Virgin Australia Financially Secure? [Now in Voluntary Administration]

[The Flying Brick]

Which particular customer touch points have you noticed?

Actually, I always found VA to be extremely customer friendly - every flight - every time.

Could not say the same for QF - sometimes very good, often average, and sometimes downright surly.

This seems to be literally the opposite of what was covered in the 7:30 report..

Her view was that they (the board) wasn't happy with where JB was going with VA and made the decision to change - which in effect meant they replaced him.

However she pointed out that doing this took time (presumably for both VA and JB to come to grips with an exit strategy).

My read would be that this simply didn't happen quick enough for PS to have enough time to adjust strategy where it might have had a more material effect on VA's financial well being. Paying down $5B in debt was never going to happen quickly - especially for an airline that made only one statutory profit in the last.. 10 years ?

In any case, even with a plan and making some headway, in the timeframe available he might have added weeks or maybe a few months before administration/receivership/liquidation.. i.e not enough to have saved the airline.

Even if VA had been debt free, they would still have a business... with no business.

So I guess I'm taking away that there are two sides to this story from the board POV ?

But isn’t it so easy to forget that JB had said 2 years previously that it was time for him to move on, but the Board requested he stay whilst they eventually settled on a replacement?

 

[jakeseven7]

4 corners pretty straightforward nothing earth shattering - although the VA v Rex stoush was very interesting to watch... spent quite a bit of time on that!

- Alan spoke very well as per normal. Made a strong case for industry wide support. Though I’m sure QFi is being lined up for specific assistance at some point (and VAi if it exists under Bain by default)

- The former chair of VA1 came across abysmally. Really dismal defence of their role in the collapse. Wouldn’t be hiring her again... She admitted they didn’t have the money to deliver on their strategy, realised it too late. Did call JB out as a divisive figure which was interesting. Said he did not built a good business, but did build a good airline.

- PS admitted they didn’t have enough public support to pressure for specific government support that wasn’t sector specific

- JQ launch was the pivotal moment in history that marked the end of VA, forcing them to change tack and pursue JB’s ultimately deadly game changer strategy

- BG surprisingly came out and criticised the JB game changer strategy as well. He looked awfully nervous!

- JT said the whole VA world knew the strategy was wrong years before the collapse, was told by front line staff the second he started

- PS led turnaround was not fast enough and the balance sheet too weak. Foreign owners all declined to inject any money and saw no value in their equity anymore anyway (said the VA chair)

- Both PS and AJ called out the structure of the government assistance as being problematic with the current border restrictions hampering flying - no flying no access to the variable support $. Both agreed needs to be looked at

- ALOT of finger pointing from VA towards Rex and their government connections which was interesting. Rex said because of VA failing they see an opportunity to move in with their announcement of developing inter capital city services. PS was dirty towards Rex! This part was very interesting to watch

- Bain has planned for scaled back VA2 closer to Jetstar and between Jetstar and Qantas. Unions put Bain on notice that if they scale back on employees they will resist. Will reduce costs as much as possible

- ACCC watching the sector closely. Wonder if they will look at what Rex is up to with their money and the allegations VA made about their connections to the Nationals..

- VA ultimately poorly managed. Commentators agreed if the new VA2 is better managed - it can be stable and successful.

 

[antycbr]

I must compliment the 4 Corners team for a well put together, factual and detailed report that covered the three main participants well.

Good access to all of the main players as well (except JB by his choice).

 

[jakeseven7]

I must compliment the 4 Corners team for a well put together, factual and detailed report that covered the three main participants well.

Good access to all of the main players as well (except JB by his choice).

I wanted to hear a bit more dirt from JT
Clearly he has been gagged.

It was a very good balanced show I agree.

The whole Rex left field attack was suprising (to me) and didn’t realise how furious VA are about them!

 

[antycbr]

I wanted to hear a bit more dirt from JT
Clearly he has been gagged.

It was a very good balanced show I agree.

The whole Rex left field attack was suprising (to me) and didn’t realise how furious VA are about them!

I can understand as it isn’t exactly a fair allocation of assistance from their perspective.

I was also impressed that there were no pictures or Virgin Atlantic aircraft (hello Daily Mail)

 

[33kft]

Honestly, after watching that - the person who I felt came across worst of all was Elizabeth Bryan. Is there anyone she didn't blame for VA's predicament? - other than the board, of course.

 

[moa999]

Also didn't mention the (in hindsight) high price paid for Velocity and super bad timing - all of it debt funded.

 

[Standby]

I can understand as it isn’t exactly a fair allocation of assistance from their perspective.

I was also impressed that there were no pictures or Virgin Atlantic aircraft (hello Daily Mail)

I did note they used stock footage of a QF B767 though

 

[BNEFlyer]

Honestly, after watching that - the person who I felt came across worst of all was Elizabeth Bryan. Is there anyone she didn't blame for VA's predicament? - other than the board, of course.

From VA it would be between her and JB. But for the program, McCormack and Sharp. Rex will probably name an A320 after Michael McCormack as a thank you.

 

[jakeseven7]

Honestly, after watching that - the person who I felt came across worst of all was Elizabeth Bryan. Is there anyone she didn't blame for VA's predicament? - other than the board, of course.

Agree, she was dismal. What a waste of space she and the board have been in this whole sorry collapse.

I just get so furious when they act so blase and joke in an interview as she waddles onto the next cushy board role no doubt, leaving literally 1000's of people out of a job because of sustained poor management and board tolerance of it (yes yes I know covid finished VA off but they had a huge role in taking them to the knifes edge). Good bye and good riddance.

I think of all the poor VA1 staff about to be fired watching that show and it makes me pretty upset. Maybe JB did the right thing not turning up to speak....

 

[33kft]

Rex will probably name an A320 after Michael McCormack as a thank you.

But they're still solvent. How much money would it have taken from taxpayers to see VA thru to the end of the year where things might just have a chance of starting to pick up again? How many times what was given to Rex would that have been? The truth is even if VA got the $1.4bn loan that they asked for, vs the cut of the $300m regional bailout that Rex got, they'd still be in bad shape. What could they have done in that time to fix their operations so they don't burn through that capital without a way to make good on the loan? It is certain they did not foresee the depth of this crisis back in April. Meanwhile, they'd still be locked in all the lease agreements with all the same creditors. Blaming Rex won't resurrect VA.

 

[jakeseven7]

Blaming Rex won't resurrect VA.

PS and the old VA chair seem to think it will

Anyway its hard right. QF and Rex are unique in their own ways. QF, the national airline and flag carrier, restricted by the QF sales act, only Australian owned international carrier of significance, national security and strategic asset - yet still a public company. Then you have Rex who flys where no one else can be bothered, critically connecting regional communities that otherwise would go without - yet still a public company. Its quite bizarre, in other government models, both might be nationalised airlines....

And then you have VA1 which was basically not unique, didn't fly anything that wasn't already flown, literally just played the critically important but ultimately replaceable role of market agitator to help keep prices down and provide competition.. They were never going to get a specific hand out. QF and Rex may well have (may well in the future). Very interesting...

 

[ozstamps]

We live in Interesting times.

 

[Must...Fly!]

But they're still solvent. How much money would it have taken from taxpayers to see VA thru to the end of the year where things might just have a chance of starting to pick up again? How many times what was given to Rex would that have been? The truth is even if VA got the $1.4bn loan that they asked for, vs the cut of the $300m regional bailout that Rex got, they'd still be in bad shape. What could they have done in that time to fix their operations so they don't burn through that capital without a way to make good on the loan? It is certain they did not foresee the depth of this crisis back in April. Meanwhile, they'd still be locked in all the lease agreements with all the same creditors. Blaming Rex won't resurrect VA.

The other question might be how much money does Rex receive in subsidies every year for operating certain routes...at monopoly pricing, mind you...

 

[BNEFlyer]

But they're still solvent. How much money would it have taken from taxpayers to see VA thru to the end of the year where things might just have a chance of starting to pick up again? How many times what was given to Rex would that have been? The truth is even if VA got the $1.4bn loan that they asked for, vs the cut of the $300m regional bailout that Rex got, they'd still be in bad shape. What could they have done in that time to fix their operations so they don't burn through that capital without a way to make good on the loan? It is certain they did not foresee the depth of this crisis back in April. Meanwhile, they'd still be locked in all the lease agreements with all the same creditors. Blaming Rex won't resurrect VA.

They’re still solvent because of the the government bail out. Rex went from all but bankrupt to announcing expansion plans including acquiring jets and replacement aircraft within 3 months, during Covid. And their deputy chair coincidentally happens to be a former Nationals transport minister, and the current transport minister is also a NP member.

 

[drron]

I am not that sure having Jane on board might be all bad for Bain.
Just remember the time back in 2008 when QF replaced it's CEO.They could choose between the CEO of JQ or a high ranking QF exec.
One went on to run a popular airline though a business that ran at a loss. One went on to run a sometimes unpopular airline but one that mostly ran at a profit.
The Unions supported the fellow who ran a popular airline but the got the JQ boss.Now a greater percentage of them are likely to retain their jobs than those with the popular airline.

 

[HS-TQE]

Interesting that Bryan wanted to move JB on a while ago, yet JB in a statement stated he was requested to stay on for at least another 2-3 years.

I wonder who's fibbing here.

Personally I think Bryan (like many others in the interview) are trying to cover their backsides, considering Jayne is in the frame for the VAH chairperson as well, should Bain eventually decide to continue with PS as CEO.

 

[eastwest101]

- PS admitted they didn’t have enough public support to pressure for specific government support that wasn’t sector specific

Good summary and interesting, I think now, with hindsight, the regulators and the ACCC would love to rewind the clock back and do something about the launch of Jetstar, by either forced separation from Qantas or regulatory intervention post AN collapse. There was no reason to allow a union busting and predatory pricing offshoot to attempt to drive competition out of the market that was protected by the Qantas Sales Act.

Too late now - but a forced divestment would be rather karmic if it ever happened.

 

[jakeseven7]

Good summary and interesting, I think now, with hindsight, the regulators and the ACCC would love to rewind the clock back and do something about the launch of Jetstar, by either forced separation from Qantas or regulatory intervention post AN collapse. There was no reason to allow a union busting and predatory pricing offshoot to attempt to drive competition out of the market that was protected by the Qantas Sales Act.

Too late now - but a forced divestment would be rather karmic if it ever happened.

That will only happen now if VA2 collapses. Hopefully that does not occur!

 

[oz_mark]

Interesting that Bryan wanted to move JB on a while ago, yet JB in a statement stated he was requested to stay on for at least another 2-3 years.

I wonder who's fibbing here.

There's Bryan and then there's the board. I suspect while the board supported JB, that it was not unanimous, and over time, Bryan was able to sway the board more to her way of thinking.

So, while the people involved will answer questions to spin things their way, I don't think the answers are inconsistent.