VARA to be off-loaded?
 

Rumours circulating today that Bain Capital intend to offload VARA as part of a further review of the Group's operations. Alliance have been offered 'first dibs' but have walked away from the proposal / offer given they have just acquired the 14 E-Jets.

Another Bain broken promise to staff?

Then what? Gift an entire market to QF??

I thought VARA was profitable? Its more the contracts that are worth anything

If Alliance arnt interested, who would be - Skippers - unlikely, Network - unlikely, Cobham - maybe?

Rex......?

Apparently part of the broader business review, Ms Jayne wants to concentrate on establishing the 'Hybrid' VA Mainline and do away with the associated costs of running VARA as a side gig. Bain are obviously pushing the thumbscrews to save even more money so they can get ready for a quick 'flip' on VA.

Exactly, contracts are important to offload VARA as a going concern to an interested buyer. As for profitability that is still a mixed argument.

As for REX buying it, would they even want to take on another project?

Obviously there are some medium to long term risks with that business (fleet renewal, contracts up and down). As well as the management distraction which is probably the key reason behind any offload.

I don’t think many will disagree, we all know Virgin needs to wind the clock back 15 years and go back to the roots of a NG operation only.

Might not be all bad news for those working in the west. If it’s a money maker with long term contracts someone will bite.

It would be interesting to see what the thinking is about on carriage. I suspect the whole FIFO model is changing in WA with the parochial Labor Government pushing for the entire workforce to be domiciled there. This obviously drives economic activity for WA but in reality how long will that last?? People might be happy to do it for a year or two, but if your entire extended family is on the east coast how practical is it for your family to live in WA as opposed to just doing some sort of FIFO from the east coast?

Whats this got to do with VARA? Whether the FIFO worker lives in perth or syd/mel, the roster (contract) wouldn't change. The same number of people are required for the shift cycle, they are all mobilizing through PER regardless.

Profitable for now, there in lies the issues as detailed above. The business model doesn't align with the strategy, maintaining something which needs a 5yr fleet replacement plan along with assoc. costs. Why keep it if you can spin it off for a bit of cash.... and we all know what the 5 year strategy is....

When will any of this be officially announced? Will the staff still have a right to return to the mothership?

I guess that's a question for Ms Jayne and the Exec. Team. She has been somewhat backward in coming forward with the truth so don't expect an answer straight away.

Well everything. If it all goes to a Perth centric model then you have no real competitive advantage and have to scrap against every other contractor vying for the business. If however say 30% of the contract then flowed onto interstate flights that's a different proposition for a national airline. Charter Operators can't compete against a national airline as they can't offer the connections.

Huh.. "interstate connections" has minimal input into FIFO contracts. Its costs flying PER - Mine Site/ aircraft size -capability / frequency.

The VA Group Fleet Renewal is planned for 2023 but it seems somewhat 'Mainline Centric'

That's wishful thinking.

Also wishful thinking, but I would have thought those mainline staff thrown overboard from the mothership would also get a chance at getting back onboard.

Not surprising.

How VARA can survive with the legacy agreements it has I don’t know. Sorry, but why the pilots don’t take a hard look at the Alliance and Network terms and wake up is beyond me.

In the new world, If you’re not competitive you’re unemployed.

So sad.

You mean like why mainline QF 73 guys are worried about network doing the WA flying? Too bad for them eh? think you’ll find VARA T&Cs sit right smack between Network and alliance after the renegotiated EBA during 2020, check FWA 👍🏻

Fits in the VA decision strategy though, sell off the only thing flying and making money throughout this whole mess

How can the crew return to something that they were never a part of? Most crew joined Skywest and became VARA when the business was purchased by VA.

The VARA people from the ATR who were previously made redundant and have a deed which outlines a return will come back eventually, if they want too, within the deed time frame. If the current VARA op is flogged off, then no, they will not be able to return via a deed, but would have to apply like any other ‘joe or joette’ off the street. That’s how I read it. Could be wrong though. It all depends on the fine print, like anything. But why would they want to come back????

Clause 35.4 – Removal of GDOJ Integration => VARA seniority to stay, VARA jobs for VARA Pilots

They way I read it is they did away with the right of return when they decided to remove GDOJ.
But I’m speculating here.
The whole thing is a mess in regards to right of return at VAA. They signed a deed for right of return for Tiger and VAINZ pilots for up to 7 years. The deed for VAI wide pilots has been agreed to but not signed. Unsure of how legally binding that one is.
Plus it hasn’t been explained properly how it all works in regards to getting a position when it comes up. I.e a captaincy comes up in Sydney, is it the FO that gets it who is endorsed and current or the wide body captain who was made redundant. If it’s fleet balancing I think it goes to FO, if it’s a “new” position it goes to the Wide-body.
I’m sure there some one out there in the know who could explain it but from what I know it’s an absolute clusterf**k.

There are 2 GDOJ lists. One is specific to VARA, i.e. if or when a VARA position becomes available then the VARA list is used. That list prioritizes crew who joined the Virgin Group through VARA (or Skywest as it was prior to VA ownership). For example someone who joined VARA and then moved to an ATR position in VA and were thus made redundant last year, will have priority for a vacant VARA position over crew who have been in VA only.

sorry spider, Yes I did check, before I posted.

Not trying to upset anyone, I have a lot of history with Skywest and want to see it survive and cant see that happening with the current legacy agreement (even with the haircuts)

By “competitive” you mean engaging in a race to the bottom? Let’s see who can earn the least? Why is aviation one of the few sectors with diminishing pay prospects? That’s what’s sad!

I get it, but are you seriously suggesting its better to tell the company to get stuffed and go broke?

There is such as thing as living to fight another day.

No Airline in Australia has said to have failed because of Flight crew costs. They form a relatively small percentage of total costs (<10%). Far far more important are things like fuel and lease costs. Qantas (covid issues aside) are surviving just fine with their 'legacy' agreements.

If you built a house 20 years ago, and you try to build one today, you will notice that:

1. The price of the architect has significantly increased;
2. The price of the surveyor has significantly increased;
3. The price of the earth works has significantly increased;
4. The price of the concreter has significantly increased;
5. The price of the brick layer has significantly increased;
6. The price of the plumber has significantly increased;
7. The price of the carpenter has significantly increased;
8. The price of the electrician has significantly increased;
9. The price of the plasterer has significantly increased;
10. The price of the cabinetmaker has significantly increased;
11. The price of the painter has significantly increased;
12. The price of the landscaper has significantly increased;

And they all probably earn significantly more than a VARA pilot.

But in an aviation business, Arthur D thinks the pilots should be cheaper.

This nonsense needs to end now.

Don’t take any notice of AD, like many people on here they’re just looking for a reaction. Typical nobody who wants to be somebody on an anonymous forum.

Don't feed the trolls.

If wishing to see an airline I care about survive makes me a troll, then guilty as charged.

For some time now I have watched as Alliance and Network grow in WA whilst VARA has shrunk.

Logic would dictate that If it was such a wonderful business then either Virgin would keep it or it would already have been sold off.

But by all means throw rocks at me and stick your head in the sand.

Without a doubt neither the wages nor lease costs are varas issue the issue is the ineptitude of the current management and not just at the vara level the mainline mob are lost in a cutting mode when as per alliance and network it is time to grow, we could work for free and this mob will screw it up.....

Sadly, I don't think AD is far off the mark, you don't need to be a rocket scientist to see what's likely to happen, nor do I see there's anything the staff can do about it or in any way responsible. I'll be surprised if it it's still operational in any meaningful way beyond 2023

Not at all - if the company can’t pay their crew appropriately I’d suggest they have bugger issues - crew costs are single digit percentages of total cost - pilots aren’t the problem.

Don’t fall for the BS narrative the company want you to believe. It’s not the pilot groups problem to solve.

I don’t have skin in the game, but it irks me to see other pilots fighting to be cheaper “to save the company from going broke.”

Yes and the buggery only goes one way, not even a reach around.

Oops!

Would you believe I was using a Kiwi accent? :)

I would. I read it and thought 'must be a Kiwi, eh?'

Glad some of us have kept a sense of humour through all of this!!
:)