Virgin Australia Financials 2019/20

[melb78]

ok lets say if VA was going to be privatised who would do it i do not see SQ doing it nor Delta

 

[HS-TQE]

ok lets say if VA was going to be privatised who would do it i do not see SQ doing it nor Delta

None.

The convoluted/divisive ownership structure is widely expected to remain for the foreseeable future. As this has been compounded by the fact that there has been no credible investors on the horizon for HNA's stake, which they have been trying to sell for a while now.

 

[cove]

Probably the best solution to recapitalize the company would be by using a dilutive share price for a new issue.

. Then the one or two majors would have a far bigger stake percentage wise without triggering a takeover.

 

[HS-TQE]

Probably the best solution to recapitalize the company would be by using a dilutive share price for a new issue.

. Then the one or two majors would have a far bigger stake percentage wise without triggering a takeover.

If I recall correctly, new Issues needs a majority vote from the shareholders. This is NOT likely to happen anytime soon.

On another note, on dates past late September (after Luxon steps down in Mid September), VA is now allowing interline tickets onto NZ domestic flights, and vice-versa for NZ allowing VA options alongside the QF codeshares.

So it's good to see the incoming new CEO of NZ and the new CEO of VA getting along to thaw the hostility between NZ and VA at least.

 

[TheInsider]

So it's good to see the incoming new CEO of NZ and the new CEO of VA getting along to thaw the hostility between NZ and VA at least.

Interline bookings are very standard across all airlines doubt it has anything to do with the CEO's.

 

[jakeseven7]

If I recall correctly, new Issues needs a majority vote from the shareholders. This is NOT likely to happen anytime soon.

On another note, on dates past late September (after Luxon steps down in Mid September), VA is now allowing interline tickets onto NZ domestic flights, and vice-versa for NZ allowing VA options alongside the QF codeshares.

So it's good to see the incoming new CEO of NZ and the new CEO of VA getting along to thaw the hostility between NZ and VA at least.

Unfortunately doesn't mean much, QF still had interline with NZ when they were mortal enemies

 

[moa999]

new Issues needs a majority vote from the shareholders. This is NOT likely to happen anytime soon.

Anything over 15% generally needs shareholder approval.
But you also want the support of the major shareholders to take up their rights. VAHs problem is you've got a bunch of shareholders who seem unwilling or unable to put in more $s.

 

[Bagpuss]

I haven’t seen this referenced in the thread but Virgin do have a small ... ok big issue with their B777’s. Amazing this article is 10 years old Small cargo door restricts Virgin
This obviously has some ramifications, they can’t get huge Cargo loads in/out of the USA and hampered by their most expensive aircraft not being dispensable. I wouldn’t be surprised if a lot of the huge write downs for Virgin Australia International (for many years) are around the deemed value of these aircraft.
The items they do more openly acknowledge:
An Australian company with US bonds isn’t a great thing and this is weighing them down. This is going to be a focus area which it does seem they have been trying to work on for some time.
Fuel (one word says it all) and does have huge ramifications. This is where ensuring capacity is right to reduce fuel as opposed to running flights which aren’t full. Though in my experience, from Perth most flights are pretty full.
Virgin Australia has its challenges but isn’t the most challenged (Foxtel is in a world of trouble and Virgin is a golden child in comparison atm).

With this release they have really publicly aired the dirty laundry once a for all and stated the obvious which they used to hide from. If you look at the profit and loss they even highlight and reference a number of lines such as the money on leases for parked ATR’s and E fleet.

I’m pretty confident it can be turned around and everyone is currently on notice. Time will tell, with ok cash reserves they do have a fair bit of time.

 

[BudgetFly]

Reading all of this has made me **** myself a little. Is it a good idea to convert all my points over to Krisflyer including the ~280k flybuys points? What are others who have collected a large amount of points doing? Krisflyer would probably be a safe bet considering the strength of the airline however they do expire. Maybe I'm just being a little too nervous? Would suck to wake up one morning to find that Velocity has been massively devalued or wiped out completely in an effort to further cut costs.

I sent my Velocity points to Krisflyer but that's where I get most of my reward flights anyways...

 

[pauly7]

The Kiwis are worried despite their track record of dragging Aussie airlines under

I suspect VA will hang on the main routes just kill off the marginals.

Why Kiwi travellers should care about wounded Virgin Australia

A long overdue assessment of Virgin Australia operations will be finished later this year.

www.nzherald.co.nz

 

[HS-TQE]

The Kiwis are worried despite their track record of dragging Aussie airlines under

I suspect VA will hang on the main routes just kill off the marginals.

Why Kiwi travellers should care about wounded Virgin Australia

A long overdue assessment of Virgin Australia operations will be finished later this year.

www.nzherald.co.nz

I suspect PS may scale NZ back to the "big 3"; e.g. East Coast-AKL (at reduced frequencies - twice or 3 daily). BNE/MEL-CHC and BNE-WLG (reduced to daily). Not sure if SYD-WLG survives or whether they'll send them via BNE or the SQ codeshare MEL-WLG

 

[jakeseven7]

I haven’t seen this referenced in the thread but Virgin do have a small ... ok big issue with their B777’s. Amazing this article is 10 years old Small cargo door restricts Virgin
This obviously has some ramifications, they can’t get huge Cargo loads in/out of the USA and hampered by their most expensive aircraft not being dispensable. I wouldn’t be surprised if a lot of the huge write downs for Virgin Australia International (for many years) are around the deemed value of these aircraft.
The items they do more openly acknowledge:
An Australian company with US bonds isn’t a great thing and this is weighing them down. This is going to be a focus area which it does seem they have been trying to work on for some time.
Fuel (one word says it all) and does have huge ramifications. This is where ensuring capacity is right to reduce fuel as opposed to running flights which aren’t full. Though in my experience, from Perth most flights are pretty full.
Virgin Australia has its challenges but isn’t the most challenged (Foxtel is in a world of trouble and Virgin is a golden child in comparison atm).

With this release they have really publicly aired the dirty laundry once a for all and stated the obvious which they used to hide from. If you look at the profit and loss they even highlight and reference a number of lines such as the money on leases for parked ATR’s and E fleet.

I’m pretty confident it can be turned around and everyone is currently on notice. Time will tell, with ok cash reserves they do have a fair bit of time.

The challenge is that with their current level of negative financial performance, yes if you multiply that out by years of losses v cash in the bank, they are ok for the time being at least.

BUT - any unforeseen shocks (an economic downturn, regional geopolitics, fuel, sudden increase in competitive pressures) may put more of a pressure on that cash balance.

Second to this, they are going to have to do some transforming of the business, whatever that may be, may be to write off assets, dispose of assets, reconfig, pay people off etc. This (even if it is a good investment) also costs money.,,,

So hence the urgency of binning 750 HQ staff, they have to move now and quite aggressively.

 

[Saab34]

Are these HQ jobs redundancy’s effective immediately or are they gradual over the next few years?

They might need to move the HQ to Sydney to source high profile talent. Get the whole lot under one roof like Woolworths at Bella Vista setup. Velocity is in Sydney city, they have a corporate office out of circular quay, Tiger office in Melbourne, Mainline hq in Brisbane, Perth offices?

 

[jakeseven7]

VA back on the front page of the AFR today :

'UNWINDING THE BORGHETTI EXPERIMENT AT VIRGIN' is the headline...

I honestly wonder how JB is these days with pretty much one of the biggest corporate strategy fails in Australia on his watch.... Its gotta hurt....

Some questions about whether PS has 'overreacted' or not, or just weaponising a situation to make huge cuts. It is noted that AJ is not as bearish on the headwinds facing the industry as PS. Interesting read.

Unwinding the Borghetti experiment at Virgin

Paul Scurrah won't say it, but everyone else is: he's effectively reversing the strategy so carefully crafted over nine years by his predecessor, John Borghetti.

www.afr.com

 

[jakeseven7]

Are these HQ jobs redundancy’s effective immediately or are they gradual over the next few years?

They might need to move the HQ to Sydney to source high profile talent. Get the whole lot under one roof like Woolworths at Bella Vista setup. Velocity is in Sydney city, they have a corporate office out of circular quay, Tiger office in Melbourne, Mainline hq in Brisbane, Perth offices?

They moved marketing to Sydney as they had zero talent in Brisbane (its a very poor third to Melbourne and Sydney)... maybe you are right, more should move and keep the churn and burn in Brisbane (keep the government subsidies) and put the brain in Sydney or Melbourne where talent is better....

 

[Saab34]

Sydney City would be ideal for HQ. IT Talent lies in Sydney, Virgin needs a lot of IT talent as the entire end to end systems are poor. Sydney City is a plus as they can lure global talent, and pull from other big corporates such as WOW/WES etc..

 

[eastwest101]

Sydney City would be ideal for HQ. IT Talent lies in Sydney, Virgin needs a lot of IT talent as the entire end to end systems are poor. Sydney City is a plus as they can lure global talent, and pull from other big corporates such as WOW/WES etc..

Marketing can be the first thing to be cut in a cosy duopoly, marketing is a luxury that a company under financial stress don't need.

IT isn't a luxury, just has to work to keep bookings coming in the door, both QF and VA outsource their IT work to India so having more than a few IT execs swanning around the Brisbane or Sydney office is another luxury that VA probably cant afford right now.

One thing for sure is, the cutbacks of 750 staff at head office in VA, will be interesting to see what effects this has on the operation or not. And if not, makes you wonder what they were all doing...If they all were integral to the operation then we should see unpaid staff on strike, planes grounded, bills not being paid and regulatory attention start to increase fairly quickly.

 

[victorp]

They moved marketing to Sydney as they had zero talent in Brisbane (its a very poor third to Melbourne and Sydney)... maybe you are right, more should move and keep the churn and burn in Brisbane (keep the government subsidies) and put the brain in Sydney or Melbourne where talent is better....

That wasn’t the reason they moved at all. The narrow mindedness of a few on here in their insular Sydney world is a bit sad. Get out more.

 

[Bagpuss]

Are these HQ jobs redundancy’s effective immediately or are they gradual over the next few years?

They might need to move the HQ to Sydney to source high profile talent. Get the whole lot under one roof like Woolworths at Bella Vista setup. Velocity is in Sydney city, they have a corporate office out of circular quay, Tiger office in Melbourne, Mainline hq in Brisbane, Perth offices?

VARA are based in Perth at 111 St George's Terrace. I expect that to be fully shut down.

 

[Bagpuss]

Sydney City would be ideal for HQ. IT Talent lies in Sydney, Virgin needs a lot of IT talent as the entire end to end systems are poor. Sydney City is a plus as they can lure global talent, and pull from other big corporates such as WOW/WES etc..

Pretty sure Qantas IT is based in Sydney and they have their challenges too.