how much makeup she slathers on, she’ll end up just like you some day. That’ll make her laugh. Horatio, tell me something."

Perhaps it is time to bury the corpse (or prepare for it to become morte).

Now that is a funny sentence.

they could paint all the 73s red too..get the tech crew dressed down in a more casual outback style uniform (no ties). Have the cabin crew tell jokes on the PA..lighten it up a bit..how can you fail?!
​​​​​​​

Scurrah was already on the way to reshaping VA domestic closer to it's birth roots by withdrawing out of unprofitable Short Haul International and Domestic Regional Routes, drawing down Tiger (before COVID-19 sped up its demise) plus slowly unbundling VA Economy (and to some extent cutting down Domestic Business) on all routes except Perth.

International was being basically reduced to mainly East Coast-LAX (the only destination out of the VA international network that was earning money for a largely loss making international division overall) with a single HND, and a medium term plan to reduce and simply the wide-body fleet to 1 type (replacing the 77Ws and A330s),

Since COVID-19, all those initial plans had since been thrown out the window.

SIA make large and consistent profits in Singapore. Where they seem to fall down is investing in foreign ventures run by others. Possibly they might decide to be more hands on and send in their own people for the key roles next time.

Future fleet size is dependent on the game plan, 30 - 40 aircraft gives them another Virgin Blue whereas 60 - 70 gives them a serious sized airline if they want to replicate Virgin without the loss making areas. When WOW Air went broke last year its aircraft were soon snapped up by other airlines, now with most of the worlds airliners parked up, leasing companies will be very receptive to anyone wanting their aircraft, and not in such a great hurry to fly them all the way back from Australia into storage.

True, perhaps PS came along a year ot two too late.

SIA had a proper attempt at the Australian market through their 100% control of Tiger Airways Australia (via Tiger Airways Holdings). SIA still couldn't get that right, despite running that operation out of the shed terminal in Melbourne.

Despite full control, SIA still couldn't get that right with the maintenance debacles (to add to the infamous 'Bogan handling' through their own TV show that was shown in Australia for a while). All of that led to "selling" the remaining 50% to VA for $1.

SIA were more hands on in their Vistara investment with their 49% stake before COVID-19, and even had SIA buying planes for Vistara. This suggests the Australian domestic market is not on SIA's priorities.

If anything, if SIA were interested in any of VA's assets (if at all), it would be 'Velocity', which was one of the primary reasons why they bought a stake in VA in the first place. Buying Velocity would allow SIA to integrate the Velocity customer base into Krisflyer.
This would allow the "VA mk II" (post-administration successor) to start afresh with their own FF program if they wish to do so (or go without one if they're going the ULCC route).

The board of Virgin have a breathing space whilst everyone is grounded, once the grounding is lifted and limited services are allowed to resume it's crunch time. ASIC have a guide for directors which gives the penalties for trading whilst insolvent and also lists warning signs of insolvency.

https://asic.gov.au/regulatory-resou...for-directors/

Calling in the administrators is an admission of defeat, and certainly doesn't look good on a CV but it beats fines of up to $200 000 and the company creditors coming after you personally for their money. I think we'll see Virgin in administration soon and a limited network with a greatly reduced fleet size back in the air in the interim whilst this gets sorted out.

The outcome is still far from certain whilst the players make their moves. New story from the AFR linked below.

https://www.afr.com/companies/transp...0200415-p54jy9

The reality is they only succeed as a monopoly airline owned by a government that goes in to bat for them on rights etc. Outside of their nursery they could not organise a shag in a house of ill repute.
There is NO grounding.

They could be running a limited network now. Just read that there are 1500 cruise pax stuck in WA due no flights. Money for jam.

Exactly. Just because certain airlines can make money in their own backyard (even if assisted by state-owned carriers such as Singapore and Emirates) doesn't necessarily translate into success overseas.

Singapore's (SIA) record overseas (not just in Australia) has been dismal overall, largely a trail of destruction and not much better than Etihad's string of bankruptcy failures.

The only exception to SIA's string of overseas failures is that the jury is still out on SIA's Vistara investment.

Many people say that VA should stick to their "bread and butter" domestic flying, and pull out of International/Tiger/Everything else.

The same view can be applied to SIA, they should stick to running their "own" airline group in their state and pull out of investing overseas because of their overall dismal record. SIA running their own airline group in their own backyard where they make consistent profits is their "Bread and Butter".

kris-

Probably should NOT Do this, but- think Revenue Derived/or Delivered/able and/or Potential/ along with Hull-Values at 'this' time (ref: 9/11 as an example...) underpinning the Balance Sheet- Right NOW, with Nil 'Meaningful Revenue Contribution' let alone 'what' an airframe maybe/maybe NOT 'worth' right Now.

'The' BURN does not stop, by grounding the Show.....

- and Yes they sure DO, 'reckon' like times gone by 'that' shall be where the rubber meets the road.... with 'the' said Directors.

All the BEST to you 'all' and truly Do mean THAT- the media on shareholders concern/front-up..... 'in' my 'view' is telling!!!!

Rgds and Best Wishes TO 'All' at this time.
Stay Safe and Well.
S28- BE
(may 'pull' this sucker..... FYI)

Quote ex (kris's) AFR link:

Quote:

---

Shareholders walk away

---

If you were the boss, wanting to save every cent possible, what would you do? Throw a few flights at them or wait for the government to offer some financial incentive to repatriate them?

After having a few close calls, they're starting to earn the nickname 'The Tenacious V'

VA buying back 35% of Velocity last October for about $700M using borrowed money has come back to haunt them. In conjunction with this loan 750 employees were retrenched to pay the interest on the loan each year.

Wouldn’t the buck stop with the guy who sold it? I mean the QF FF program is a licence to print money.

I would agree that is going to look in hindsight a very poor decision. I wondered at the time how such programs can be valued at what they are given it is just a parasite on an airline and has no real independent value of it's own apart from an airline. How can it be valued at 2 Billion dollars one year and 6 months later be worth zero? How is that value accurate of a business that doesn't actually generate anything independently? I am sure it is all 100% correct from an accounting point of view but it just seemed at the time a case of the Emperor has no clothes.

Then of course there is the $9 000 000 bonus to the Velocity CEO for essentially turning up each morning. That alone is going to look pretty stark if the whole thing sinks in a couple of months.

Hindsight bumghetti would have stayed at QF or gone to ruin some other company.

Valid points all over here. Maybe another way to look at is not how they got to where they are but what it will look like when and if they go under when it seems 1.4 Billion might be enough to get to the other side. Keeping in mind, Qantas will have their hand out too shortly.
if Virgin cease to exist we lose a large force multiplier for the economy when the wheels start to turn. Half empty terminals, in excess of 10,000 people who used to be highly taxed now on the dole, Swissport and Aerocare gone, half the income for ASA gone and a monopoly player who can set fees at what ever level they choose for pax and freight for the foreseeable future. It will be a foreign entity if a 2nd player comes in and it won’t be for a long time...one of the few sure things we can predict I think and why would they bother anyway to come up against a Government backed monopoly mostly l Australian owned entity. This is why I bought Qantas shares at 2.10 because even though I don’t want to see it, I’ve put my money on it.

I’d like to see the current shareholders take a hair cut, the board get removed for years of poor oversight and an Australian entity step in with a near clean sheet but I haven’t seen many Unicorns recently.

https://cimg1.ibsrv.net/gimg/pprune....47992f13b.jpeg
QF received a government loan back in 1993
https://cimg4.ibsrv.net/gimg/pprune....f970bf1ff.jpeg
They are 35.78% foreign owned and three times the size of Virgin Australia

If this does end up as a monopoly, the government needs to re-regulate to prevent QF from financially raping the consumer, until a genuine competitor enters the market.

So when Bumghetti was Father Christmas, signing off EA’s for more $$, was anyone here knocking him back?

Or Brett Godfrey before him, who pretty much gave the Engineers everything they asked for and then went for the door?

I seem to remember only a few short years ago hearing about the incredible success of ‘Il Duce’.

Maybe some of the unions could take some responsibility here...... I wonder how the AFAP feel after their fight with TT only a short time ago..... I wonder how ridiculous they feel now? Or not......

Just saying

Now we know why Tiger was let go. VA were paying approx. $2M per year for the use of the Tiger name. Unconfirmed report is that VA are paying Richard Branson north of $60M per year for the Virgin name.

If QF does end up a monopoly I wouldn't imagine it will be one for long; I've been confused to be honest where the idea comes from that VA leaving the scene will mean Qantas is unchallenged forever, after all, VA is only here after Ansett fell by the wayside.

Sure, it might take a while, but it would be nice to see Alliance or another Australian owned operator take the mantle if required.

That’s a pretty insensitive comment to make at this point in time. None of the TT pilots have been paid for the redundancy yet! So it’s not just VA pilots that are in this mess!

Sure, it might take a while, but it would be nice to see Alliance or another Australian owned operator take the mantle if required.

Australia won’t have awhile once the green is given to get back to work . Governments will be stimulating their economies , mines will be ramped up and lots of pent up holiday makers probably looking at flying domestically .
The government won’t be happy to wait awhile for a new RPT company to find its feet , purchase aircraft and train crew . Should VA fail , probably ? Would the economy be $1.4B better off if virgin where around next year ? More than likely .

Wasn’t QF owned by the government at this time anyway? Hardly any similarities between it and what VA want now if that’s the case

Good to see we finally agree on something morno :D ;)

Showing your age Junior......

No doubt, very happy to be told I'm wrong and shown why. I don't run airlines, never even worked for one.

The domestic travel industry generates no more income for the economy than the gambling industry or the sex industry. It simply transfers money from one region to another with no net gain. In fact because of fuel, aircraft leases, insurance, internationally owned hotel chains, car hire companies, etc there’s a net loss for the nation.
International tourism is different. But it’s debatable whether we’re a net importer or exporter of international tourist dollars.

This goes to the very heart of what’s happening in Australia. 30 years of uninterrupted debt generated growth has rewired us. We’ve reset to relatively high income service careers and virtually abandoned manufacturing and producing occupations that actually generate wealth for the nation. Apart from primary industries and mining our major net importer of income is the education sector, along with the immigration sector. The last two will be in hiatus for quite awhile along with the cheap credit that has fueled our misconception that we’ve generated wealth.

We’ll all get through the other side of this in good shape regardless of what happens to our respective airlines, it’ll just be a different shape. We’ll all have less disposable income which will swing the pendulum away from service industries back to production and manufacturing. It’s probably a reset that was overdue and would have happened anyway.

Gives me an idea for an airline... Leather-bound crew with stilettos and on board poker machines!

Talk about force multiplier! :hmm: