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-   -   "Virgin Australia Mk II could launch in as little as three months" (https://www.pprune.org/australia-new-zealand-pacific/631831-virgin-australia-mk-ii-could-launch-little-three-months.html)

Lapon 26th Apr 2020 02:37


Originally Posted by jethro_027 (Post 10763313)
I’m curious about the legalities of this impounding aircraft kerfuffle. Any lawyers in the house able to give a perspective?

Do the airports need to apply to the court before doing this or can they just go ahead? If the aircraft are leased, then they can’t really seize assets VA does not own? Isn’t this circumventing the administration process? Is is correct to say that this is an attempt by an unsecured creditor to become a secured creditor? If you can seize assets, wouldn’t you only be able to seize assets to the approximate value of what you are owed?

I wouldn't go so far as to say impound or seize. It sounds like an airport company equivalent of wheel clamping.
Maybe the pushback tugs could fix the problem.

In any case how did the dozer drivers get an asic and airside drivers permit so quickly??? :}

Lead Balloon 26th Apr 2020 02:48


Originally Posted by ozbiggles (Post 10763311)
It shows how inept you must have to be to qualify to be on an Airport board,
Trying to sabotage your best bet at using your half empty terminals in the short term by blocking in leased, unused aircraft. Brilliant! It is actually the first thing that has got Qantas and Virgin working together again.
And if I was a bored American aircraft lease owner with no money coming in for my aircraft I would have a crack at suing the relevant airport boards for a few million dollars.
I have a feeling there will be a couple of Airport boards getting a few calls from the politicians this weekend and the nonsense will stop....but the damage has been done.

Does seem to take a special kind of stupid not to realise that heavy metal is practically worthless for quite a while.

Jethro: I suspect that the terms of use of BNE create a lien enforceable in relation to the aircraft. Clause 10.4 of the "Brisbane Airport Aviation Services and Charges Agreement – Runway System" (here https://www.bne.com.au/sites/default...ent-RUNWAY.pdf) says:

10.4 Right to detain aircraft

For all users other than Major Users, if you do not pay the Aviation Charges or the Government Mandated Charges on time then we may detain your aircraft and hold your aircraft pending payment.
Interestingly, Virgin appears to fall within the definition of "Major User" in clause 19.1:

Major Users means:

(a) any airline or aircraft operators that, at the relevant time, represents at least 10% of the total passenger numbers at the Airport; ...
Perhaps BNE takes the view that the relevant time is 'now', and now Virgin's passenger numbers are squat?

There is a useful article on creating liens here: https://www.piperalderman.com.au/__f...ber%202011.pdf

I reckon the legal situation would be different if individuals were on an aircraft trying to fly out, but I note that mere legalities don't stop arseholes from flexing their muscles.

Oriana 26th Apr 2020 03:02

Deliberately obstructing an aircraft has gotta be in contravention of CAR95.

wondrousbitofrough 26th Apr 2020 03:06


Originally Posted by Lapon (Post 10763335)
I wouldn't go so far as to say impound or seize. It sounds like an airport company equivalent of wheel clamping.
Maybe the pushback tugs could fix the problem.

In any case how did the dozer drivers get an asic and airside drivers permit so quickly??? :}

Lapon ,please refer my post #60

Denied Justice 26th Apr 2020 03:06


In any case how did the dozer drivers get an asic and airside drivers permit so quickly???
Vehicles and drivers employed by Perth Airport will have airside access, vehicle permits and ASICs, so I don't think it's an issue.

Maybe driving a dozer without due care in close proximity to an aircraft without the required training is a problem though.

Variable Incidence 26th Apr 2020 03:20

Knowledgeable comment from a reader who deals with business efficiencies in the online version “The Australian” wrt Virgin’s management under PS:

“It seems to be either lost on some observers or just blithely ignored by them that prior to the COVID-19 crisis breaking, Paul Scurrah had just announced the worst first half results for Virgin since the GFC and the second worst half year result in the entire history of the company; an $88.6 million loss for the six months to 31 December 2019.

While overall revenue rose by 1.5 percent ($47.2 million) that was comprehensively wiped out by a $223.5 million (7.5 percent) increase in expenses. And that increase in expenses would have been higher if not for the application of a new accounting practice, AASB16, that allowed for some operational expenses to be capitalised and recorded on the balance sheet.

When you look past the effect of AASB16 every expense line for the business went up. Astoundingly for a business that was meant to be cutting 7.5 percent of its workforce, labour costs went up by nearly 6.5 percent! That lack of cost control would be worrying for an airline in just normal business-as-usual operations, for a business that had a history of haemorrhaging money and was ostensibly focused on a turn-around, it was most assuredly not a good sign.

And when you look at what was going on in domestic, matters were even more worrying. Revenue grew by $31.9 million (1.5 percent) but profit fell by $65.2 million (36.6 percent). That's not a misprint. Virgin essentially lost $2 for every $1 of extra revenue that they gained.

The effect of their inability to manage costs and yield meant that profitability for domestic fell to 5.34 percent (for the same period pre-Scurrah it had been around 8.55 percent, at Qantas it was 14.4 percent).

And Paul Scurrah reckons that Virgin was “headed towards profitability in the not-too-distant future”. Please! “

Begs the question then, is PS really the best man for the job going forward, given business metrics were actually getting worse?!


PoppaJo 26th Apr 2020 03:31


Originally Posted by Variable Incidence (Post 10763366)
And Paul Scurrah reckons that Virgin was “headed towards profitability in the not-too-distant future”. Please! “

Begs the question then, is PS really the best man for the job going forward, given business metrics were actually getting worse?!

I think it’s a case of the new finance guy walks in and finds surprises left right and centre.

He was only in the job for a month or two before he issued a heavy profit downgrade. He obviously found all sorts of stuff.

A few months prior to that the Italian was on some Business show bleating ‘leaving on a
high’ ... ‘best shape the business been in’...’best profit result in my tenure’ ...and some comment about how good he was or something but I won’t even entertain what he said.

chookcooker 26th Apr 2020 03:32


Originally Posted by Variable Incidence (Post 10763366)
Knowledgeable comment from a reader who deals with business efficiencies in the online version “The Australian” wrt Virgin’s management under PS:

“It seems to be either lost on some observers or just blithely ignored by them that prior to the COVID-19 crisis breaking, Paul Scurrah had just announced the worst first half results for Virgin since the GFC and the second worst half year result in the entire history of the company; an $88.6 million loss for the six months to 31 December 2019.

While overall revenue rose by 1.5 percent ($47.2 million) that was comprehensively wiped out by a $223.5 million (7.5 percent) increase in expenses. And that increase in expenses would have been higher if not for the application of a new accounting practice, AASB16, that allowed for some operational expenses to be capitalised and recorded on the balance sheet.

When you look past the effect of AASB16 every expense line for the business went up. Astoundingly for a business that was meant to be cutting 7.5 percent of its workforce, labour costs went up by nearly 6.5 percent! That lack of cost control would be worrying for an airline in just normal business-as-usual operations, for a business that had a history of haemorrhaging money and was ostensibly focused on a turn-around, it was most assuredly not a good sign.

And when you look at what was going on in domestic, matters were even more worrying. Revenue grew by $31.9 million (1.5 percent) but profit fell by $65.2 million (36.6 percent). That's not a misprint. Virgin essentially lost $2 for every $1 of extra revenue that they gained.

The effect of their inability to manage costs and yield meant that profitability for domestic fell to 5.34 percent (for the same period pre-Scurrah it had been around 8.55 percent, at Qantas it was 14.4 percent).

And Paul Scurrah reckons that Virgin was “headed towards profitability in the not-too-distant future”. Please! “

Begs the question then, is PS really the best man for the job going forward, given business metrics were actually getting worse?!

yes making people redundant is expensive. Who knew??

Variable Incidence 26th Apr 2020 03:51


Originally Posted by chookcooker (Post 10763372)
yes making people redundant is expensive. Who knew??


I’m no expert and posted my first comment as an interesting inside take on some of the actual ‘business’ figures.
A great airline sadly is often not a good, well run business!

But, there’s a little more to it than redundancies being responsible for those figures. Wishful thinking perhaps?

I wish you well, and for the record do not want to see Virgin fail or it’s employees lose their jobs by being collateral damage of poor management and big egos! Merely wondering if PS is really the right man to stay at the helm!

chookcooker 26th Apr 2020 03:54


Originally Posted by Variable Incidence (Post 10763382)
I’m no expert and posted my first comment as an interesting inside take on some of the actual ‘business’ figures.
A great airline sadly is often not a good, well run business!

But, there’s a little more to it than redundancies being responsible for those figures. Wishful thinking perhaps?

I wish you well, and for the record do not want to see Virgin fail or it’s employees lose their jobs by being collateral damage of poor management and big egos! Merely wondering if PS is really the right man to stay at the helm!

750 staff at and average of 50,000 redundancy ( conservative. Probably more) is $37.5M

if the labour costs only increased by $6M in that same time then, well you do the maths

Variable Incidence 26th Apr 2020 04:05


Originally Posted by chookcooker (Post 10763385)
750 staff at and average of 50,000 redundancy ( conservative. Probably more) is $37.5M

if the labour costs only increased by $6M in that same time then, well you do the maths

You’re lucky I’m not a fisherman! Do you always bite?

Respectfully, I make not further comment and wish you well!

non_state_actor 26th Apr 2020 04:21


I had a quick look at someones Linked Resume recently and, it shows they never held a Job down for more than 5 yrs at the most. Just an observation. Make of that what you want.
That is normal at high level in a business. Virgin itself has had a cavalcade of senior management in the past 10 years but the same could be said about any large company. Once you move into senior leadership roles in a large company you are either promoted or moved on. Part of the reasoning is they need a constant supply of talent able to take senior roles. It also keeps everyone on their toes knowing the rug could be pulled from under them at any time. What affect that has on long term strategic planning is probably the question to ask.

Lead Balloon 26th Apr 2020 04:51


Originally Posted by Variable Incidence (Post 10763366)
Knowledgeable comment from a reader who deals with business efficiencies in the online version “The Australian” wrt Virgin’s management under PS:

“It seems to be either lost on some observers or just blithely ignored by them that prior to the COVID-19 crisis breaking, Paul Scurrah had just announced the worst first half results for Virgin since the GFC and the second worst half year result in the entire history of the company; an $88.6 million loss for the six months to 31 December 2019.

While overall revenue rose by 1.5 percent ($47.2 million) that was comprehensively wiped out by a $223.5 million (7.5 percent) increase in expenses. And that increase in expenses would have been higher if not for the application of a new accounting practice, AASB16, that allowed for some operational expenses to be capitalised and recorded on the balance sheet.

When you look past the effect of AASB16 every expense line for the business went up. Astoundingly for a business that was meant to be cutting 7.5 percent of its workforce, labour costs went up by nearly 6.5 percent! That lack of cost control would be worrying for an airline in just normal business-as-usual operations, for a business that had a history of haemorrhaging money and was ostensibly focused on a turn-around, it was most assuredly not a good sign.

And when you look at what was going on in domestic, matters were even more worrying. Revenue grew by $31.9 million (1.5 percent) but profit fell by $65.2 million (36.6 percent). That's not a misprint. Virgin essentially lost $2 for every $1 of extra revenue that they gained.

The effect of their inability to manage costs and yield meant that profitability for domestic fell to 5.34 percent (for the same period pre-Scurrah it had been around 8.55 percent, at Qantas it was 14.4 percent).

And Paul Scurrah reckons that Virgin was “headed towards profitability in the not-too-distant future”. Please! “

Begs the question then, is PS really the best man for the job going forward, given business metrics were actually getting worse?!

I wonder where T-Vasis is. Who'll forget his/her 4 Feb 20 post #14 here https://www.pprune.org/australia-new...ent-2021-a.htm

Virgin Australia isn't going anywhere. They're cashflow positive. They can service their debts. Cashflow is more important than profit. They're both important - but cashflow rules. They have free cash. So they're not going anywhere. They're holding back capital spend and 'clearing the decks'. They're making a number of strategic decisions that will reshape the carrier - and the carrier will be a different one within the next 12 months - but it will still be here none-the-less. It will be fine. The market can support both.

But... there may be less demand for pilots with any fleet adjustments they make.

EBIT is stil trending in the right direction...
S/he at least got this right:

[T]he carrier will be a different one within the next 12 months.

exfocx 26th Apr 2020 05:00


Originally Posted by Sunfish (Post 10762693)
These two bastards Perth and Adelaide, will trigger an avalanche of creditors refusing further supply. It’s over. The airports thought they could get in early and get preferential treatment. That was never going to happen.

Unless ScoMo comes to the party, it’s over. The fuel companies will be next. The Banks will be last.

As far as I know, no creditor can receive preferential treatment. In the past where Administrators believe a certain creditor has been treated as such prior to them being appointed they have taken the creditor to court and clawed the payment back.

B772 26th Apr 2020 05:58

If anyone would like to follow the fortunes of Virgin over the years I suggest you look at some threads I started and postings I made on others threads. If you do a search for my postings using Virgin or VA you will see I have been negative on many aspects for years. Covid-19 just accelerated the end result. One of the prospective purchasers is looking at an initial operation of just 14 x B737-800 towards the end of the year.

Virgin Atlantic is on the rocks. This morning Richard Branson put the airline on the market after failing to find financial support from Delta and 100 financial institutions. He has now accepted the U.K Government will not provide any funds. The airline may collapse before the end of the month. You will never believe who is assisting Branson with the process. It is Houlihan Lokey. The same mob who is helping the village people. Beware of companies with back of serviette business plans.


The post below is from a thread I started in 2016 titled "Should Virgin be Privatised." We know the Board did consider this in 2018.

"1a sound asleep


I am not confident JB has saved Virgin Australia. He certainly has dug a bigger hole for them to climb out of.

You mentioned a figure of $1B. It appears to me that Virgin Australia is only worth about half its book value if all debts and liabilities are carried forward.
With total assets of $1,586,000,000 and liabilities of $2,300,800,000 the balance sheet is a mess.

With long term debt being 68% of the companies capital and a debt/equity ratio of 256.6% some serious surgery needs to be performed before a serious suitor would be interested.

Whilst it is true Delta purchased the SQ 49% holding in Virgin Atlantic after SQ lost a total of approx. $1B on their foray. Virgin Atlantic is now a shell of its former self having dropped services to Sydney, Tokyo, Vancouver, Mumbai and Cape Town. In addition its UK 'Little Red' domestic airline has closed down.

And yes you are correct; Virgin America is on the chopping block. After a huge airfare sale recently to raise some cash it appears the major partners in the airline (similar to Virgin Australia ) have offered the airline for sale after less than 18 months as a public company. So far Alaska Airlines and Jet Blue have made offers for the airline with an announcement expected as early as next week.

A number of years ago anything to do with Richard Branson was regarded as a 'sideshow'; nothing appears to have changed".

Sunfish 26th Apr 2020 06:48

5 - 6 years tenure is about right for most senior management jobs, then it’s up or out.

[QUOTE] 10.4 Right to detain aircraft

For all users other than Major Users, if you do not pay the Aviation Charges or the Government Mandated Charges on time then we may detain your aircraft and hold your aircraft pending payment. [/QUOTE]

You can write all sorts of such crap into an agreement, but that doesn’t mean it’s legal or enforceable. Clayton Utz (clutz in the trade) did this all the time with the most fearful punishments,etc. None of it was remotely enforceable but it scared the peasants.

If suitably qualified Virgin staff removed the blockage and a qualified and briefed crew took off there is SFA Perth can do about it.

TBM-Legend 26th Apr 2020 07:04

[QUOTE=Sunfish;10763486]5 - 6 years tenure is about right for most senior management jobs, then it’s up or out.


10.4 Right to detain aircraft

For all users other than Major Users, if you do not pay the Aviation Charges or the Government Mandated Charges on time then we may detain your aircraft and hold your aircraft pending payment. [/QUOTE]

You can write all sorts of such crap into an agreement, but that doesn’t mean it’s legal or enforceable. Clayton Utz (clutz in the trade) did this all the time with the most fearful punishments,etc. None of it was remotely enforceable but it scared the peasants.

If suitably qualified Virgin staff removed the blockage and a qualified and briefed crew took off there is SFA Perth can do about it.

Sunfish QC now tells us that signed agreements are not enforceable! Mmmm that's interesting. Please give me the legal reason why and I'll run it by my QC niece for an opinion.

The next he'll tell us that Virgin must have signed "under duress"!

Remember the leaseholder of the airport is the landlord and controls the activities and issues approvals and invoices for the use thereof. Next time I need to get out of a an arrangement and you guarantee the outcome, I'll call you...

Paragraph377 26th Apr 2020 07:57


Originally Posted by B772 (Post 10763451)
If anyone would like to follow the fortunes of Virgin over the years I suggest you look at some threads I started and postings I made on others threads. If you do a search for my postings using Virgin or VA you will see I have been negative on many aspects for years. Covid-19 just accelerated the end result. One of the prospective purchasers is looking at an initial operation of just 14 x B737-800 towards the end of the year.

Virgin Atlantic is on the rocks. This morning Richard Branson put the airline on the market after failing to find financial support from Delta and 100 financial institutions. He has now accepted the U.K Government will not provide any funds. The airline may collapse before the end of the month. You will never believe who is assisting Branson with the process. It is Houlihan Lokey. The same mob who is helping the village people. Beware of companies with back of serviette business plans.


The post below is from a thread I started in 2016 titled "Should Virgin be Privatised." We know the Board did consider this in 2018.

"1a sound asleep


I am not confident JB has saved Virgin Australia. He certainly has dug a bigger hole for them to climb out of.

You mentioned a figure of $1B. It appears to me that Virgin Australia is only worth about half its book value if all debts and liabilities are carried forward.
With total assets of $1,586,000,000 and liabilities of $2,300,800,000 the balance sheet is a mess.

With long term debt being 68% of the companies capital and a debt/equity ratio of 256.6% some serious surgery needs to be performed before a serious suitor would be interested.

Whilst it is true Delta purchased the SQ 49% holding in Virgin Atlantic after SQ lost a total of approx. $1B on their foray. Virgin Atlantic is now a shell of its former self having dropped services to Sydney, Tokyo, Vancouver, Mumbai and Cape Town. In addition its UK 'Little Red' domestic airline has closed down.

And yes you are correct; Virgin America is on the chopping block. After a huge airfare sale recently to raise some cash it appears the major partners in the airline (similar to Virgin Australia ) have offered the airline for sale after less than 18 months as a public company. So far Alaska Airlines and Jet Blue have made offers for the airline with an announcement expected as early as next week.

A number of years ago anything to do with Richard Branson was regarded as a 'sideshow'; nothing appears to have changed".

And people tend to forget that ‘Richard the great’ has also had numerous businesses fail previously, and people got their fingers burned. The Branson way of marketing is finished. Nobody gives a flying f#ck about his ‘V’’ logo or Virgin Brand anymore. Everything ‘Branson’ is like a cheap porno film with cheesy characters and circus tricks. He has had his day. To align yourself with him is now liability. Today people are looking for value for
money and quality, at a fair price. Paying for business class fairs while having to still walk across a tarmac while it is pissing down with rain, to sit in the same width dinky seats with crap food is a ripoff. Farewell Richard you plonker, be gone and never be seen again.

Mach E Avelli 26th Apr 2020 08:03

So, Sunfish, are you saying that the next time I put my humble Toyota in for a service, I can drive it out without paying? Just snatch the keys from the desk and go for it?
All this time I thought the agreement with the service centre for them to do a job for an agreed price and me to pay that price was enforceable . How silly of me.

MickG0105 26th Apr 2020 08:09


Originally Posted by chookcooker (Post 10763372)
yes making people redundant is expensive. Who knew??


Originally Posted by chookcooker (Post 10763385)
750 staff at and average of 50,000 redundancy ( conservative. Probably more) is $37.5M

if the labour costs only increased by $6M in that same time then, well you do the maths

Okey doke, so as the author of that original comment in The Australian, let me address those points.

Yes redundancies can be expensive. In the FY20-H1 Interim Report preparation note 5(e) alludes to an average redundancy cost of around $38,000 per person. They had supposedly exited 140 of the targeted 750 as at 31 December so the restructure/redundancy cost should have been in the order of $5.3 million.

The problem is that labour costs rose by $42.4 million! Note that Group revenue only rose by $47.2 million. Under normal circumstances, the VA EBAs being what they are you would have expected to see labour costs up by around $17 million. That leaves about $20 million in increased labour costs that are essentially unexplained. It has all the hallmarks of p*## poor cost control. That is pretty well inexcusable for any business during normal operations leave alone one that had been losing money hand over fist.

More broadly you have to (or at least, should) ask, why such slow progress on the workforce restructure? PS had been in the business for five months when he announced the 2019 full year results - the business had lost $349.1 million in subdued but relatively benign conditions. If losing $1 million a day doesn't galvanise your attention and instil a sense of urgency, I don't know what's required.

PS announced the 750 'rightsizing' staff cut when he announced the full year results in late August last year. One would think that he might have had a developed and cogent plan for the cuts in his pocket at that time since he'd been there five months already. It looks very much like he did not because four months later less than 20 percent of the target number had been exited. Moreover, as at February this year (six months after the initial announcement) the business had only identified a further 280 roles to go by the end of June.

For a business that is haemorrhaging money day in, day out, that lack of urgency in executing what was their only big ticket cost cutting program is criminal.


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