Virgin Australia Financially Secure? [Now in Voluntary Administration]

[HS-TQE]

Tigerair Australia will cease flying for the foreseeable future. IMHO, I can't see TT resuming once the COVID-19 crisis subsides.

Would present an opportunity for PS (and every other airline CEO) to restructure their airline operations entirely.

https://www.asx.com.au/asxpdf/20200325/pdf/44gcdbt9y2pwh1.pdf

 

[jase05]

Sad day as I know plenty of the ADL staff and whilst there were some tears many have said that they will return if VA get through this. One thing that has always striked me is that even with all the financial doom and gloom around VA most of the staff still have been happy and upbeat and speak highly of the company. Hopefully when these difficult times have passed VA can still exist and these people can return to their jobs

 

[PaulllM]

Sad day as I know plenty of the ADL staff and whilst there were some tears many have said that they will return if VA get through this. One thing that has always striked me is that even with all the financial doom and gloom around VA most of the staff still have been happy and upbeat and speak highly of the company. Hopefully when these difficult times have passed VA can still exist and these people can return to their jobs

The staff make VA what it is and i hope head office remembers that when everything is over.

 

[pauly7]

Sad day as I know plenty of the ADL staff and whilst there were some tears many have said that they will return if VA get through this. One thing that has always striked me is that even with all the financial doom and gloom around VA most of the staff still have been happy and upbeat and speak highly of the company. Hopefully when these difficult times have passed VA can still exist and these people can return to their jobs

I’m sure (most) of them will. But I suspect the VA they will return to will be quite different....

 

[ja1]

The share price went up 15% (to 7.X cents) after the announcement on volume of about 8 million shares.

Did anyone buy a million or so when it got down to 5c ?

 

[ozstamps]

The share price went up 15% (to 7.X cents) after the announcement on volume of about 8 million shares.

Did anyone buy a million or so when it got down to 5c ?

Qantas went up a lot too. Compared to the bloodbath for both in recent weeks - so what?!

Means nothing in the big Picture see-saw of this crash. Europe markets flat or down as I type, and Dow Futures have headed south AGAIN at this early point.

This mess has not even started. Corona cases in the USA will EXPLODE next week. And despite whatever nonsense Trump Tweets, the Dow will stay splattered for weeks.

WORLD STOCK MARKETS TODAY | GLOBAL MARKET INDICES | INTERNATIONAL MARKETS | Markets Insider

Overview about all the stock market indices in the world. Current stock prices, charts and performance.

markets.businessinsider.com

 

[ja1]

Qantas went up a lot too. Compared to the bloodbath for both in recent weeks - so what?!

Means nothing in the big Picture see-saw of this crash. Europe markets flat or down as I type, and Dow Futures have gone south AGAIN at this early point.

This mess has not even started. Corona cases in the USA will EXPLODE next week. And despite what Trump Tweets, Dow will stay splattered for weeks.

Yes, I've been saying this on the way down..

But a few people were speculating they were going to buy on the way down so I was curious if any did!

And of course the bloodbath isn't relevant to the fact that

1) Some people might have made money on the way down if they could short sell
2) Some people might have day traded and made money on the bounces

Neither of which are relevant to me as I haven't done either but there's still money being moved around.

 

[amaroo]

I Think VA is just about stuffed. I also think that QF, really any airline that survives this event will be adjusting their loyalty schemes and will have no option but to savagely turn towards devaluation.

Big tip - stop buying points, the only point worth anything is the one that cost you nothing.

 

[hydrabyss]

I’m sure (most) of them will. But I suspect the VA they will return to will be quite different....

Will be interesting to see if they change direction and stick to domestic and short haul.

 

[ja1]

Will be interesting to see if they change direction and stick to domestic and short haul.

I'll be brave and call it and say 'no'. The business model will still focus on having an international component and how much better they can execute compared to the airlines left..

VA's model is really not that different to QAN - Domestic drives even more profit if you can feed international into it.. (i.e the increased profit from domestic should more than offset your international profit or loss.. as long as you don't let the latter get out of hand.. )

 

[juddles]

Will be interesting to see if they change direction and stick to domestic and short haul.

I am no aviation expert (who is? ), but I offer the following thoughts:

(1) Airlines have always been a hard business. Fickle things subject to huge cost and revenue changes - everything from fuel prices to sudden drops in demand.

(2) Australia has (usually) a very solid demand for domestic travel. And due to its specific small overall size, but in an affluent country, the constant duopoly has managed to keep decent returns from it until now.

(3) The international market is extremely impacted by tourism. And even more so from competition from airlines that have lower cost bases in areas such as staffing. So for any aussie airline, the international part is a hard part of an already hard game.

(4) Before the Coronavirus thing emerged, there was already a growing backlash by the Gretini of the world against flippant overseas air travel. Without the virus, this pressure would have increased year by year anyway. People were starting to actually feel guilty about going on overseas holidays....

(5) This Corona thing will be one of the most, if not the biggest, influences on the entire current population's life memories. As they will endure things that they never had before. It is not hard to join dots, so in a period where "we" were already starting to question so much travel, the reality that such travel was also the mechanism where a virus has managed to infect the whole planet almost instantaneously will be a lesson that is learned.

(6) In the impending year (not less) of lockdowns, loss of loved ones, chaotic scenes, etc we will all have much time to ponder a lot of facets of what was modern life. I really do not think that international travel will recover to 2019 levels for a decade, if ever. And I say that knowing that human attention spans are quite limited.

(7) through sheerly being forced to do so, many people and organizations will learn the art of doing business and socialising online.

In summary, and specifically to this thread about Virgin, I think that if they survive (and I think they will), they will slowly re-start as a domestic-oriented airline.

 

[HS-TQE]

Will be interesting to see if they change direction and stick to domestic and short haul.

Considering Short Haul (Regional and Short Haul Int'l) has been making them losses, I'd say no.

On the scenario that VA does survive, it would also depend on Delta's situation, I would guess they'd be a primarily domestic and only BNE/SYD-LAX, maybe BNE/SYD-AKL being their two only international destinations. If DL exits Australia post COVID, then VA being domestic only (maybe the 'Bali Bogan Bus' from BNE and SYD being their token international) will be likely the case.

 

[hydrabyss]

From what I read Air New Zealand will most likely reduce in size. Here is part of the article and was dated 25th.


Virgin is also looking to close its New Zealand cabin crew and pilot bases and its pilot base for low-cost arm Tigerair Australia in Melbourne, in a sign it would not return to business as usual when demand returns.

"We plan to return Tigerair Australia and Virgin Australia to the skies as soon as it is viable to do so. However, I am mindful that how we operate today may look different when we get to the other side of this crisis," Virgin Chief Executive Paul Scurrah said in a statement.

Air New Zealand Ltd, which plans to cut up to 30% of its staff, has also warned it could re-emerge as a smaller airline once the coronavirus situation subsides.

 

[Must...Fly!]

Up to 1,000 redundancies expected as a result of the stand down, which points to a leaner operation come the end of this (and thus an improved financial situation I would suppose)

Virgin to make 1000 redundancies, all Tigerair pilots to go

Virgin Australia will make all pilots at its budget arm Tigerair redundant as part of a round of layoffs that will see more than 1000 workers lose their jobs in the wake of the coronavirus pandemic.

www.theage.com.au

 

[HS-TQE]

VANZ crew base to close. Ditto with Tigerair's remaining MEL base.

Chances of a 'permanent' VA pull out of New Zealand had just increased, very tiny slim chance of retaining (at least) AKL services with Australian based crews.

Closing Tigerair's MEL base will very likely mean a highly likely permanent 'au revoir' to Tigerair Australia.

Coronavirus: Virgin Australia moves to close NZ operations

Virgin Australia employs about 200 pilots and 260 cabin crew here.

www.nzherald.co.nz

 

[dajop]

May well be that COVID-19 achieves what Christopher Luxon could not with his board seat...

 

[Must...Fly!]

Closing Tigerair's MEL base will very likely mean a highly likely permanent 'au revoir' to Tigerair Australia.

Coronavirus: Virgin Australia moves to close NZ operations

Virgin Australia employs about 200 pilots and 260 cabin crew here.

www.nzherald.co.nz

Not necessarily, VA pilots could fly the planes (one of the benefits of the fleet transition to B738s I suppose...

 

[AustraliaPoochie]

90% if pax services suspended.
But freight still has to be moved.
And emergency staff like our pollies too, unless they suspend parliament or go online for Parliament.
So VA will still make money, smaller of course.

 

[HS-TQE]

Related: VA shareholder news.

Singapore Airlines halts trading pending announcement

SINGAPORE — Singapore Airlines Ltd on Thursday went into a rare trading halt pending an announcement, days after it said it would ground almost its entire…

business.financialpost.com

My guess is that SQ is preparing for the inevitable government funded bailout. SQ will likely survive as a smaller carrier than they were before the COVID-19 crisis.

 

[jakeseven7]

Related: VA shareholder news.

Singapore Airlines halts trading pending announcement

SINGAPORE — Singapore Airlines Ltd on Thursday went into a rare trading halt pending an announcement, days after it said it would ground almost its entire…

business.financialpost.com

My guess is that SQ is preparing for the inevitable government funded bailout. SQ will likely survive as a smaller carrier than they were before the COVID-19 crisis.

I think all airlines will fall into two buckets
- Cease to exist
- Survive but much smaller than before