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

krismiler 17th Apr 2020 02:15

https://www.abc.net.au/news/2020-04-...ation/12157010



Virgin Australia boss meets unions, experts in last-ditch bid amid coronavirus crisis

By business reporter Nassim KhademPosted 10 minutes ago
https://www.abc.net.au/news/image/12...x2-700x467.jpg
PHOTO: Virgin Australia is desperately seeking financial help to keep the company afloat. (AAP: Mal

Virgin Australia chief executive Paul Scurrah has called for "rivalry" to be put aside and for the Federal Government and the community to step in and back Virgin in the national interest.On Friday morning, with private equity funds circling as part of a possible takeover of Virgin, there were last-ditch pleas from a roundtable with unions, academics, super industry representatives and politicians including former treasurer Wayne Swan, for the Government to help save the struggling airline.

All participants urged the Government to step in and take an equity stake in the company, which is struggling to refinance a $5 billion debt pile, rather than leave it to the private market to deal with.

If Virgin cannot get shareholder or Government support, the company could soon enter into voluntary administration.


Mr Scurrah, who has repeatedly asked the Government to help the company with a $1.4 billion loan, said he was limited in what he could say while the company was in a trading suspension, but called for all players to "come together and link arms" in order to save the company from collapse.

"This is a national crisis, it's a global crisis, it's a crisis that this industry has never seen before," he told roundtable participants, including journalists, in a Zoom meeting.

"Rivalry should be put aside and the national interest should be put first.

"We should make sure that the industry gets through this together," he said, noting that aside from Virgin's own 10,000 workers, thousands of Australian workers in supply chains also relied on the company's survival.

"Let's come together and link arms … so we can actually do the right thing by the country."

Virgin's chief operating officer Stuart Aggs spoke directly after Mr Scurrah, reiterating how crucial it was for the Government to throw the company a lifeline as it was now fighting to survive on a "day-to-day basis".

"We're clearly in crisis mode. We're an airline under significant scrutiny on an almost hourly basis," he said.

"Competition is important in the industry."

Shame to lose what Virgin has built: chief operating officer

Mr Aggs, who has worked in the airline industry for 20 years most of which has been at Virgin, said because of the trading suspension, the company's management was limited in the amount of information it could provide its concerned staff.

He said they were getting several emails from team members every day, but could only provide "vague answers", which was a "first for them and us".

He said when Ansett collapsed it took Virgin Blue (now Virgin Australia) more than 20 years to establish itself as a true full-service airline competitor to Qantas.

Virgin Australia still now only held about a 30 per cent share in Australia's aviation market and was struggling to get hold in key corporate markets, which Qantas dominated.

Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

In his 16 years employed with Virgin, he had seen airlines make various decisions — "some of them crazy" — but it still would be a shame to lose what Virgin had built up.

On Thursday night the Federal Government announced up to $165 million in support to enable Qantas and Virgin Australia to service key metropolitan and regional routes over the next two months.

Virgin, which had suspended domestic flights last week, said the new schedule would enable it to reinstate 200 staff, including pilots, cabin crew and ground staff.

The extra government funding came after the aviation industry argued that an earlier $1 billion industry support package did little to help the sector because $715 million of it was made up of waiving certain fees that were not charged when planes were grounded.

mattyj 17th Apr 2020 02:27

https://cimg3.ibsrv.net/gimg/pprune....94a592c9b.jpeg

Dookie on Drums 17th Apr 2020 02:32


Originally Posted by krismiler (Post 10752647)

Stu Aggs eh? Wow could I share a story or two. He must have a roll of toilet paper under his chin for that one.

Buster Hyman 17th Apr 2020 03:27


He said when Ansett collapsed it took Virgin Blue (now Virgin Australia) more than 20 years to establish itself as a true full-service airline competitor to Qantas.
Goes to the root of the problem. Chasing corporate bucks & ignoring your base has come at a price.

Virgin Australia still now only held about a 30 per cent share in Australia's aviation market and was struggling to get hold in key corporate markets, which Qantas dominated.
Which was their goal in 2003. Not a great deal of ambition for the expense is it?

2020Balance 17th Apr 2020 03:27

Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

Yeah absolute shame Stu and Paul when you threw your first class Vainz and TT guys under the bus a few weeks ago who would have done whatever it took to help the airline. Take a number in the dole line with the rest of us.

Dookie on Drums 17th Apr 2020 03:41


Originally Posted by 2020Balance (Post 10752690)
Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

Yeah absolute shame Stu and Paul when you threw your first class Vainz and TT guys under the bus a few weeks ago who would have done whatever it took to help the airline. Take a number in the dole line with the rest of us.

Oh Stu and Paul threw a lot of people under the bus years before. As corrupt as you could possibly get.

Tommy Bahama 17th Apr 2020 03:49

Funny how Aggs has had ample opportunity to speak out about the path Virgin was on for the last 10 years! Now his backside is on the line hes finally screaming like a banshee.

Ichiban 17th Apr 2020 04:13

https://cimg8.ibsrv.net/gimg/pprune....471e7dc3ad.jpg

Ansett supporters rally in Sydney on September 14 2001, calling on the federal government to bail out the airline. Dean Lewins/AAP

Paragraph377 17th Apr 2020 04:27

Let’s all link arms around the depleted trough
 

Originally Posted by Tommy Bahama (Post 10752702)
Funny how Aggs has had ample opportunity to speak out about the path Virgin was on for the last 10 years! Now his backside is on the line hes finally screaming like a banshee.

Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.




Chadzat 17th Apr 2020 04:58

Sooooo many armchair experts on here - you retired blokes are the worst of the lot I must say. Nothing better to do with your sad retirement years than get on pprune and throw mud around everywhere. Get a hobby! It is cringeworthy and hilarious at the same time. How many of you intimately know what Stu has been doing in his roles over the years? Its far easier just to tarnish everyone with the same brush isnt it. Im far from a Company sympathiser but in all my dealings with SA he is one of the few people in VA I would trust implicitly that he has the best intentions for the business and the staff.

Lookleft 17th Apr 2020 04:59

A picture is worth a thousand words and Ichiban has just proved it. All this talk of the government must intervene and all the jobs that will be lost has been heard before with, tragically, what will be the same outcome.

Paragraph377 17th Apr 2020 05:02


Originally Posted by Chadzat (Post 10752725)
Sooooo many armchair experts on here - you retired blokes are the worst of the lot I must say. Nothing better to do with your sad retirement years than get on pprune and throw mud around everywhere. Get a hobby! It is cringeworthy and hilarious at the same time. How many of you intimately know what Stu has been doing in his roles over the years? Its far easier just to tarnish everyone with the same brush isnt it. Im far from a Company sympathiser but in all my dealings with SA he is one of the few people in VA I would trust implicitly that he has the best intentions for the business and the staff.

You must be one of the Village ‘specialists’.

And yes of course, PPPrune is only for those who aren’t retired and are still in the industry working. Of course! And because one retires that means they no longer know anything, they don’t have any vested interests in the industry anymore in any way, shape or form. A retired aviator no longer is allowed an opinion of free speech if it differs from Chadzat. Gee Chad, your posts over time have mentioned various opinions about a particular airline and Governments that you have never worked for, so perhaps you shouldn’t mention them publicly? Quite simply Mr Aggs has spent the past 20 years inside the VA bubble. And for a number of these recent years he has held decision making capability and has supported and promulgated numerous decisions that VA are sadly reaping today. Perhaps he is a ‘cool dude’ and lots of fun, easy to chat with and loves a beer with the boys too. Whoopydoo. All I’m saying is that the day IL Douche left should’ve been the day that other senior VA long term people should’ve also been asked to leave. It’s now pretty obvious why.

Open Descent 17th Apr 2020 05:23

I get the impression from that article that Scurrah is trying to extend the olive branch. Would have been nice to see Joyce do something similar.

Very early on, VA went on the attack against QF by trying to turn it into a popularity contest and his staff dutifully followed with an endless tirade of moronic and emotive social media posts that had absolutely nothing to do with the task at hand.
All of this of course on the back of an idiotic rant by AJ which was completely unhelpful and kicked this whole thing off.

I think Scurrah concedes their PR war against QF has gone a bit too far and is doing his best to tell his own people to pull their heads in.




machtuk 17th Apr 2020 06:19


Originally Posted by Paragraph377 (Post 10752728)
You must be one of the Village ‘specialists’.

And yes of course, PPPrune is only for those who aren’t retired and are still in the industry working. Of course! And because one retires that means they no longer know anything, they don’t have any vested interests in the industry anymore in any way, shape or form. A retired aviator no longer is allowed an opinion of free speech if it differs from Chadzat. Gee Chad, your posts over time have mentioned various opinions about a particular airline and Governments that you have never worked for, so perhaps you shouldn’t mention them publicly? Quite simply Mr Aggs has spent the past 20 years inside the VA bubble. And for a number of these recent years he has held decision making capability and has supported and promulgated numerous decisions that VA are sadly reaping today. Perhaps he is a ‘cool dude’ and lots of fun, easy to chat with and loves a beer with the boys too. Whoopydoo. All I’m saying is that the day IL Douche left should’ve been the day that other senior VA long term people should’ve also been asked to leave. It’s now pretty obvious why.

Nicely said, the 'boomers' (as the 'entitled generation like to call us) and others think once retired we should just go away and die, their turn will come one day, will they do the same?

Lookleft 17th Apr 2020 07:51

People only extend olive branches when they have something to offer. It seemed to be more a grasping at the rails at the back end of the Titanic.

The Bullwinkle 17th Apr 2020 07:52


Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.
I'd have to disagree there. Aggs managed to make many improvements despite being hamstrung by Il Deuce.
Would you rather still have Rob Blunt in that position?

SKYCAMEL 17th Apr 2020 09:12

Chazat - Don't believe all the spin you hear from management, you might be amazed at what has happened under the 3 stooges over the last few years. And I speak from recent experience with them.

MelbourneFlyer 17th Apr 2020 09:33

"Bring back John Thomas" ?

krismiler 17th Apr 2020 09:45

Credit rating now downgraded to junk status.

https://www.fitchratings.com/researc...ues-17-04-2020



Fitch Ratings - Sydney - 17 Apr 2020: Fitch Ratings has downgraded Virgin Australia Holdings Limited's (VAH) Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC-' from 'B-' due to the increasing uncertainty around whether the airline will be able to obtain additional financing to ensure it has sufficient liquidity while the coronavirus-related travel restrictions in Australia remain in place. The rating is removed from Rating Watch Negative (RWN), on which it was placed on 26 March 2020.The rating action follows the company's announcement that it is in discussions on restructuring alternatives. While Fitch believes that the company continues to work on financial assistance, we believe that travel curbs to contain the COVID-19 pandemic are increasingly straining its liquidity such that default is a real possibility.

VAH's working capital is increasingly being affected by cancellations, minimal bookings and outflows at its loyalty programme as members redeem points for non-flight benefits. The airline has now grounded most of its fleet to minimise cash outflows, but it is seeking options to shore up its liquidity. VAH's ability to secure this funding is important to maintain its viability.

Fitch believes the measures VAH took to ground its entire domestic fleet and run only the government-subsidised minimum domestic network will help the airline preserve cash flows. However, we believe the airline will run out of liquidity over the next six months without fresh third-party support. It remains uncertain when the travel restrictions will be lifted, and the time it will take for consumers to return to travel and VAH's operations to return to normal.

KEY RATING DRIVERS



COVID-19-Related Impact: Liquidity stress has been amplified as all non-essential travel between cities in Australia is effectively prohibited. VAH has suspended international operations and all domestic flights, except for the government-subsidised minimum domestic network. We expect cash-flow generation to fall significantly in the financial year ending June 2020 (FY20), and continue into at least 1HFY21. As a result, we believe that VAH will require fresh third-party financial support to ensure its survival during the travel restrictions and the aftermath once they are lifted.

Liquidity Pressure & Restructuring: VAH says that it remains in discussions on financial assistance. Fitch believes debt restructuring is a possibility unless VAH is able to obtain additional funding or some form of financial assistance from the government or another party. Fitch expects VAH to experience significant working-capital outflows for the remainder of FY20 as customers seek refunds and bookings fall sharply, and there are outflows for aircraft rent, staff costs, frequent-flyer point redemptions and other charges.

In our view, without additional funding over the next few months, there is a high chance that the airline will not be able to survive the impact of the COVID-19 shut down. We believe the government's relief package announced in March 2020, which provides refunds of airport charges incurred since February 2020, provides little support past FY20 given the grounding of most of VAH's fleet. Further, the government's announcement that it will subsidise a minimum domestic network from April to June 2020 will also provide little liquidity relief for the airline above what it could save with the grounding of its fleet.

Coronavirus Assumptions: Fitch now forecasts VAH's domestic capacity to fall by 100% for the rest of FY20, before recovering gradually from August 2020. We believe the government subsidies for flights will be, on the whole, earnings neutral and have not incorporated their effect into our forecast. We assume VAH's revenue passenger kilometres (RPK) and available seat kilometres (ASK) to gradually recover to close to our previous estimates by FY22. We believe that the coronavirus-related curbs in Australia will continue to have a strong impact on travel throughout FY21, although domestic travel may slowly resume over the next couple of months.

VAH's earliest debt maturity is USD350 million in October 2021, however the company is unlikely to be in a position to meet its debt service requirements beyond September 2020 without additional funding.

Limited Levers, but Lasting Impact: VAH has options available that we have not specifically incorporated into our short-term liquidity forecasts, including handing back leased aircraft and selling or borrowing against owned aircraft. We believe these measures, which would have a lasting impact and affect VAH's ability to recover, would be VAH's last line of defence. In addition, we have not included any potential further relief from the government to the aviation sector in our forecasts.

2020Balance 17th Apr 2020 10:27


Originally Posted by Paragraph377 (Post 10752715)
Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.


So true and accurate but you missed one key point mate . The dozen or so other oxygen thief specialists at the top as well


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