Virgin Australia to be sold to Bain Capital

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Also won't be good news for the "Star Alliance fanboys" and/or UA flyers wanting VA to drop the DL partnership to join Star Alliance. Safe to say that VA joining any global alliance will be off the table for at least 12 months - 2 years, as UA will block/veto any (unlikely) *A application had VA kept DL as a partner.

No fanboy of Star Alliance, and don't think alliance membership is necessary for SQ, but in an environment where VA is not operating tranpac themselves, can't help but think UA & AC between are better partners to feed VA domestically (at least based on their pre-COVID 8 routes into Australia, vs DL's single route).

Or perhaps maybe not. If DL is only flying into SYD, then MEL and BNE bound traffic will be preferentially directed to VA, one presumes.
 
Good to see VFFs will still get lounge access etc. Seems this is more in aid of sorting the financial side (as revenue sharing was part of the JV)
 

56 737s (40 owned 737s including the x2 oddball 73Gs (700s), plus renegotiated the terms on 16 leased 737s).

Decision on the 737MAX order (whether to write off the order as a loss, or renegotiate the deposit for alternative aircraft) is still yet to be made and an announcement will be made in the future.

Also some regional route cuts, which is not surprising considering most of them were served by the now withdrawn ATRs.
 
Route cutbacks coming.

No great surprise.

VA may not have been a major player on these routes - for instance I travelled about three or four years ago from MQL to MEL on its B738 that was about half full if that, and had a 'non-business friendly' middle of the day departure time, its sole flight (so no opportunities for same day returns) - so whether it kept fares below a level at which they'd otherwise have been is an interesting question.

SYD-AYQ has almost certainly always had hire fares. Now it'll be a monopoly for the QF Group. We know what economics says about that. Some minor glee from Mr Joyce no doubt (although at present he has his hands full with huge losses overall every day, and no sign of that improving).

One of our aviators may have to pay more from Albury to Sydney if he wants to fly. "Competition" between QF and ZL is to me not price-based as ZL's fares are rarely cheap and its aircraft smaller and older, so what's the incentive for QF to cut its fares?

But I bet QFd/JQd/ZL will be pleased, although tourism bodies and operators won't be in places like Port Macquarie and Mildura, even though one can drive or go by train then railway road coach to both (NSWTrainLink to Wauchope on the XPT train; V/Line to Swan Hill on locomotive hauled passenger trains - coaches for remaining sections).

(from 'The Australian' online less than an hour ago):

'...Among the changes brought about by the shift to an all Boeing 737 aircraft fleet, is the withdrawal from seven destinations and eight routes “for the foreseeable future”.

These include Ayers Rock, Albury, Tamworth, Hervey Bay, Port Macquarie, Mildura and Cloncurry.

The affected routes are Sydney-Ayers Rock, Sydney-Albury, Sydney-Tamworth, Sydney-Hervey Bay, Sydney-Port Macquarie, Melbourne-Mildura and Brisbane-Cloncurry and Mount Isa to Cloncurry.

The carrier will also cease flights to Tonga when international services resume.

Brisbane-Port Macquarie which is currently on hold, would continue to be operated by Alliance under Virgin Australia’s flight code...'
 

56 737s (40 owned 737s including the x2 oddball 73Gs (700s), plus renegotiated the terms on 16 leased 737s).

Decision on the 737MAX order (whether to write off the order as a loss, or renegotiate the deposit for alternative aircraft) is still yet to be made and an announcement will be made in the future.

Also some regional route cuts, which is not surprising considering most of them were served by the now withdrawn ATRs.

We can probably expect more route cuts once the eastern states start opening up again and VA2 seeks to make a profit on the higher yielding routes with their new small fleet. I suspect more secondary ports will either be axed or scaled back.... looking at Tassie sorry.....
 
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EY signs up as the third VA codeshare partner in the Bain era. After SQ and DL. So that's the "Big 3" signed up.

All other partners are currently a question mark, although IMO I'd think NH out of the remainder will be the next codeshare partner to sign up.

IMO, I'd think the HNA group carriers are likely to leave/be axed under the Bain era. Apart from NH the remaining existing codeshare partners could go either way.

 
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This is part of an article form that 'Airline Ratings' site:

'Virgin Australia flight attendants are being asked to take significant cuts in pay and conditions by Bain Capital to ensure the survival of the airline.

Insiders claim a flight attendant’s base salary is being slashed from A$61,179 to A$49,929 with new starters at just A$45,526, while shifts are moving from 9.45 hrs to 12 hrs to allow for transcontinental returns eliminating high overnight accommodation costs.

Other perks are being trimmed or eliminated as Bain, which purchased the airline out of administration for A$3.50 billion, cuts costs to survive in the new COVID-19 world.

One such perk that is going is a A$125 overnight allowance with most averaging 10 overnights a month.

Part-time flight attendants appear to be particularly targeted it is alleged.

Insiders say the new agreement would see them effectively go from being paid around A$40,000 a year for 70 hours a month to working up to 135 hours per 28 days for the same salary, which equates to about A$24,000 year or about A$25 an hour.

The cuts have upset flight attendants with over half commenting on a staff Facebook page that they would have taken voluntary redundancy if they had known of the severity of the cuts.

The new Enterprise Agreement is to be settled by October 31...'

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No great surprise, as the airline (on an overall basis) did not make money in its 1.0 version.

I remain of the view (despite Bain's aim probably being to hold it for three to five years and sell it at a profit) that VA 2.0 will fail to make meaningful profits or return on the capital employed. Let's see what occurs by say 2025.
 
I'm coming more and more to the view that a few of Virgin's shareholders never saw the airline as a serious business proposition, merely a convenience to sell domestic connections and make their network look better,

Sort of reminds me of a retailer buying shares in a local courier company because they get better delivery rates and couldn't give a toss about the operations of the courier company or struggles it might have.

Anyone who didn't see the cuts to pay and conditions when Bain was announced must have been a cultist, or came down in the last shower.
 
I'm coming more and more to the view that a few of Virgin's shareholders never saw the airline as a serious business proposition, merely a convenience to sell domestic connections and make their network look better,

Either that, or accessing higher value customers who predominantly fly domestically, with a lesser amount of international travel. You don't need to own the airline to sell domestic connections on it.

Or, in one case, to secure a royalty as a percentage of revenue ... not profit. 🤣
 
Either that, or accessing higher value customers who predominantly fly domestically, with a lesser amount of international travel. You don't need to own the airline to sell domestic connections on it.

Or, in one case, to secure a royalty as a percentage of revenue ... not profit. 🤣

I wonder if Bain/VA2 will interline with QFi? Did they in the past? I actually don't know.
 
Wasn't its sole interlining with SQ (internationally?)

Going back more than a decade DJ had UA as an early interline partner. MH were also a partner.



And don't forget this one, presumably interline as well as FF partner:
 
I wonder if Bain/VA2 will interline with QFi? Did they in the past? I actually don't know.

It was EK, MH and HA as early codeshare (edit: or FF) partners. As mentioned by others, DJ also had interline-only arrangements with SQ and UA.

This was before V-Australia was launched under Brett Godfrey (and the subsequent shake-up in partners - i.e BG's dumping the UA interline in favour of the codeshares with VX and DL - DL's partnership was later upgraded to a JV and renewed by JB in 2015).

SQ's interline was later upgraded to a codeshare partnership as they bought a initial 10% in VA (prior to Borghetti taking over from Godfrey)

EK and MH of course ended up going/forming partnerships with QF.

Source: DJ's early international partners: Virgin Australia's global alliance dilemma - Point Hacks
 
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Either that, or accessing higher value customers who predominantly fly domestically, with a lesser amount of international travel. You don't need to own the airline to sell domestic connections on it.

Or, in one case, to secure a royalty as a percentage of revenue ... not profit. 🤣

Also knowing the track record of most of VA mk 1's investors - notably the 'big two' - in other airlines (including VA, NZ, VS, AZ, 9W and Ansett over the past 3 decades) at best being "dismal".

All of those investments either ended up being taken over by government (in NZ's case), sold/reorganised at a loss (VS/AZ) or liquidated (9W/AN).
 
Also knowing the track record of most of VA mk 1's investors - notably the 'big two' - in other airlines (including VA, NZ, VS, AZ, 9W and Ansett over the past 3 decades) at best being "dismal".

You're missing two other notable investments, they of course were stellar! AB and TT (pre VA)!
 
DOCAs are expected to be signed on Friday. This will see the Companies transition from “In Voluntary Administration”, to “Subject to Deed of Company Arrangement”.
 
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DOCAs are expected to be signed on Friday. This will see the Companies transition from “In Voluntary Administration”, to “Subject to Deed of Company Arrangement”.
Story in the Australian this evening that Deloitte deliberately withheld the release of engine maintenance records to the leasing companies - using it as a bargaining chip. Without the documents the engines are worthless.

Now the argument is that VA are supposed to return the engines back to the US which they don’t want to do despite the lease terms requiring it.
 
Story in the Australian this evening that Deloitte deliberately withheld the release of engine maintenance records to the leasing companies - using it as a bargaining chip. Without the documents the engines are worthless.

Now the argument is that VA are supposed to return the engines back to the US which they don’t want to do despite the lease terms requiring it.

I thought the courts had already ruled on that. Going to be expensive, and presumably other lease returns will have the same issue
 
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