[QUOTE][ run a choko vine over the sh#t house/QUOTE]

What a wonderful turn of phrase? And so descriptive. :D

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you would not let her run a choko vine over the sh#t house

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The old girls favourite saying :D

Astounding, isn't it? And she's the current chair at IAG also.

You've got to love these snippets from last night:

So, between the Chair and the CEO there's a recognition that the business is over-leveraged, with a weak balance sheet. So far, so good.

What do they do? Let's add the best part of a billion in debt!

Scurrah is right, he inherited a business with a weak balance sheet - just shy of $6 billion in debts and liabilities and just over $600 million in net equity. So his cunning plan, obviously endorsed by his choice of CFO in Keith Neate, and signed off by the Chair and Board, is to issue over $A 900 million in bonds at 8 percent. It's a three-for
- trash the balance sheet completely by driving net equity underwater to the tune of a few hundred million,
- drive leveraging back through the roof (one thing that Borghetti had been managing was getting their leverage position down into the mid-4s), and
- just so the P&L doesn't feel left out we'll smash that with an extra $70-odd million per annum in finance costs.

It's mind boggling that anyone would pay these people to make financial decisions.

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JB says he remained another 3 years at "the board request".

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I'm pretty sure JB said he stayed on at the Chairpersons request.

Thanks Mick,

At least someone’s awake.

From the transcript:
My bolding.

What board members ever get held accountable? If you’re looking for someone to be court marshaled and hung, I think you’ll be waiting a long time. Sad reality of the position. All care and no responsibility.

I just watched this from the other side of the world. What a moron that woman chairperson was. No wonder the place went tits up with oversight from a clown like her. She should go back to Mars or whatever planet she came from.
Scurrah did impress me though, Cant say the same for smiling Sharp and his cronies in Canberra. Rex and jets=delusional.

OK, question I would have is: was EB requesting JB extend and simply passing on the collective decision/wishes of the board OR was EB running around making arbitrary decisions and all the other board member just shrugged their shoulders - apparently for a number of years - and said "yeah, whatever."

You mean like the 'oversight' Alan Joyce has had to suffer?

I, too, liked the choko vine analogy.....

I don’t know but I think JB might have sold PS a lemon with Velocity. I think JB sold it for half what PS paid to get it back but it may have been a case of the then owners of Velocity said to PS if you don’t buy it back for this price we will dump it and there goes your loyalty scheme and we all know how much airline CEOs love their loyalty schemes. No doubt the staff were told how good an idea it was to sell it...and how good it was to buy it back at twice the price!

Scurrah knows little about aviation and numbers and was weak in making rapid changes required. He's a union captive. Mrs Scurrah was Chief of Staff of former Labor Premier Anna Bligh and now heads a consultancy to the Qld Govt on how to deal with millions of dollars per year in hiring consultants....join the dots...[oh and Qld will kick the can via QIC etc etc for $200M of payro;; tax, stamp duty and other relief plus a bit of cash with a small percentage.

AFR April 02 2016

Several weeks ago Air New Zealand's chief executive, Christopher Luxon, stood up in a private meeting and called for Virgin boss John Borghetti to resign. He has no such plans.It is not unusual for big personalities to clash in the high-octane world of aviation, but things have been particularly tense among Virgin Australia's shareholders lately.

Things came to a head several weeks ago when Air New Zealand's headstrong chief executive, Christopher Luxon, stood up in a private meeting and called for Virgin boss John Borghetti to resign.

Virgin chairman Elizabeth Bryan, who is said to run a tight ship, was having none of it and is believed to have stared down Luxon, who this week quit the board and has put his airline's 26 per cent stake in Virgin up for sale.

But the motivation for Air NZ ending its five-year relationship with Australia's second-largest airline runs far deeper than a personality clash between two airline chiefs.

Air NZ has been disappointed with Virgin's financial performance for some time, and was becoming increasingly concerned it would be asked to stump up more cash when Borghetti completes a capital review in two to three months.'

CAPA April 2016 - 'In Feb-2015, Mr Luxon noted that Virgin’s product investments were over and the end of the capacity war meant that now “is the time to get profitable” – a comment that was met with a reminder that criticism should stay within the boardroom.'
NZ CEO, Christopher Luxon, has been the only shareholder to state publicly that Virgin "needs to get profitable", and he was reported to have called for VAH CEO John Borghetti to resign before his own departure from the board. Chairman Elizabeth Bryan equally, reportedly rejected the call.'

From memory it was something to do with growing Velocity rapidly. How that works who knows, but most people know that's where airlines make their money now days so it seemed like a ludicrous idea to sell in the first place.

JB was on a selling spree to try free up cash for his mass spending. He sold infrastructure like the Brisbane hangar to the airport and then leased it back. Sold all the aircraft spares then leased them back. Can't remember what else went out the door but he certainly was making decisions that had a lot of people scratching their heads.

Well at least you said he knows little about aviation that's better than JB knowing nothing about aviation.

I was waiting for someone to dig this up, and his paid membership with the ALP too.

I don't know but she was trying to walk both sides of the street in the 4 Corners interview.

My understanding is that the grand plan for Velocity was to spin it off in a public float. That is the only play that makes any financial sense given the way the deal was structured.

There's no way that anyone could justify paying $700 million in 2019 for the 35 percent stake that was sold for $335 million in 2014 just based on its contribution to the business. If you look at Velocity's revenue and EBIT contributions over the years neither more than doubled over those five years (unfortunately they didn't start breaking Velocity out as a sector in its own right till 2015 so there's a bit of a fudge factor in there).

Just back of the napkin, that $700 million re-acquisition deal would have been NPV negative to the tune of about $200 million in 2024 when the bonds matured. And that's using 10 percent annual EBIT growth and a corresponding rate of growth in the book value of the business. That deal shouldn't have gotten past a year one business analyst let alone a CFO and a Board unless there was another play involved.

To that end, the float might have made financial sense but you've got to be very, very concerned when an airline's big play is the IPO of an affiliated non-airline business. It's a spiv's play; definitely not core airline business.

More, or at least equally, to the point, it was at best a medium term play - something that they might have looked to run in 2022/23. The pesky thing about the medium term is that you have to traverse the short term to get there. And that one deal, with the associated $900 million bonds issue at 8 percent, wrecked the business's short term position by driving their net equity into the red. It didn't just leave them vulnerable to a 'black swan event' (and I'd argue that the coronavirus isn't strictly a black swan event, but that's a discussion for another day), a gnat's fart worth of headwind was going to cause them worries given the business's abject inability to manage its cost base.

Blackout:

You are utterly wrong about what Boards do. I had a few like you try to get around me and front the Board when I was a CEO because they thought their pet schemes would be approved if only they could explain them to the Board in person.

‘’Board discussions in a company with a good chairman are often, uncomfortable, aggressive, abrasive, forthright and cover subjects that would make the average employee consider suicide. It is not a job for the faint of heart. The financial penalties for illegality are huge and the public consequences of getting it wrong...well, you can see EB’s reputation now.

That second paragraph if it wasn’t so sad would be one of the...I don’t even know how to describe it.
To say a board member has a ‘tough’ role with ‘abrasive’ conversations in an air conditioned boardroom is so bad that an ‘average’ employee would consider suicide is just ridiculous. If a board member ever gets something wrong they leave with a golden handshake and a well done and move onto their other 10 roles. The VA board never had control over the company yet they all walk away scot free of any penalty and probably a payout there some where too. How many Australian board members have ever been convicted of their incompetence? If they ever got a fine for it, no doubt it is covered by their company paid for insurance.

There was a famous Australian cricketer who had also been a fighter pilot in WW2. He was asked by a journalist what the pressure was like of being a cricket player for Australia. His reply was along along the lines of ‘that is not pressure, pressure is having a Messerschmitt on your arse’.
Sitting in a comfy chair in a boardroom chucking handbags at each other whilst sipping Perrier water contemplating what Michelin Star restaurant you will be having your 3 course meal from and should you have the red or white with it is not tough. Indeed as we have seen countless times it is the ultimate in a blameless culture that pilots would be envious of.

edit to give proper credit for the quote
Keith Miller AM MBE (RAAF WWII pilot) ‘Pressure...I will tell you what pressure is. Pressure is a Messerschmitt up your arse. Playing cricket is not’.