Virgin Australia Financially Secure? [Now in Voluntary Administration]

[jakeseven7]

Not much news as Deloittes rake through the wreckage of VA1 and the vultures circle sizing it up....

Rex has come out swinging, not sure what their intentions are.... to scare buyers off? Slow the process down?

REX chairman claims Virgin Australia is headed for ‘another disaster’ - Australian Aviation

Regional Express executive chairman Lim Kim Hai has claimed Virgin Australia is headed for yet another financial disaster under the current administrator.

australianaviation.com.au

 

[Melburnian1]

Not much news as Deloittes rake through the wreckage of VA1 and the vultures circle sizing it up....

Rex has come out swinging, not sure what their intentions are.... to scare buyers off? Slow the process down?

REX chairman claims Virgin Australia is headed for ‘another disaster’ - Australian Aviation

Regional Express executive chairman Lim Kim Hai has claimed Virgin Australia is headed for yet another financial disaster under the current administrator.

australianaviation.com.au

Has Rex been well run?

Hmmm - it hasn't renewed its aircraft, and one of the aviators on AFF suggests it won't be able to afford to.

And it's received a fair whack (in the tens of millions - from the Fed Govt so easy for it to criticise. Of course, many of us don't expect VA to survive.

 

[jakeseven7]

Heavy criticism and accusations of misleading VA1 staff...

Mass redundancies will follow sale of Virgin Australia, analyst warns

www.google.com.au

 

[p--and--t]

Heavy criticism and accusations of misleading VA1 staff...

Mass redundancies will follow sale of Virgin Australia, analyst warns

www.google.com.au

I think a fair number of his conclusions was obvious to those who gave it some thought.

All airlines are going to be a fair bit smaller and some/many won't exist in 2021. (See another thread who's next to fold)

To rise again in the same format with those debt levels in the new paradigm is plain fantasy.

VA might have had a reasonable chance to maintain a similar but scaled back format before Feb 2020 under PS, but after covid no chance.

YMMV

Another view

Virgin Australia was never going to last

If its foreign owners thought it had a future they would have kicked in money.

www.google.com.au

 

[travel_bug]

I think a fair number of his conclusions was obvious to those who gave it some thought.

All airlines are going to be a fair bit smaller and some/many won't exist in 2021. (See another thread who's next to fold)

To rise again in the same format with those debt levels in the new paradigm is plain fantasy.

VA might have had a reasonable chance to maintain a similar but scaled back format before Feb 2020 under PS, but after covid no chance.

YMMV

Another view

Virgin Australia was never going to last

If its foreign owners thought it had a future they would have kicked in money.

www.google.com.au

Agree and additional to the above, with JobKeeper available, the cost of wages payable would have dropped and minimised the need for any lay-offs in administration. We can all make our own conclusions on what then happens once that subsidy disappears for the new owners.

I’m dreading many job keeper supported jobs turning into redundancies across multiple industries post Covid. I think it’ll be a while for many Australians who have been economically affected to regain confidence in their spending.

 

[Melburnian1]

Agree and additional to the above, with JobKeeper available, the cost of wages payable would have dropped and minimised the need for any lay-offs in administration. We can all make our own conclusions on what then happens once that subsidy disappears for the new owners...

Federal Govt is implying that JobKeeper and increased JobSeeker may last less than six months if circumstances allow.

Given the huge cost to the Budget, this seems sensible, but unfortunately for VA staff and others, it'll bring things to a head more quickly.

 

[antycbr]

Federal Govt is implying that JobKeeper and increased JobSeeker may last less than six months if circumstances allow.

Given the huge cost to the Budget, this seems sensible, but unfortunately for VA staff and others, it'll bring things to a head more quickly.

I would think that aviation would need sector support if they end Jobkeeper early as a significant proportion of both airlines staff are engaged in the international business which is still going to be closed by government intervention for the second half of this year.

 

[Standby]

Today’s AFR has a story indicating REX will start trunk routes this year Investing 200m on limited fleet of “cheap jets” post CV-19
Time will tell if just being disruptive to VA Sale or serious

 

[tomlee1986]

Today’s AFR has a story indicating REX will start trunk routes this year Investing 200m on limited fleet of “cheap jets” post CV-19
Time will tell if just being disruptive to VA Sale or serious

The trunk routes are already very crowded.. is it wise to increase competition there???

 

[muppet]

The trunk routes are already very crowded.. is it wise to increase competition there???

Can’t see REX attracting many pax when there are better run competitors.

You fly REX when that’s all there is

The article explains that 85% of REX’s routes have no competition.

 

[tomlee1986]

Can’t see REX attracting many pax when there are better run competitors.

You fly REX when that’s all there is

The article explains that 85% of REX’s routes have no competition.

I agree... I think it is not a great idea to increase syd-mel or syd-bne frequency with Rex when there are other services like QF or JQ or if VA survives

 

[Standby]

Rex now in trading halt pending announcement

 

[muppet]

Rex now in trading halt pending announcement

Lol. They probably got in trouble from the ASX with the Chairman mouthing off about raising capital but failed to inform the market.

 

[Must...Fly!]

REX can barely turn a profit on monopoly government supported markets.

If Alliance had announced something like this, I'd have probably paid attention.

Weren't REX screaming about being bankrupt within days about 6 weeks ago?

 

[HS-TQE]

Have to agree that Alliance are probably more better suited and equipped at starting the process of upgrading their AOC to mainline jets if they had willing backers.

 

[HS-TQE]

India's counterpart which also trades under the name 'IndiGo' is understood to have been mulling to throw in a last minute for VAH.

Like their American namesakes, India's IndiGo also wants to revert VA 2.0 to its LCC roots, initially concentrating as a domestic-only LCC.

Indian airline wants to take Virgin Australia back to low-cost roots

Low-cost Indian juggernaut IndiGo is running the numbers on a Virgin Australia take-over.

www.executivetraveller.com

 

[dajop]

REX can barely turn a profit on monopoly government supported markets.

If Alliance had announced something like this, I'd have probably paid attention.

Weren't REX screaming about being bankrupt within days about 6 weeks ago?

Rex, for last couple of years has returned a profit (after tax) of ~5.5% of revenue - very similar to QF, and priort to 2020, have not made a loss in their 17 year history. In terms of the airline industry, which is littered with corpses, that's not too bad, They did indicate in earlier releases they have no debt and were screaming about being bankrupt within 6 months (not days) , but did mention "many of the smaller regional carriers have only weeks of reserves left (rapidly changing to days with the situation deteriorating exponentially) "

 

[docjames]

Fascinating development if Rex take the leap to use jets on trunk routes.

 

[RooFlyer]

Today’s AFR has a story indicating REX will start trunk routes this year Investing 200m on limited fleet of “cheap jets” post CV-19

On the radio this morning it was framed in terms of 'might', 'would like to', 'thinking about' ...

 

[Melburnian1]

From 'The Age' online:

...The administrators are seeking permission to issue conditional credits to customers that had booked flights cancelled due to the pandemic which could be honoured by an acquirer, Strawbridge said.

"Potential buyers may be motivated to extend these conditional credits as part of any restructuring or recapitalisation of the Virgin Companies' business for the purposes of maintaining and enhancing the customer goodwill associated with the Virgin Companies," he said.

He added the airline is seeing a rise in credit card charge-backs from customers seeking refunds. That is a potential drain on cash it holds in accounts.

-------------

Again, I can't see how VA will find a buyer.

If you haven't applied for a refund on future flights, my humble suggestion is to contact VA - as credit card issuers and banks require you to do - and then, after a short time if no joy with VA, get in touch with your bank and request a chargeback.