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-   -   Government Loan to Virgin Australia (https://www.pprune.org/australia-new-zealand-pacific/631164-government-loan-virgin-australia.html)

DanV2 15th Apr 2020 06:14


Originally Posted by 34R (Post 10750406)
You’re kidding right?

If VA come out the other side of this they will more than likely resemble the Virgin Blue of the old days rather than the modest fleet you speak of.
Everyone agrees recovery will be slow... and you’ve got them flying around 70 737’s???

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.

Led Zeppelin 15th Apr 2020 06:15

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.

markontop 15th Apr 2020 06:15

Virgin Blue
Great! More juvenile PAs and dress ups.

Led Zeppelin 15th Apr 2020 06:18

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

Information Charles 15th Apr 2020 06:25


Originally Posted by markontop (Post 10750412)
Virgin Blue
Great! More juvenile PAs and dress ups.

At least it turned a profit every so often.

Good luck everyone. Horrific times.

Paragraph377 15th Apr 2020 06:34

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!

DanV2 15th Apr 2020 06:40


Originally Posted by markontop (Post 10750412)
Virgin Blue
Great! More juvenile PAs and dress ups.

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.

34R 15th Apr 2020 06:41

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

markontop 15th Apr 2020 06:51

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.

topend3 15th Apr 2020 07:04

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???

Weapons Grade 15th Apr 2020 07:11

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).

Icarus2001 15th Apr 2020 07:29


SIA kicking in some money and the management expertise.
Now that is a funny sentence.

mattyj 15th Apr 2020 07:46


Originally Posted by Going Boeing (Post 10750173)
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.


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?!
​​​​​​​

DanV2 15th Apr 2020 07:56


Originally Posted by topend3 (Post 10750453)
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???

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.

krismiler 15th Apr 2020 08:04

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.

topend3 15th Apr 2020 08:15


Originally Posted by DanV2 (Post 10750496)
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.

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

DanV2 15th Apr 2020 08:20


Originally Posted by krismiler (Post 10750510)
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.

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).

krismiler 15th Apr 2020 09:05

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

Icarus2001 15th Apr 2020 09:18


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.
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.

once the grounding is lifted and limited services are allowed to resume it's crunch time
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.

DanV2 15th Apr 2020 09:31

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".


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