Virgin Australia Financially Secure? [Now in Voluntary Administration]

[travel_bug]

You'd bl**dy well hope they got a subsidy for Honiara with a typical load factor in the 30s...

Remember that VA has a very complex corporate structure to allow the "notionally" 51% Australian owned VA(I) to operate internationally given that VA Holdings is 90+% foreign. I'd expect all of that to go to save cash. It's corporate overhead.

Seems like they do (if I understand this Determination correctly) though it dropped considerably in the last couple of years.

[2019] IASC 105

PDF version

www.iasc.gov.au

 

[jakeseven7]

The Age is reporting that, “as Virgin Australia scrambles to stay intact and afloat, more than a dozen private equity funds are hovering in the hope the airline will call it a day so they can pick up the carcass on the cheap.“

Our resident AFF consultant who I suspect is working close to action did tell us this was already happening a few weeks ago!

I almost think VA has more chance of surviving and prospering if it goes into administration, rather than just another owner coming in...

Most of the bundled Chinese tour groups start at Cairns then travel down the coast to Brisbane, Gold Coast, Sydney, Melbourne or across to New Zealand. If they buy VA, they would have greater access to the AU and NZ domestic routes.

Oh great for us Queenslanders who have to travel the same routes for work, lovely lol! Jammed in with hundreds of tour pack tourists.

The coughpy thing with most of those tour groups is that they are completely tighta@& - negotiate bottom dollar on everything, don’t spend much in Hospitality outside their programmed deals, they are very low margin. Ask anyone who works in Tourism.

I’d be worried about what a majority Chinese ownership would do to VA’s service levels which were already being savaged under PS’s cost cutting regime.

 

[Mr Pumblechook]

I’d be worried about what a majority Chinese ownership would do to VA’s service levels which were already being savaged under PS’s cost cutting regime.

You'll look back fondly on the J chicken sandwich days

 

[jakeseven7]

You'll look back fondly on the J chicken sandwich days

LMAO!!! Call of the day.
Just threw up in my mouth thinking of them

 

[jase05]

You'll look back fondly on the J chicken sandwich days

As opposed to party pies?

 

[jase05]

I’d be worried about what a majority Chinese ownership would do to VA’s service levels which were already being savaged under PS’s cost cutting regime.

Chinese airlines get a bit of a bad rap but they are greatly improved and some are actually excellent. Unfortunately the 3 airlines listed as possibly taking over doesn’t include MF though

 

[antycbr]

Saving VA was one of the top stories across multiple news networks. In the absence of any other major news the pressure on the government must be increasing.

 

[hydrabyss]

Virgin Atlantic to resubmit UK bailout. Maybe once Virgin Australia has exhausted all other avenues the Government hopefully may do the same.
https://www.ft.com/content/e2636703-acec-49ad-97b8-b944e032db1f

Link may not work but here is one part

Virgin Atlantic on Friday had told the FT it had this week appointed the investment bank Houlihan Lokey to assist the process of securing private sector funding.

 

[jakeseven7]

Saving VA was one of the top stories across multiple news networks. In the absence of any other major news the pressure on the government must be increasing.

Doubt it, public sentiment seems really mixed / leaning to against a specific bailout from all my readings.

The story just isn’t that compelling and doesn’t tug enough heart strings I’m afraid.

Government won’t care about a slow news weekend and a few more media stories. They let them go to the wall first then decide.

I actually feel more positive that VA won’t need the government to spend tax payers dollars on them, I think they will find the money themselves.

 

[antycbr]

Doubt it, public sentiment seems really mixed / leaning to against a specific bailout from all my readings.

The story just isn’t that compelling and doesn’t tug enough heart strings I’m afraid.

Government won’t care about a slow news weekend and a few more media stories. They let them go to the wall first then decide.

I actually feel more positive that VA won’t need the government to spend tax payers dollars on them, I think they will find the money themselves.

If it’s Chinese money will the government object?

 

[Cubiscus]

They can't propose a market solution (to a government lockdown) then moan when its not the right solution. Or shouldn't.

 

[jakeseven7]

If it’s Chinese money will the government object?

Highly doubt it.

VA is already a foreign owned airline.

Who will really care if it goes from 40% (China’s current % holding) -> 80/90% of one country? No one.

The government will just be glad they don’t have to spend tax payers money. And so will we.

Hand them over to the Chinese / any country / any company that is willing to sink the cash in and save taxpayers having to is my vote.

 

[oz_mark]

Doubt it, public sentiment seems really mixed / leaning to against a specific bailout from all my readings.

The story just isn’t that compelling and doesn’t tug enough heart strings I’m afraid.

Government won’t care about a slow news weekend and a few more media stories. They let them go to the wall first then decide.

I actually feel more positive that VA won’t need the government to spend tax payers dollars on them, I think they will find the money themselves.

My thought too. I think they will get through, but whether or not that is through an administration process or not remains to be seen. I suspect there are a few waiting for administration which will deal with much of the debt problem.

But it would be nice to find some arrangement that avoids that.

Even if the media is quiet, I am sure there are rulers being run over the books as we speak.

 

[Isochronous]

Our resident AFF consultant who I suspect is working close to action did tell us this was already happening a few weeks ago!

I almost think VA has more chance of surviving and prospering if it goes into administration, rather than just another owner coming in...



Oh great for us Queenslanders who have to travel the same routes for work, lovely lol! Jammed in with hundreds of tour pack tourists.

The coughpy thing with most of those tour groups is that they are completely tighta@& - negotiate bottom dollar on everything, don’t spend much in Hospitality outside their programmed deals, they are very low margin. Ask anyone who works in Tourism.

I’d be worried about what a majority Chinese ownership would do to VA’s service levels which were already being savaged under PS’s cost cutting regime.

Exactly - we need to be focusing on premium tourism not this low-rent garbage. Only people who make money out of it are the travel agents who book them and the bus companies who drive them around.

Orkney has the same problems with the big cruise ships who call there every July - they overwhelm what is a pretty tiny island by sheer numbers but apart form the bus charters they don't spend in restaurants and don't really shop, they just visit the free museums and archaeological/nature attractions.

 

[jase05]

With talk about the 3 Chinese carriers having interest in VA does anyone see any other airlines coming out of left field and entering the mix?
And no I don’t mean the usual suspects such as SQ and DL
Unlikely I know but would NH for example look to enter the fray or even QR?
QF has been trying to block QR from more flights to Australia for awhile and are also cosy with their main ME rivals in EK. QR might see the purchase of VA having some benefits although pushing hard into Australia might be on the back burner for some time in the current climate.
Still a lot to play out IMO and wouldn’t be surprised if there are a few twists remaining in this saga

 

[TheInsider]

QF has been trying to block QR from more flights to Australia for awhile and are also cosy with their main ME rivals in EK. QR might see the purchase of VA having some benefits although pushing hard into Australia might be on the back burner for some time in the current climate.
Still a lot to play out IMO and wouldn’t be surprised if there are a few twists remaining in this saga

QR?? I'm assuming this is pure conjecture?

 

[jase05]

QR?? I'm assuming this is pure conjecture?

I’m bored at work and was just think out aloud.
Zero chance of it happening but I can dream
I was just trying to see if anyone had any guesses on if there may be someone interested who hasn’t been named or spoken about yet. Only so many SQ or DL fairytales you can read about

 

[TheInsider]

I’m bored at work and was just think out aloud.
Zero chance of it happening but I can dream
I was just trying to see if anyone had any guesses on if there may be someone interested who hasn’t been named or spoken about yet. Only so many SQ or DL fairytales you can read about

I doubt it will be another airline that buys them out, it will be the usual private equity firm where they will buyt it for a few cents to the dollar, hold it for a few years and then sell it off making millions in profit.

 

[Bagpuss]

QR?? I'm assuming this is pure conjecture?

They have previously ruled it as as Virgin Australia is a bad business.
IIf they did, it would only be part of their feud with QF. Though issues with OneWorld.

 

[AustraliaPoochie]

QR is in OW, so its very unlikely that they will get involved.
It might also make their relationship with QF worst, not withstanding what our colleague mentioned above about QF tightening access of routes by QR to Aust.
I would say, dare say, that the 3 Chinese airlines would be it, plus maybe some rich China based individual.
CKI (Cheung Keong Infrastructure) bought into ETSA when it was split up in the 1990s, he is now making a killing, financially speaking with his SAPN being involved in electricity in Aust.
Darwin Ports (operational side) also now long term leased by China organisations.
According to Daily Mail (UK) CZ China Southern already owns a small airport way outside Perth city.