Virgin Australia Financially Secure? [Now in Voluntary Administration]

[bulldog88]

I don't think the Market cap is indicative of anything.. Many companies have gone bust despite having a big market cap. It's also unclear how much of the price decline is being driven by hedge funds short-selling and scaring people into thinking the worst (which may or may not eventuate).

Personally I think the Government only cares about having enough flights available so people (and government itself) can get around. Most likely this can be achieved by Qantas and some of the regional carriers.

I expect the appropriate people in Govt are being told the real impact of Covid, and this will determine whether VA gets a taxpayer lifeline.

 

[amaroo]

Government can’t save everything, forget about the “Noah principal” one of everything will be the safety net.

 

[pauly7]

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[justinbrett]

Rex have indicated they have six months of reserves if the situation doesn't deteriorate any further. They could step in and abandon regional Australia and fly their "run on the smell of an oily rag, well and truly depreciated" lawn mowers back and forth between MEL and SYD and serve the current level of demand quite profitably

The country is well connected enough by fast ground transport, and economically air travel is far too important in the long run for the government to let both trunk carriers fail. Different to, say Europe, where some journeys could be undertaken by rail without taking too much longer than plane.

There aren't many regional-only airlines in the world. Regional airlines don't make money - unless they are a subsidiary of a major carrier. Rex has a place as a QantasLink competitor, backed by VA. Rex in its own right has no hope.

 

[Must...Fly!]

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And a further article

'Constant shock syndrome': How the crisis plays out in Qantas and Virgin's situation rooms

"We are doing everything we can to ensure we're the last man standing", Qantas CEO Alan Joyce declared in what has become a battle of the balance sheets.

www.brisbanetimes.com.au

 

[clarkkent]

A UK-style stimulus with the govt paying 80% of wages across the board would go a long way wouldn't it?

 

[amaroo]

A UK-style stimulus with the govt paying 80% of wages across the board would go a long way wouldn't it?

Would be better to kill expenses (mortgages, rent, etc) and provide the people that need it a subsistence package .... without expenses you don't need much to survive.

 

[ozstamps]

according to Scurrah, Virgin has been "encouraged by recent support from the government this week and comments that they stand ready to continue supporting the industry as a whole".

He wouldn't respond directly to suggestions Virgin has asked the government for $1.5 billion in assistance.

Well my reading of the Prime Minister's comment elsewhere here, was he did not do say any such thing about supporting the domestic industry - as a WHOLE. Qantas is ALWAYS going to be the First Born Child of aviation here. Because it is!

Virgin was limping and near lame at end 2019 - due to poor management, and this virus killed them off. Survival of the fittest. Law of the Jungle.

A company who lost $88 million for the six months to December (pre any Viruses) has ALREADY been given 2 or 3 times that money this week by the Feds. And Scurrah wants TEN times that now it seems.

If Scrurrah is asking for $1.5 BILLION more in handouts, he is living on the wrong planet. He has not even trimmed staff yet - the first prudent action in such a situation, as Qantas has certainly done, (66% of staff furloughed) so the current rivers of red are partly due to his total inaction.

It seems logical wages are around $A15 million a WEEK at Virgin across 10,000 staffers. A CEO cannot hold out the Begging Bowl to the Feds, before addressing such obvious and basic issues.

The prime Minister is now (rightfully) focused on trying to save the entire country from Bankruptcy right now, not saving Scurrah and Virgin.

Yes all our Virgin Elite cards are extended for a year. They will soon be about as useful as Dick Smith Gift Cards. Both now just pretty bits of worthless plastic.

Virgin in my view might last a month. Possibly two. REMOTE chance to June 30. Feds already tossed them a couple $100 million in fee waivers etc in recent days, which has not touched the sides.

10,000 staff drawing wages, (say $50 million a month) with only a small % of normal flights flying to bring in $$s, and plane leases in newly super costly $US, ticking away daily, is a recipe for bankruptcy FAST, for a business that was not great fiscally even in the good times. Indeed Virgin limped to an $A88.6 million loss for the six months ended December 31. BEFORE this massive mess unfolded.

 

[bulldog88]

Assuming we are all in quasi-quarantine for 12-18 months until there is a vaccine (it seems Australia and the US are heading this way) , maybe VA should simply shutdown all operations on March 31st, stand down all but essential staff, and wait it out. Whether they (the current VA shareholders) should get taxpayer dollars to wait it out is the question.

 

[Must...Fly!]

Just because it hasn't hit the headlines, does not mean some staff have been stood down @ozstamps

They have been, and leave without pay is being incorporated in to rosters as well.

 

[coyote25]

Well I pulled the trigger and transferred points to SIA which I was planning to do for a redemption booking to be made next year but for travel in 2022 (surely 2022 will be fine to travel!!). This planned transfer was to top up current SIA points for this future trip.

Only thing is I’m a few 1,000s short which would have been fixed in a few months but pulled the trigger now so not to risk losing velocity points or having them devalued.

I also lost status and points when Ansett went down (they were my first FF program, I never got to use the points which I had big plans for). I had family working for Ansett and knew a lot of employees so the loss of status, paid Lounge membership (on hold at the time) and points wasn’t really a big concern compared to problems of the ex employees.

However this time I don’t want to get caught out.

Will VA survive? I just don’t know.

Will the separate Velocity program survive? Again unclear.

Will SIA survive? I’m as confident as can be in this situation. Definitely more likely then VA.

I wonder when or if Velocity will stop redemptions and transfers? They like getting in points as that is incoming cash and ‘pausing’ or limiting redemptions and transfers would surely limited people putting in points (think Flybuys). But there must be a point when outgoing cash becomes a problem especially if this is a 12+ month event.

Still while I’ve taken this preemptive action I still remember the job losses at Ansett and knowing so many people impacted at the time I’m very much hoping for a good outcome not just for VA but many businesses and employees facing a tough and uncertain future.

We could end up with a lost generation of workers in worst case which I sincerely hope doesn’t occurred to the overall economy.

Be safe everyone. Happy travels whenever they be one possible again.

 

[ozstamps]

Just because it hasn't hit the headlines, does not mean some staff have been stood down @ozstamps

They have been, and leave without pay is being incorporated in to rosters as well.

66% of Virgin global staff stood down?

Do tell - you apparently know far more about this, than the very well informed Brisbane, and indeed National Media, and the Australian Stockmarket. You really must replace AAP and Reuters, with your on the pulse knowledge.

Well run public companies ALWAYS keep the market informed of such material things such as large staff furloughs, that hugely impact running costs and overhead. Indeed they are REQUIRED by law to do just that. Qantas did.

I hate to see good staff being lost over something that has nothing to do with them. My local coffee shop is like Qantas - 6 staff down to two - a 66% reduction. But he will survive that way, as it just had to happen.

The market has spoken on Virgin - 20c down to 5c a share is the death knell when you were already losing money in the Wine And Roses boom and prosperity era of the last year.

 

[hydrabyss]

according to Scurrah, Virgin has been "encouraged by recent support from the government this week and comments that they stand ready to continue supporting the industry as a whole".

He wouldn't respond directly to suggestions Virgin has asked the government for $1.5 billion in assistance.

Well my reading of Scomo's comment elsewhere here, was he did not do say any such thing about supporting the domestic industry - as a WHOLE. Qantas is ALWAYS going to be the First Born Child of aviation here. Because it is!

Virgin was limping and near lame at end 2019 - due to poor management, and this virus killed them off. Survival of the fittest. Law of the Jungle.

A company who lost $88 million for the six months to December (pre any Viruses) has ALREADY been given 2 or 3 times that money this week by the Feds. And Scurrah wants TEN times that now it seems.

If Scrurrah is asking for $1.5 BILLION more in handouts, he is living on the wrong planet. He has not even trimmed staff yet - the first prudent action in such a situation, as Qantas has certainly done, (66% of staff furloughed) so the current rivers of red are partly due to his total inaction.

It seems logical wages are around $A15 million a WEEK at Virgin across 10,000 staffers. A CEO cannot hold out the Begging Bowl to the Feds, before addressing such obvious and basic issues.

Scomo is now (rightfully) focused on trying to save the entire country from Bankruptcy right now, not saving Scurrah and Virgin.

Yes all our Virgin Elite cards are extended for a year. They will soon be about as useful as Dick Smith Gift Cards. Both now just pretty bits of worthless plastic.

I don't know what virgin have done regarding staff reductions but moving employees from virgin to unemployment still costs the government money. Qantas have added 20 000 people to possible unemployment benefits which will cost the government money.

 

[Xizor]

Paranoia getting higher every day. Just transferred half of our very modest 300K Velocity balance (took years to reach) over to Krisflyer to spread the risk. More worried about our QFF points though, those have been been a 5yr+ slog!

NFI whats going to happen with our VA Syd to Perth return trip in 2 weeks time that we booked via the ANZ Travel adventures card ages ago. Does not let us modify it online.

 

[Must...Fly!]

Why would they need to stand down two-thirds of their workforce? Many VA functions are outsourced to third party ground handling companies so there is much less fat to trim during reduced operations relative to Qantas. Indeed flights themselves are run by Alliance for VA in some markets, so 66% is likely way over the top of what's required.

Additionally VA has less of a fleet mix and it has already been stated to the market that 777s & A330s will be grounded. The F100s will still fly, the B737s will still fly, there will be a reduced workload for those crews but they will not necessarily need to be made redundant.

Just because it hasn't made the media does not make it untrue.

Look at the list of suspended routes, thanks to @jase05 for the thread he/she started.

Virgin Australia will temporarily suspend the following services between 01 April and 14 June 2020:

• Adelaide – Canberra
• Adelaide – Gold Coast
• Brisbane – Hobart
• Brisbane – Launceston
• Canberra – Gold Coast
• Melbourne – Cairns
• Melbourne – Darwin
• Melbourne – Hamilton Island
• Melbourne – Kalgoorlie
• Melbourne – Launceston
• Perth – Hobart
• Sydney – Ayers Rock
• Sydney – Cairns
• Sydney – Darwin
• Sydney – Hamilton Island
• Sydney – Hobart
• Sydney – Launceston
• Sydney – Townsville

Tigerair Australia will temporarily suspend the following services between 01 April and 30 June 2020:

• Brisbane – Cairns
• Brisbane – Canberra
• Melbourne – Perth
• Melbourne – Hobart

As a result of the scheduled removal of six Airbus A320 aircraft in the period, Tigerair Australia will also bring forward previously announced network changes which include the exit of the following domestic routes. The following routes will now cease to operate on 01 April 2020:

• Melbourne – Coffs Harbour
• Sydney – Coffs Harbour
• Adelaide – Sydney
• Sydney – Cairns
• Hobart – Gold Coast

As a result of the reduction in demand and a further network review, Tigerair Australia will also cease flying between Sydney and Perth from 01 April 2020.

Does that indicate to you a company that is not making hard decisions?

Do you really think that a heavily reduced schedule requires the same number of staff?

Do you really think that Virgin Australia are not making tough workforce decisions?

Do you really think management are living in a vacuum after grounding the entire widebody fleet?

Qantas decision is theirs to make and they obviously felt it necessary for the survival of the company. But it's not like the cost to Qantas as a company is zero. Staff will be paid annual leave and long service leave while not working. Staff can take an advance of up to 4 weeks annual leave during the reduced flying period. That doesn't come for free.

 

[jase05]

66% of Virgin global staff stood down?

Do tell - you apparently know far more about this, than the very well informed Brisbane, and indeed National Media, and the Australian Stockmarket. You really must replace AAP and Reuters, with your on the pulse knowledge.

Well run public companies ALWAYS keep the market informed of such material things such as large staff furloughs, that hugely impact running costs and overhead. Indeed they are REQUIRED by law to do just that. Qantas did.

I hate to see good staff being lost over something that has nothing to do with them. My local coffee shop is like Qantas - 6 staff down to two - a 66% reduction. But he will survive that way, as it just had to happen.

The market has spoken on Virgin - 20c down to 5c a share is the death knell when you were already losing money in the Wine And Roses boom and prosperity era of the last year.

PS has indicated that some staff have been asked to take leave without pay and that he has wrote letters to VA partners to see if any had room to take on any of his affected staff. He also hasn’t ruled out anymore staff cuts or job losses. They have cut a fair whack of their domestic routes and brought forward Tiger route suspensions so he is trying to make the tough decisions. You seem to know all the answers, perhaps you should give PS a call and give him some pointers

 

[ozstamps]

Why would they need to stand down two-thirds of their workforce?

1. As they are flying only a tiny % of pax as they were a year back, and have also grounded a large chunk of their fleet.

2. As Qantas did exactly that - and they are no fools - which is WHY they have survived for 100 years

3. If you are handing out the begging bowl this week to the Feds for $A1.5 BILLION more, after the vast sum they were given this week already, to keep a heavy loss making airline limping along for a little while more, with a massive bloated staff level to what is actually needed, you will get nowhere in Canberra. So they are doomed already.



Virgin have over 10,000 staff, from all official reports prior to this virus, with ZERO announcement to the stock market they have trimmed that number - except according to the Super Spies in here who know more than the ASX and investors and Brisbane media do! (Or so they repeatedly claim.)

virgin australia employee numbers - Google Search

www.google.com

 

[Must...Fly!]

1. As they are flying only a tiny % of pax as they were a year back, and have also grounded a large chunk of their fleet.

2. As Qantas did exactly that - and they are no fools - which is WHY they have survived for 100 years

3. If you hand out the begging bowl to the Feds for $A1.5 BILLION more, after the vast sum they were given this week already, to keep a heavy loss making airline limping along for a little while, with a massive bloated staff level to what is needed, you will get nowhere in Canberra. So they are doomed already.



Virgin have over 10,000 staff, from all official reports prior to this virus, with ZERO announcement to the stock market they have trimmed that number - except according to the Super Spies in here who know more than the ASX and investors and Brisbane media do! (Or so they repeatedly claim.)

virgin australia employee numbers - Google Search

www.google.com

This is tiresome. You haven't responded to the various points and facts I outlined in my post.

You're just continuing your hysterical posting about this very important issue and you are doing yourself a disservice by not completely engaging with the points that others raise.

 

[ozstamps]

The points you raise are unsubstantiated and unsourced and unproven personal VIEWS of yours. Not one shred of evidence offered here by you of your allegations. Totally unfounded gossip I do not respond to - sorry. FACTS are better to address.

They are not in the Queensland media which is all over this mess, and who clearly have heavy insider feed from Virgin Towers, and the ASX has NOT been informed of your alleged heavy staff cuts, as is required by law. IF they have occurred.

This thread is headed -

Virgin Australia Financially Secure?

And the answer to most is crystal clear it appears. Scurrah apparently begging for $A1.5 BILLION this week from Feds seems to prove that point.

All members are of course fully entitled to stand on the deck of the Titanic playing "Nearer My God To Thee" .. but the ship will still sink - in MY view.

Nothing any of us can do about things. I personally transferred out every point, as I lost a million in Ansett.

As my Dad always said - "everyone makes mistakes in life - but only fools REPEAT doing it. "

Others have done exactly the same, and posted thus here, others half transferred out to hedge their bets, and others are optimists and have left all miles in Velocity.

All fine - we all make our choices in life.


Best of luck - I hope in a year your intact 250,000 Velocity points gets you a ticket to Europe or wherever. (But more likely a shiny new Sunbeam toaster!)

We all hate to see ANY person lose their job over something outside their control. My coffee shop owner or a Virgin FA or ramp worker - this virus is not of their making.

I've been a top level Frequent Flyer for 50 years. Ten Million miler. Top level Continental, KLM, Northwest, Lufthansa, United, Ansett, Air France, Delta, Virgin etc. I've seen endless busts and crashes and adjustments occur around me, and after a while you (mostly) recognise the warning signs.

I've been a member here for 17 years - 10 years more than most posting above. Seen lots of train wrecks approaching from a distance.

 

[pblackie]

1. As they are flying only a tiny % of pax as they were a year back, and have also grounded a large chunk of their fleet.

2. As Qantas did exactly that - and they are no fools - which is WHY they have survived for 100 years

3. If you are handing out the begging bowl this week to the Feds for $A1.5 BILLION more, after the vast sum they were given this week already, to keep a heavy loss making airline limping along for a little while more, with a massive bloated staff level to what is actually needed, you will get nowhere in Canberra. So they are doomed already.



Virgin have over 10,000 staff, from all official reports prior to this virus, with ZERO announcement to the stock market they have trimmed that number - except according to the Super Spies in here who know more than the ASX and investors and Brisbane media do! (Or so they repeatedly claim.)

virgin australia employee numbers - Google Search

www.google.com

My understanding is that Qantas staff have been stood down and asked to take leave, long service leave and unpaid leave.

Qantas to ground international flights, stand down two-thirds of staff

The move comes as the airline industry is under immense pressure amid sweeping coronavirus travel restrictions. But CEO Alan Joyce says Qantas will be able to weather the crisis.

www.smh.com.au

If you look at this link the second from last point under key points includes that leave initiatives (i.e. staff taking leave, unpaid leave and long service leave) are part of the cost saving initiatives. Virgin Australia Group update on COVID-19 response