Nope. The War of Terror. That was a joke, Joyce.

I see you have been impaled with a CX sense of self-seriousness. Lighten up fella.

Lolololol sorry, read that as ON.

You’d have to say a significant restructure has and is going on. The 750 redundancies announced last year represented about 7.5% reduction in (mostly) head office staff.

You now have had 200 odd Tiger pilots been made redundant, as well as TT cabin crew from Sydney and Brisbane as the whole TT operation is to be brought on to VA AOC. This will drive further efficiencies and I would envisage more possible job losses from TT head office in ML.

And finally you have had the whole NZ operation, 200 pilots as well as the entire VANZ cabin crew and AKL and CHC based office staff are gone too. Again, the international short haul network when it eventually returns is to be crewed and flown from Australia.

These are all big changes and what I would consider significant restructuring. If VA come out the other side of this, they will be a lot leaner operation.

A couple of points in relation to this.

Firstly, the restructuring was already in place with projections Virgin was well on track to break even by mid to late this year. Scurrah had already made significant changes to structure and the cost base with more to come. This was why was brought in by the board and he was doing his job well. The timing of this is unfortunate and year from now Virgin would likely have been at or close to profitability.

Nevertheless, the historic profits or losses of an airline are largely irrelevant in this case, despite the claims here that they are. Debating this is an emotional reaction to a lack of knowledge of business in general. It is perfectly acceptable, and often done, that investment in a loss making business takes place. It's important to understand the basic premise that a loss making business (Uber, as one example) can continue to increase in value despite posting billions in losses again and again.

The underlying value of a business, both direct and indirect, does not relate to whether it is posting a profit or a loss or whether it's worthy of investment - this depends on its importance and projections, both of which are a strong positive for Virgin given the very recent changes within the business. Once again, and most importantly, this is not a case of failure in a free market capitalism environment - that can't be stressed enough. The other point to make is that Virgin has added billions to Australia's economy while foreign (not domestic) shareholders absorbed those losses. Not a bad outcome for the country.

By the "loss logic", had this happened 5 years ago, people have been pointing at Qantas that their billions in losses in the few previous years made them unworthy of a bail out. We know this simply not to be the case - Qantas adds far too much to Australia's economy and more to allow it to go under, regardless of its balance sheet.

Secondly, the factors that are largely being taken into account according to the media are the fact that it is majority foreign owned, and whether or not the infrastructure adds enough to the country's economy for it to be worthwhile of lending. Regarding foreign ownership, the government just last week bailed Rex out, an airline 100% foreign owned by a Singaporean and one that has made consistent profits for years with all of those profits heading offshore. The logic of not bailing out a foreign carrier because it is foreign owned has already been show to be secondary in the current environment with the government focusing on whether or not they believe its survival adds enough to the economy and the regional infrastructure. Just this morning the government is chartering both Qantas and Virgin flights, underwriting their losses, to repatriate citizens. This is an important recognition that Virgin is indeed adding to an important part of our country's infrastructure, by that action alone.

I'm trying to be impartial and objective here and simply trying to point out the realities of how it works on a business and economic level. Obviously there is a lot of emotion and sentiment but overall, it simply does not appear to be in the country's interest for Virgin to go under given the specific circumstances surrounding the predicament they find themselves in. There will be no one to fill the void and the country will pay the price in many different ways for many years to come, which isn't desirable for anyone at all.

Cheers.

Dragun, you’re being much to reasonable:-) let’s also mention that VA pays (I believe, but don’t have an actual figure) about 400 million a year in employee income and payroll taxes. Let’s also mention that QF has breached its foreign owned ratio a few times over the years, yes it was marginal due to bulk buying and was corrected when detected but, for a brief moment it was majority foreign owned. AJ has been spruiking for years to relax the Qantas Sale Act so they could get more foreign investment. Imagine if HNA or Etihad had invested in QF instead, and they would have if allowed, and were now struggling, dodged a bullet there........

Optimistic business projections based on a “turnaround” playing with other people’s money?
Which airline has ever made money from a loss making position reinventing itself into the worst recession in history?
But heh I’m a pilot. I’ll wait for the business experts and those voicing “national interest” with a side of self interest to prove me wrong.
PS is that you?

Interesting read, I make no comment.

https://www.zerohedge.com/economics/...uthwest-shares

I'm not sure I understand your point about other people's money. It's public company with an incredibly small free float. Can you elaborate?

Businesses project all the time based on restructure and turn it around. Qantas shed 5000 jobs as part of attacking their cost base only a few years ago, this is common practice every few years by any large enterprise.

Not trying to prove anyone wrong or right, no one knows which way this will go. As I've said all along, I'm just being objective which means no self interest. I'd be the first to say that if Virgin found themselves going hat in hand to the government a year ago (in a normal, functioning economy) then they absolutely should not have received it and gone to the wall. However, these times and the reasoning behind this request is very, very different. That's the reality whether people like it or not.

If 8 out of the last 10 years Virgin had been profitable the argument might hold, but it’s the other way round.

For this reason, even with possible support, I suspect the business we know is gone. You can put a line through every route than ran at a loss the last 24 months. Reduced capacity at a minimum. Assets sold to match the demands of the white knight. QF will be rationalising also.

I would say that post Carona there will be no need for the capacity from pre Carona from even one airline.
QF will have way more aeroplanes than the market needs.
Other people’s money;
Creditors (please help, national interest, keeping the air fair- twenty years old now)
Tax payers (that would be Airnav charges)
Staff (leave without pay, that would be yours)
Playing would be the newspaper ads.
Finally do VA have the money to last for how long?

Why do people think Virgin or Qantas is different to Holden? You’ve got to prove an ability to stand on your own two feet. What more support can the government provide that is industry wide? How do you provide support to one business without changing the competitive landscape? If you have the answers get it public quickly because it’s going to be more effective than a political advertising campaign!

It’s better to exclude all the actions taken by Scurrah as that doesn’t justify spearing 10,000 hard working employees Then you can hand over the keys to all the gates and routes to the larger competitor which already has the lions share of corporate and government work for decades.

Can’t imagine how they made a profit and we didn’t adopting their petulant child for decade.

Let’s also ignore Godfrey’s record: 9 profits out of 10 with the 1 being the GFC while we are at it.

The orchestrator of most of the problems rode off into the sunset with millions never to be questioned by anyone.

VAH can expect zero bail out funds from the Commonwealth. If the Queensland Government wish to assist that is their prerogative. I am afraid VAH are going to have a slow uncomfortable demise. A contact in Treasury has stated VAH are in a hopeless position. The VAH board have to make a decision soon re administration or face the prospect of jail time. Ansett were put in Administration after losing $182M over the course of a year.

A hopeless position created by someone that didn’t close the borders when it was clear what was going to happen.

The restructure had started a year ago and was gaining momentum.

Careful. Does your source have a name or are you just trying to influence an outcome....? This is the same as AJ claiming he has intimate knowledge of his competitors financial position and stating such to journalists....

This is an absurd argument. You cannot be a financial disaster for more than 10 years straight and then lay the blame for your failure with a perceived misstep by the Government in dealing with an unprecedented health crisis at the 11th hour. Its like skydiving with a faulty parachute into someones house, then claiming the house owner is responsible for the death because they built the house in wrong place.

The 'hopeless position' was created by Virgin management, stop trying to offset blame. Virgin have nobody to blame but themselves.

You must be pretty confident the situation will resolve pretty shortly. What if it drags out and starts eating away at the QF reserves.

The government had all the information to close the borders and fumbled there way to where we are today.

You’re happy with the actions of the government?

What I can’t get my head around is front line QF staff wishing the failure of friends and former colleagues.

Good link DM. I read that article early this morning. There are some serious aviation issues in play. United could be losing up to $100m per day. Phenomenal amounts of money.

I stick to my prediction, albeit based upon a lot of unknowns yet to come, there will be only 20 or so mainline carriers worldwide that will remain in play once this crisis is over. As aviators we often get caught up in what’s happening in our own patch. It’s not a criticism, it’s just what we do. But there is a bigger picture and we are only a small spec. Just as the world changed after 9/11 the world will have changed again by the time COVID-19 it is under control. Economies, house prices, taxation levels, future infrastructure, services, superannuation - all changed, and not for the better. Sadly, VA is gone. Done and dusted. It’s the bitter and unpalatable truth. It joins Ansett, Pan Am and others. Any Phoenix rising out of VA’s ashes will be a different, new airline.

The worlds obsession with printing money, endless debt and creative accounting could only go on for so long. The day Nixon ended the gold standard and murdered the Bretton Woods system was the day fiat money entered the worlds financial system, which after 50 years has culminated in the mess we are in today. COVID-19 is the match that finally ignited the financial tinderbox. Some of you younger pups will be thinking; ‘what is this old fart going on about’. Sadly, the inevitable collapse of the Ponzi scheme has commenced. If you think the **** has hit the fan now, I suggest you buckle in tightly as this is only the beginning. Unless you have studied economics and understand financial systems in depth you likely never saw this coming. Not in a million years.

Best of luck to everybody as we are going to need it.

Yes, the Government actions are a contributory factor. The house in my analogy is also a contributor factor, after all, it killed the skydiver. Whats plainly obvious however, is that if the skydiver didn't hit the house, he would have hit something else just as deadly soon enough.

I've listened for more than a decade about Virgins 'plans' to turn it all around. The reality is no investor would look at their situation and assign this claim any credibility beyond all those before it, which is exactly why they've been entirely incapable of securing financing and have had to approach Government.

Now, as you say, this may drag on (hope to hell it doesn't), and it may eat into QF's ability to remain solvent. The difference however, is that COVID would be the cause, not a contributory factor. QF is profitable, and would have continued to exist indefinitely were it not for this crisis. Virgin on the other hand, well, there aren't any "QF pilots worried about employment in 2021" threads that were created long before this crisis now are there?

Now there is a temptation to take what I've written and believe it an attack on the people of Virgin, or a desire to see it go. Thats the last thing I want, I like all of us have many friends there and know the devastation a collapse will bring. However this doesn't mean I accept the apportioning of blame where it doesn't belong.

If Virgin folds, the primary cause is their own management.

What’s virgin worth to Australia post virus ? If government want cheap seats to help stimulate economy then there are lots of wide body’s flying in from overseas that can stop in Darwin and pick up domestic passengers . Triangulate Brisbane , Sydney and Melbourne before heading back overseas , requires opening Australia to overseas players . Allow Qantas a monopoly? They have capacity but watch prices rise and Qantas get bloated and slow ? $1.4B is a big ask to keep a badly managed company going and it does not pass the pub test for fairness but what’s in best interest of the nation for next 3-5 years ? I think the owners of virgin know the answer and that’s why they not putting any money in .