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

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.


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