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)

The Bullwinkle 4th Apr 2020 03:39


Originally Posted by Colonel_Klink (Post 10738975)
Advocate for an industry wide package (akin to the US) to ensure that both airlines can get through this crisis in the interests of the aviation industry, the tourism industry and the economy more broadly.

Precisely.

Dookie on Drums 4th Apr 2020 03:45


Originally Posted by The Bullwinkle (Post 10738977)
Precisely.

I just think you are clutching at straws here. The Government is not going to invest in a dying venture. If QF and VA were on an equal playing field then sure. The fact is VAH are a bad investment. Multiple losses over the years etc. What more do you want?

Toruk Macto 4th Apr 2020 03:48

Aviation in Australia is akin to a blood sport , no doubt AJ is a rabid dog trying desperately to get at VAís throat for the kill .

We not in a fair world , itís more like a war footing where we put aside our normal competitive behaviour and do whatís best for the country .

The way VA has been managed, in normal times it may deserve to be left to fend for itself .
This is not normal times , the government need to do whatís best for the future not whatís right for now .

TACQANAVIAVEC 4th Apr 2020 03:59

Agree. Another point to consider that the longer this goes it's almost assured both airlines would return as smaller versions of them selves meaning lay offs. Like you mentioned if both airlines were on an equal footing then bailing out VA would seem worth while in the interest of saving jobs however why should the bottom layer of QF's employees be laid off at the expense off keeping alive out chronically miss managed Airline owned mainly by three foreign carriers?

I say let its three foreign backers bail VA out and if it fails well there's probably going to be a lot of jobs in QF's and Jetstar and eventually another carrier will replace Virgin just as it replaced Ansett back in the days.

Bug Smasher Smasher 4th Apr 2020 03:59

You guys seem to be missing the point(s).

1) No one (with a heart) at Qantas wants to see VA go under. It could very well be any one of us in that position and I canít imagine any one of us would wish that situation on their worst enemy. As has been said, there are a very small few people on here who may think otherwise but I can guarantee they donít speak for the rest of us.

2) Qantas as a business doesnít want to see VA go under. Better the devil you know than the devil you donít.

das Uber Soldat 4th Apr 2020 04:00


Originally Posted by The Bullwinkle (Post 10738933)
For all you "Angels" out there, Virgin was in the process of rectifying the atrocities of the last decade and were making many changes which were taking the company in the right direction.
Now, a "Black Swan" event comes along which threatens not just Virgin but indeed every airline in the world, your beloved QANTAS included, and all you want to do is kick a man when he's down.
I'm sure the Leprechaun is vey proud of your actions but you're actually quite disgusting!

What are you on about. There is no 'kicking' old mate when he's down, but holding what he says to account. Its terrible whats happening to not just Virgin but the industry, but that doesn't give you licence to just say whatever you want without consequence.

The failure of Virgin, if it occurs, is not the fault of this Government. Far out.

And for all this braying about people on here who want to see Virgin fail, I haven't seen one yet. Care to provide example?

RedClaw 4th Apr 2020 04:00

I love the fact that everyone has a crystal ball. I love the fact that we are in the middle of a health crisis that is causing the biggest economic reset in history, and all you can do is discuss how a company will collapse taking with it 1000s of people.

Yes JB spent a truckload of money, and yes the company has tried every strategy to compete with the competition, and yes itís ok to take sides, you love VA or you love Qantas, Tiger, Jetstar or whoever... I hate the bulldogs,, but I donít want their team to be taken out of the NRL comp because they go bankrupt, they provide for a good competition.

If you all think that Aviation as a whole does not need more cash through this... you are delusional, including Qantas the whole industry will need support now, in 3 months time, in 6 months time and most likely the next 2 years. The Australian economy will need affordable air services to recover. For the love of god, let the industry leaders and government sort this out, it is truly above your pay scale..

Dookie on Drums 4th Apr 2020 04:02


Originally Posted by Bug Smasher Smasher (Post 10738985)
You guys seem to be missing the point(s).

1) No one (with a heart) at Qantas wants to see VA go under. It could very well be any one of us in that position and I canít imagine any one of us would wish that situation on their worst enemy. As has been said, there are a very small few people on here who may think otherwise but I can guarantee they donít speak for the rest of us.

2) Qantas as a business doesnít want to see VA go under. Better the devil you know than the devil you donít.


Absolute rubbish. No one wants to see people lose their jobs. The rest is just business.

The Bullwinkle 4th Apr 2020 04:05


The Government is not going to invest in a dying venture.
It could be argued that due to COVID-19, most airlines around the world are dying ventures and yet most other governments are supporting their nations airlines. Why should Virgin be any different?

This is not normal times , the government need to do what’s best for the future not what’s right for now.
Exactly. Everybody is well aware of how badly managed Virgin was over the previous decade, but that was being turned around and Joyce knows it was.
He is obviously afraid of the transformation at Virgin but taking advantage of a worldwide crisis to try and destroy a competitor, as well as the livelihoods of the employees is abhorrent and despicable, yet not surprising from someone of such limited moral fibre.

crosscutter 4th Apr 2020 04:07

I think the less said the better..and this will be my last post on this thread.

It’s a sh*t spot. I wish everyone in Virgin the best, as I do the industry. Good luck to us all.

Dookie on Drums 4th Apr 2020 04:08


Originally Posted by The Bullwinkle (Post 10738989)
It could be argued that due to COVID-19, most airlines around the world are dying ventures and yet most other governments are supporting their nations airlines. Why should Virgin be any different?.

Their past history. They have lost sh!tloads year after year. We have Qantas so that is supported and that is that.

The Bullwinkle 4th Apr 2020 04:10


Originally Posted by Dookie on Drums (Post 10738991)
Their past history. They have lost sh!tloads year after year. We have Qantas so that is supported and that is that.

Can’t get over the past can you.

Fatguyinalittlecoat 4th Apr 2020 04:13

VA don't deserve saving anymore than any other business. COVID or not. It may not feel it, but it's not personal.
I don't want to see VA fail. That would mean restarting the fight against "crap money, pay for your training" type operators again. That's no fun. We all wish you the best if luck.

Dookie on Drums 4th Apr 2020 04:13


Originally Posted by The Bullwinkle (Post 10738992)
Canít get over the past can you.

I can but I am not blinded by it like you apparently are

The Bullwinkle 4th Apr 2020 04:16


and that is that.
https://getyarn.io/yarn-clip/4695332...8-bff561be2f0d


TACQANAVIAVEC 4th Apr 2020 04:23

People don't consider Joyce objective is purely in the interest of his business performance and by de-facto those employees that will have to be laid off when flying eventually resumes?. I'm sure most at QF don't wish their colleagues at VA to be out of work but would also side on wanting to keep as many of their lot with a job to return too.

The equation is simple: VA goes down = All of QF's employees very likely come back and many at VA's are employed at QF' and JQ just as it did happen after Ansett's collapse. Again I don't imply Joyce is doing it out of the kindness of his heart but purely as a business leader looking out for the performance of his business under very difficult and unique circumstances.

wheels_down 4th Apr 2020 04:23

They canít cede their 35% Corporate Market share if they go back to 2001, because they will go back to 5%, and are fighting against Jetstar. They did not have a competitor with 60 aircraft back then, because that was them.

The corp revenue is key going forward. Itís also a key driver in Velocity, and itís 200m earnings.

Its just unnecessary overheads that exist that is the issue, the Airbus and itís SH International network. Itís no trade secret that he is aware of this, and itís certainly no secret that in his first year his intentions are clearly on this.

Three crew bases will pull enormous cost out. Kiwi flying will be obviously cut or to a basic point to point. I wouldnít bother with Japan but the partnership could remain. Tiger is clearly done, so more cost gone. ATR program gone. All contracts and leases have just been negotiated. Forget Bali. Forget Pacific Islands. Thatís a large chunk of expenditure gone.

The MAX order is clearly going to be shelved until late this decade.

737 can do Canberra. Inefficient, yes, but still ahead once the ATR overheads removed.

*60-70 737s
*4/5 Triples

Dive into their past results, you can really see the issues lie around International and a Fleet complexity.

Icarus2001 4th Apr 2020 04:38


Tiger is clearly done,
No from what PS has said. The pilots have been made redundant but not the cabin crew. The Tiger airframes will be flown by VA pilots, that is the plan. Not sure about the A320s though. VARA 320 pilots?

Chris2303 4th Apr 2020 04:51

Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either

TACQANAVIAVEC 4th Apr 2020 04:53

I think you'll find most of QF's drivers here are those who likely find them selves at the bottom of the barrel and thus the ones in the firing line when flying eventually resumes at a smaller scale.

People here seem to forget that theres another side of the story with real people, family and commitments at stake who, should VA be spared with tax payers money will literally mean sacrificing those at the bottom of the barrel across QF and their subsidiaries at the expense of saving a badly managed business.

I don't wish my colleagues at VA to be out of work but I also side with those colleagues of mine at QF who are staring at possibly not having a job to come back too. History shows many at VA's would be needed at QF and JQ to fill the void left behind and eventually another airlines would rise from the ashes to provide further employment.

DanV2 4th Apr 2020 05:51


Originally Posted by Chris2303 (Post 10739008)
Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either

Considering UA was pulling out of SYD-LAX during the NS months and reducing those services to NW seasonal before the pandemic hit. UA's pull out on SYD-LAX would leave a little wriggle room for QF/AA and perhaps DL/VA should the later joint-venture group return to TransPacific flying when this subsides (and if VA survives in a smaller form for that matter).

Ichiban 4th Apr 2020 06:09

Obviously a bit US-centric to US laws, but still interesting from an airline business perspective.

Joshua D. Rauh is a senior fellow at the Hoover Institution and Ormond Family Professor of Finance at the Stanford Graduate School of Business.

https://www-chicagotribune-com.cdn.a...outputType=amp

AerialPerspective 4th Apr 2020 17:22

[QUOTE=deja vu;10737875]

Originally Posted by Gnadenburg (Post 10736457)
Having gone through the Ansett demise and a period of unemployment, the government did a good job with helping ensure the payment of owed wages and benefits. The tax liability was small and I ended up with far more cash in hand than expected.

If I recall correctly, you guys got your "owed wages and benefits' as as an enforced levy on air tickets from a blackmailed flying public, a disgraceful sham.

Yes, every cent of which was paid BACK to the Commonwealth before the final entitlements were paid and NO, the total owed wages and benefits were not paid, given most got around 93% and I guess with each successive payment being treated as a separate ETP, probably came out roughly square.

The reason that was done is because, along with a litany of company problems, the dumb government that was there when the axe fell had some modicum of responsibility for having given FIRB approval to the sale of the final 50% to Air NZ, the same Treasurer and PM who bailed out the PM's brother's company a few years earlier, the same Treasurer who gave FIRB approval to APA to take over Qantas, a takeover that ultimately failed and so did APA several months earlier. Thanks to these idiots, Qantas would have went with it. Qantas was indeed lucky that one single shareholder held out and told APA to get stuffed as he held the balance of shares and knew they were just there to skin it, empty it's bank accounts and throw away the carcass. Mr bloody Costello, Keating was right when he said Costello was the laziest treasurer in history and a low altitude flyer. If FIRB exists to protect the national interest, why would this moron give approval for two major airlines when billy the blind man's dog could see it was not in 'the national interest'.

AerialPerspective 4th Apr 2020 17:31


Originally Posted by krismiler (Post 10738974)
Any company going under has a knock on effect, you know what happens when the major employer in a small town goes broke, everyone is affected. It’s not just Virgin, it’s their maintenance providers, fuel and catering suppliers, advertising agency, IT system managers, accounts, landlords of their office buildings etc etc etc.

The country will be in survival mode for a long time to come. Vital sectors will need to be preserved to provide the framework to support the recovery. A skeleton critical mass needs to be kept in place to develop around.

There will be very little spare money as tax revenues will plummet and welfare demands will soar.

An airline industry is critical to Australia given its isolation and vast domestic distances. The bankruptcy of Sabena wasn’t critical to Belgium as there were no domestic flights and everywhere was easily accessible by road and rail. International destinations were served by other airlines flying into Belgium or easy connections through a multitude of nearby hubs such as Amsterdam or Paris.

Even the shortest routes of Australia’s economic golden triangle, Sydney/Melbourne/Brisbane have no practical alternative to flying and having large areas of the country cut off wouldn’t be acceptable.

My take is that there will be a small and highly conditional bail out of Virgin which would enable it to retain a limited domestic network on critical or previously profitable routes. Employee and fleet numbers will be slashed, international and wide body operations curtailed. Staff will be handed new contracts on a “take it or leave it” basis. The company will revert back to where it was around the time Ansett went under.

Actually, it won't revert back, it will either revert or it will go back, but not 'revert back'. That's the same as saying 'return back' instead of return or go back, it's a tautology.
As for the remainder of the comment, I think your probably quite right.

AerialPerspective 4th Apr 2020 17:43


Originally Posted by Chris2303 (Post 10739008)
Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either

Exactly. The comment was in fact pretty uninformed, the 'cabotage' was actually SQ, AC, NZ and others operating on behalf of AN. This occurred also during the 767 grounding, with coming to work in the morning to see two 767s on Gates 31 and 33 in Sydney, one AC and the other NZ.
The post collapse effort was only temporary until QF leased a few ex AN leased aircraft and ramped up.
The original idea was for AN Pilots and Crew to operate a wet lease with QF flight number, using AN equipment of course, but who stopped that? Unions, who insisted it operate from AN terminals so the AN ground staff could check it in and load it, logistically dumb considering they would all have to have been trained by QF to use the QF system(s), albeit similar to AN's and ticketing, etc. So, a lifeline of sorts was offered and the opportunity for some pilots and cc to continue working lost because of shortsighted unions.
AN's 'genius' HR department also threatened anyone who actually took a job with QF temporarily would be considered to have resigned because they had taken a job with a competitor and would thus not be entitled to redundancy. When that was said, any respect left for the company dissipated for quite a few.

itsnotthatbloodyhard 4th Apr 2020 20:57


Originally Posted by AerialPerspective (Post 10739562)
Actually, it won't revert back, it will either revert or it will go back, but not 'revert back'. That's the same as saying 'return back' instead of return or go back, it's a tautology.
As for the remainder of the comment, I think your youíre probably quite right.

Not a tautology, at least. :ok:

TimmyTee 4th Apr 2020 22:03

Imagine how short this thread would be if we had a way of turning off all the "expert financial analysis" comments made by current and former Qantas employees...
(could probably mop up a few of the remaining comments if we also could exclude QF shareholders)

TBM-Legend 4th Apr 2020 22:08

Propping up failing businesses is a road to nowhere. Please look at the Australian car manufacturing industry and the outcome of hundreds of millions spent on them. VA losses are gigantic by any measure. They can not keep using a credit card to survive. Sooner or later you reach the limit and then in their case demand another card...

There will be another airline in Australia. Upgrade Alliances AOC and put some B737's on it and voila..[QF sells their bit in this case]

Paragraph377 4th Apr 2020 22:45

[QUOTE=AerialPerspective;10739553]

Originally Posted by deja vu (Post 10737875)

Yes, every cent of which was paid BACK to the Commonwealth before the final entitlements were paid and NO, the total owed wages and benefits were not paid, given most got around 93% and I guess with each successive payment being treated as a separate ETP, probably came out roughly square.

The reason that was done is because, along with a litany of company problems, the dumb government that was there when the axe fell had some modicum of responsibility for having given FIRB approval to the sale of the final 50% to Air NZ, the same Treasurer and PM who bailed out the PM's brother's company a few years earlier, the same Treasurer who gave FIRB approval to APA to take over Qantas, a takeover that ultimately failed and so did APA several months earlier. Thanks to these idiots, Qantas would have went with it. Qantas was indeed lucky that one single shareholder held out and told APA to get stuffed as he held the balance of shares and knew they were just there to skin it, empty it's bank accounts and throw away the carcass. Mr bloody Costello, Keating was right when he said Costello was the laziest treasurer in history and a low altitude flyer. If FIRB exists to protect the national interest, why would this moron give approval for two major airlines when billy the blind man's dog could see it was not in 'the national interest'.

Oh yes, Peter Costello, the man who took his eye off the ball for several years while being consumed with his lust for Howardís job. The same jerk that authorised the sale of Australiaís 167 tonnes of gold in 1997, in a sale timed to suppress the price of gold, to bury it forever, and replace it with government paper. Gotta love that fiat money hey Pete, you can just keep printing off more!!! He sold it at market price (fool) and it was around $400 per ounce back then. We lost at least $5b on that deal, in todayís value even more.


Berealgetreal 4th Apr 2020 22:47

The word is an Asian LCC into The Virgin space.


Though I think Alliance would do a great job of it personally.

galdian 4th Apr 2020 23:04

Has anyone asked Alliance if they woulds want to play in the shitfight that Australian RPT ops have become?

Maybe they're happy just doing what they do in their little niche, making profits along the way?

Equally if VA went bust how much of a hit to the Alliance balance sheet for services provided but (probably) income never received?

Not saying they couldn't make a go of it....but why bother?

Cheers

markontop 4th Apr 2020 23:15

Asian LCC?
Great provided CASA acts without fear of favour.
Or professionally without political(that’s you QF) influence.

krismiler 5th Apr 2020 00:40

A while back there was talk of Indonesia's Lion Air starting a subsidiary in Australia. Before everyone falls about laughing we would be looking at Australian registered aircraft, on an Australian AOC, flown by Australian licensed pilots with CASA oversight.

longjohn 5th Apr 2020 00:55


Originally Posted by TimmyTee (Post 10739780)
Imagine how short this thread would be if we had a way of turning off all the "expert financial analysis" comments made by current and former Qantas employees...
(could probably mop up a few of the remaining comments if we also could exclude QF shareholders)

Timmy - are you suggesting that despite being taxpayers, those having any involvement with QF should forfeit their say on how their tax dollars are spent on matters pertaining to VAH?

With due respect, bias, so long as its recognised, does not invalidate an argument.

Berealgetreal 5th Apr 2020 01:16

I reckon a new operator would just pick the low hanging fruit ie triangle and capital cities.

Regional ports will be Qf Group and the rest. The days of having multiple jet services at a regional port not making a dollar are coming to an end.

PoppaJo 5th Apr 2020 02:09

Due to large oversupply of flight crew for the rest of this decade, Air Asia and Lion would be able to get away with paying Right Seat 80k and Left Seat 150k. Those numbers are being generous also. They contract the entire ground crew, and the cabin crew to third party operators. They already have the large scale low priced Jet orders coming.

Icarus2001 5th Apr 2020 02:24


be able to get away with paying Right Seat 80k and Left Seat 150k.
If VA shuts down, in six months time pilots will be lining up for a job with those numbers.

krismiler 5th Apr 2020 02:43

When we eventually get back to work again, I reckon we'd be lucky to be on 75% of our previous incomes, and that's for those fortunate enough to have a job. Even airlines which were profitable and had substantial cash reserves are being hammered, there are very few which won't need a bail out or some form of rescue package, and the list gets shorter everyday this goes on.

Any government support will come with a long list of conditions, one of which will certainly be a "realistic" wage deal with the employees. There will be very little sympathy for someone previously on $250 000 a year having their pay cut to $180 000 when millions of people are out of work. Anyone such as baggage handlers and flight attendants in QF whose pay and conditions are substantially higher than those in similar jobs, simply because it's Qantas, will see their pay brought back to rates comparable to what other Australians doing the same work will be getting.

Very few sectors will have any bargaining power with their employers except for example dockers, police and emergency services.

There will be little scope for enterprise bargaining until the industry is back on its feet again which will take years. There are very few of us who will be back at work on our old terms and conditions, I was going to say current terms and conditions but with so many redundancies, lay offs and groundings the contract you have at the moment is past tense.

One upside is that everyone is in the same boat and the financial institutions know it, so renegotiating current loans to a longer term at a lower interest rate will be relatively easy. Also prices will fall so anyone who's reasonably cashed up will be able to pick up a few bargains.

Lapon 5th Apr 2020 04:23


I was going to say current terms and conditions but with so many redundancies, lay offs and groundings the contract you have at the moment is past tense.
If your airline survives and you keep your job your contract is not going to change.
Pilot wages and conditions in this part of the world have rarely been dictated by supply and demand.

PoppaJo 5th Apr 2020 05:35

The guys in Singapore, Vietnam or Japan wonít have choice. No Union No Choice.

Jetstar Asia will probably slash Pilot Remuneration considerably. Expect 10 or 20% cuts. Tiger Singapore did this about a decade ago, didnít go down well, but the industry didnít crash, just high fuel prices. As the market was relatively stable and big twin jobs were available, they lost half the captains almost instantly.

Back then, you cut pilot wages and everyone walked and went to Qatar or Emirates. Management will be well aware that there isnít many jobs for those to escape to now, so the wider group will just have to suck it up.

I have been talking to many who say they hope their company will ask for Voluntary Redundancies, as they are 2-3 years away from retiring, but itís going to be a slow and miserable last few years of the career, so take the cash and run.

Obviously they canít chop and change current agreements here as such, but I imagine it would be more culling, than attempting to change conditions. Eg. Jetstar entire 787 fleet parked, sold and pilots made redundant. The long haul leisure market is the pain point, Air Asia X is probably finished. They could barely pay their leases last month according to some reports. Scoot will be the long term survivor, although I might be nervous if I was on the 787 there.


All times are GMT. The time now is 10:41.


Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.