Virgin Australia Financially Secure? [Now in Voluntary Administration]

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I’m no lawyer. I think ScoMo is doing a reasonable job, but could Virgin (or other businesses) sue the government for damages? After all, this has been caused by the government moving the goal posts (Even if for valid reasons)

@Dr Ralph

Interesting...!

Think about it like this then, if the governments (state) hadn’t shut the borders etc and just let people continue to travel etc in the middle of a pandemic - would people actually be travelling in a sardine can 737 of either airline?

Doubt it. I certainly wouldn’t be. I suspect a majority of people would not be travelling. Anywhere.

We would be in exactly the same place as here I suspect!
 
Interesting...!

Think about it like this then, if the governments (state) hadn’t shut the borders etc and just let people continue to travel etc in the middle of a pandemic - would people actually be travelling in a sardine can 737 of either airline?

Doubt it. I certainly wouldn’t be. I suspect a majority of people would not be travelling. Anywhere.

We would be in exactly the same place as here I suspect!

Your reply while perfectly sensible seems to rely on common sense. Whereas the original question came from a legal perspective so.. common sense should have been right out the window :)

To answer the question while thinking along legal lines, VA (and QAN and Rex and whoever) has the ability to sue for whatever reason they can articulate. However it would up to the court system to allow a suit (it has to have some merit) and an answer would rely on going through an actual court process.

And I'm assuming the government would argue their right under a number of legal precedents that aviation companies have no ability to sue when governments are carrying out their duties..

i.e the government is not moving any goal posts without you previously know said goal post moving was always possible. You're participating in a market the government regulates and effectively are given a licence to do so.

It would be madness to publicly think about any kind of lawsuit on this basis as the government's position is that any airline doesn't get to make the rules on the national interest relating to hundreds, thousands or millions of lives being at stake - and VA certainly won't be the one saying otherwise!
 
On the 730 report tonight, Leigh Sales asked the PM about VA...gave a typical ScoMo non reply but did say the sector as a whole will be assisted, if assistance is given, not one individual company (how much pressure / influence did AJ put on him?!). And also said Va should exhaust all possible sources of income 1st, and if I heard correctly, including staff super funds !!
 
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On the 730 report tonight, Leigh Sales asked the PM about VA...gave a typical ScoMo non reply but did say the sector as a whole will be assisted, if assistance is given, not one individual company (how much pressure / influence did AJ put on him?!). And also said Va should exhaust all possible sources of income 1st, and if I heard correctly, including staff super funds !!

Yes, he specifically suggested the Transport Workers Union (TWU) super fund should step in. Which I suspect was a little disingenuous and probably intended as a barb at the union/Labor - I took it to essentially be a "if you think this is so important, why don't you put your money where your mouth is" type statement. But maybe I'm just jaded and he meant it as a possible solution ...
 
I’m no lawyer. I think ScoMo is doing a reasonable job, but could Virgin (or other businesses) sue the government for damages? After all, this has been caused by the government moving the goal posts (Even if for valid reasons)

@Dr Ralph
Not my specific area of practice, but I would think it extremely unlikely.
 
On the 730 report tonight, Leigh Sales asked the PM about VA...gave a typical ScoMo non reply but did say the sector as a whole will be assisted, if assistance is given, not one individual company (how much pressure / influence did AJ put on him?!). And also said Va should exhaust all possible sources of income 1st, and if I heard correctly, including staff super funds !!
I thought the point the PM was making was SuperFunds,including TWU industry super ( large union of VA staff) could invest,along with banks,it’s not all on the govt.I’d prefer my super invested in something likely to return regular dividends
 
I thought the point the PM was making was SuperFunds,including TWU industry super ( large union of VA staff) could invest,along with banks,it’s not all on the govt.Id prefer

Just pondering - what does it say if the industries own super fund doesn't invest in its own members industry to save jobs at a time of crisis for its members?
 
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Just pondering - what does it say if the industries own super fund doesn't invest in its own members industry to save jobs at a time of crisis for its members?
Many of these members would likely be taking $10,000 from their super accounts as they are directly impacted. I'd suggest the fund is in no state to be investing in VA, even if it wanted to.
 
Many of these members would likely be taking $10,000 from their super accounts as they are directly impacted. I'd suggest the fund is in no state to be investing in VA, even if it wanted to.

True. Also the trust deed may predetermine where funds may or may not be invested, at least on a % of risk basis.
 
Just pondering - what does it say if the industries own super fund doesn't invest in its own members industry to save jobs at a time of crisis for its members?

Any investment must meet the sole purpose test, saving members’ jobs rather than investing for their retirement would attract penalties and no doubt result in their licenses being cancelled.
 
Surely this talk of lawsuits is academic. If you were claiming damages you'd need to prove that the actions the Government took were directly responsible. You'd need to convince a judge that you'd have solid forward bookings and business as usual if it were not for the restrictions. How about the other countries who have enforced travel restrictions, making international travel next to impossible - would the airline name them in the suit too, or would they claim that people would travel regardless of the fact they'd be turned back or quarantined? What did yields look like on the lead up to the travel bans?

You'd already have a nice long list of defendants as the state bans were state mandated. You'd also have the outbound bans, inbound bans internationally, as well as travel advice to consider as restrictions that governments imposed to effectively shut down the airline's operations.

I know the answer to the question of travel yields as I flew several flights just before the bans were instituted. I flew in an almost empty A320 east to west in the US on the 18th, 6 days before the lockdown. That was not a profitable flight. My flights would not have been unique at that time. I suggest the primary reason airlines didn't put up a fight against restrictions was that they were hemorrhaging cash and it bought them relaxed rules on slot maintenance, compensation and flight operation for booked flights that almost certainly saved them money, not cost them money.
 
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Any investment must meet the sole purpose test, saving members’ jobs rather than investing for their retirement would attract penalties and no doubt result in their licenses being cancelled.
Anyone remember Enron? Most of the employees super was also invested in Enron Shares. It didn’t end well.
 
This reminds me of the TV ad on industry super funds "yes one of those"...
 
Things are moving quickly
According to latest reporting in the Australian,
"The scheme would shut Tiger airlines, the international division, and draw up new secured debt deals with unsecured creditors and equity holders getting zero."
"Right now there are backroom talks to determine if Virgin (Australia) exists next week."

Unclear what that means for Velocity members who (presumably) are unsecured creditors..

And Emirates is running Covid blood tests for departing pax at Dubai airport...
 
Unclear what that means for Velocity members who (presumably) are unsecured creditors..

If Velocity members were left with nothing a good way to guarantee failure of a new venture. Way to really p#ss off your target customer base. The gold and platinum members would almost be the airlines biggest asset (vs starting a new airline afresh).

But that doesn’t mean it won’t happen.
 
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