What is Virgin Australia's strategy (post-administration)?

[simmomelb]

Yab

VA 1.0 never actually operated their own international lounges In Australia pre-Covid. They had a contract with No.1 (The House in SYD/MEL and MyLounge in BNE). The only international lounge VA 1.0 operated outright was the pop-up lounge in WLG.

Yeah, I don't think many would expect them to open their own international lounges, they simply don't have enough flights to warrant this (far fewer than VA 1.0) it really doesn't matter whether it's their own or a lounge partner IMO.
I can't imagine this is anything other than saving dollars, they might lose a few customers not having a lounge partner, but so be it, I'm guessing is their view for now, unfortunately.

 

[RooFlyer]

I can’t see it anytime soon.
We have to lower our expectations for now unfortunately

I've only just come into this thread, so apols if this has been canvassed before. With VA on the pathway to a float, I would think that much of forward operational changes are being 'locked down' (or locked out), so the airline is in a reasonable 'steady state' coming into the float. International lounges budgeted for say, 6-18 months would impact projected EDBITDA. Leave it off the plans and let the new owners pay for them, or not.

I've been though a number of floats and asset sales (from an M&A role) and as soon as the float timetable looks 'real', the lawyers will start screaming "don't change anything!!!". You can, of course, and they may, but "frills", probably not.

 

[AustraliaPoochie]

I can’t see it anytime soon.
We have to lower our expectations for now unfortunately

Or (pre) pay (extra costings to the int trip), ie, get to the airport a bit earlier, after having prepaid for any of the pay per entry lounges, and then enter a lounge, either Plaza Premium or one of the other lounges that allows this at an Aust in airport on dep.
On an int flight from ADL, say, ADL - DPS with VAi, has anyone tries to use the J lounge at ADL airport prior to the flight, tho.
Have used the lounge many times, prior to a VAd flight I take, but have not flown VAi out of ADL.
Or lets say, flying QR ADL - AKL on a flight with VFF # in the booking in J, would it be the VAd lounge...
Or (pay extra for) the Plaza Premium in the int dep hall after int sec & immi processing.

 

[jase05]

Or (pre) pay (extra costings to the int trip), ie, get to the airport a bit earlier, after having prepaid for any of the pay per entry lounges, and then enter a lounge, either Plaza Premium or one of the other lounges that allows this at an Aust in airport on dep.
On an int flight from ADL, say, ADL - DPS with VAi, has anyone tries to use the J lounge at ADL airport prior to the flight, tho.
Have used the lounge many times, prior to a VAd flight I take, but have not flown VAi out of ADL.
Or lets say, flying QR ADL - AKL on a flight with VFF # in the booking in J, would it be the VAd lounge...
Or (pay extra for) the Plaza Premium in the int dep hall after int sec & immi processing.

On our recent QR ADL-AKL flight we were directed to the VA lounge but obviously we could’ve used the QF lounge. QR has an agreement with VA to keep their lounge open for the DOH flight which is 2-3hrs after the last VA flight departs. It took all of about 15 minutes tops to get from VA lounge to the International gate

 

[Edge]

I wish there was a way to upgrade flights on partner airlines with velocity points.

I’m flying a lot more internationally now to Asia and USA but apart from transferring points to SQ there doesn’t seem to be a way of doing it.

Used to love flying the 777s in J to LAX. Oh well.

 

[HS-TQE]

Per the paywall article on "The Australian" under the title : Credit Suisse fall clouds prospects for Virgin float. It looks like Bain's proposed 49% float of VA 2.0 will be delayed (again) after the presentation in Singapore 'fell flat' amongst potential investment banks and funds.

 

[Bagpuss]

Per the paywall article on "The Australian" under the title : Credit Suisse fall clouds prospects for Virgin float. It looks like Bain's proposed 49% float of VA 2.0 will be delayed (again) after the presentation in Singapore 'fell flat' amongst potential investment banks and funds.

Bain are potentially doing the right thing by exploring options as it gives them perspective on the state of the company.

The IPO isn't guaranteed (whilst many people think it's a done deal). I'm of the belief it's the wrong time to do so with so much uncertainty. I would be surprised to see it happen prior to 2024.

 

[Saab34]

Might be wise to let the market soak up FY23 and FY24 H1 results to shake off any uncertainty around the traps. I think they are about 8-10 months too early but we will see what happens in the coming months.

They seem very eager to offload while the margin’s are high, I would have thought that doing that might have spooked investors vs trying to get them onboard. I wouldn’t be investing at the moment, I would want to see what happens in H1 and by then you will get some colour around revenue/market position for H2. Feb/March next year seems like a good time to float.

Nobody can really tell anyone what is going to occur in the financial markets in the next 12 months, nor general trading conditions in the local market. Certainly is too volatile for my liking. I’d be more comfortable seeing out next Christmas and reviewing soon after.

 

[jakeseven7]

Per the paywall article on "The Australian" under the title : Credit Suisse fall clouds prospects for Virgin float. It looks like Bain's proposed 49% float of VA 2.0 will be delayed (again) after the presentation in Singapore 'fell flat' amongst potential investment banks and funds.

It's not a good time to be seeking this source of capital for such a risky business investment, let alone one that has failed before. I think its rock and hard place for Bain though, they clearly wanted to divest at a time where everyhting looked rosy - however macro events have conspired against them and that has thrown major headwinds thier way. Again I call on our AFF expert insider @pauly7 who might be able to shed some non-confidential light on things for us!

 

[Bagpuss]

It's not a good time to be seeking this source of capital for such a risky business investment, let alone one that has failed before. I think its rock and hard place for Bain though, they clearly wanted to divest at a time where everyhting looked rosy - however macro events have conspired against them and that has thrown major headwinds thier way. Again I call on our AFF expert insider @pauly7 who might be able to shed some non-confidential light on things for us!

I still stand my by comment RE Bain. They're in it for a profit, either to fully or partly digest to make a profit and receive dividends to.

It's no different to anyone who buy's shares ... Everyone's doing this stuff for a profit. We all go to work to make money (aka a profit)

So much fixation about Bain being private equity, totally confused. The transaction was done during voluntary administration, the business had already been re-mortgaged / asset stretched / "the most expensive A330 leases in the World" / paying leases for ATR for many years to be parked up / (at least some) aircraft constantly repainted.

Almost every private company has headwinds coming their way. I know this is a forum for comments but sometimes I think it's forgotten that Virgin Australia exists today thanks to the administrators and to Bain.

Whilst Virgin Australia is a private company it still has to conduct in line with all regulations and the financial results etc are known and will come out in the press.

 

[HS-TQE]

So much fixation about Bain being private equity, totally confused. The transaction was done during voluntary administration, the business had already been re-mortgaged / asset stretched / "the most expensive A330 leases in the World" / paying leases for ATR for many years to be parked up / (at least some) aircraft constantly repainted.

VA 1.0 was also paying mortgages on the (formerly owned) E190s that were parked up on top of the parking fees, as no-one was willing to take them up either, whilst also having to pay one-off fees for returning the leased portion of the E190s early.

VA 1.0 had very little to no unencumbered assets when they did file Voluntary Administration back in 1.0, and even their most valuable unencumbered asset: Velocity Frequent Flyer, had an unexplained $150 million loan against them by the former ownership group of SQ, EY, et al.

Borrowing against VFF (again) to fund the (eventual) proposed VA 2.0 float is also something their current owner Bain has not ruled out either.

 

[Bagpuss]

Borrowing against VFF (again) to fund the (eventual) proposed VA 2.0 float is also something their current owner Bain has not ruled out either.

Any company which has assets and has cards to play will keep playing them until they run out of cards. Selling / mortgaging / borrowing against these assets is highly usual and common.

Corporations can announce record breaking profits, but have little money (cash) in the bank.

As a side note many employees don't look at their employers financials or look them up when applying for jobs.

Post automatically merged: Mar 21, 2023

Per the paywall article on "The Australian" under the title : Credit Suisse fall clouds prospects for Virgin float. It looks like Bain's proposed 49% float of VA 2.0 will be delayed (again) after the presentation in Singapore 'fell flat' amongst potential investment banks and funds.

Virgin Australia IPO Concerns After Credit Suisse Collapse

With Virgin Australia promoting the airline to investors, the collapse of Credit Suisse has cast a shadow over the climate for its IPO.

simpleflying.com

Bain Capital (Bain), the owners of Virgin Australia (VA), have engaged bankers Goldman Sachs, UBS and Australian advisory firm Barrenjoey to prepare for the initial public offering (IPO). Their task was to report on the best timing, structure and metrics to return VA to the Australian Stock Exchange (ASX).
It has been estimated that VA generated first-half 2021/22 revenue of AU$2.5 billion ($1.67 billion), from which it earned an estimated AU$125 million ($83 million).

Virgin Australia seeks $450m loan ahead of public listing - Travel Weekly

Virgin Australia is looking for a loan of $450 million to pay its owner Bain Capital before the airline advances with its planned IPO later this year.

www.travelweekly.com.au

 

[oz_mark]

VA 1.0 had very little to no unencumbered assets when they did file Voluntary Administration back in 1.0, and even their most valuable unencumbered asset: Velocity Frequent Flyer, had an unexplained $150 million loan against them by the former ownership group of SQ, EY, et al.

Borrowing against VFF (again) to fund the (eventual) proposed VA 2.0 float is also something their current owner Bain has not ruled out either.

I don't think it was an 'unexplained' loan.

 

[twiningb]

On our recent QR ADL-AKL flight we were directed to the VA lounge but obviously we could’ve used the QF lounge. QR has an agreement with VA to keep their lounge open for the DOH flight which is 2-3hrs after the last VA flight departs. It took all of about 15 minutes tops to get from VA lounge to the International gate

You'd think so, but I was refused access by the QF lounge dragon, flying a revenue J ticket on QR ADL-AKL. This was about a month ago.

 

[jakeseven7]

I still stand my by comment RE Bain. They're in it for a profit, either to fully or partly digest to make a profit and receive dividends to.

Why wouldn't you? They are your opinion! You are entitled to say anything you want - well within reason

Totally agree, they are not a charity they are looking to capitalise on their sunk investment costs in the most optimal fashion, period.

 

[Bagpuss]

Totally agree, they are not a charity they are looking to capitalise on their sunk investment costs in the most optimal fashion, period.

As per any company with a shareholding

 

[jakeseven7]

As per any company with a shareholding

They are able to avoid some of the 'annoying' obligations that a statutory ongoing operating company is tied down by however, which is why firms like Bain carry a bit of a reputation...

As our resident insider has shared previously, their plan was to be well on the road to be sold down by now. Bumpy macro environment is going to be interesting to see how they navigate, its a tricky time for many businesses.

 

[bladeau1981]

On our recent QR ADL-AKL flight we were directed to the VA lounge but obviously we could’ve used the QF lounge. QR has an agreement with VA to keep their lounge open for the DOH flight which is 2-3hrs after the last VA flight departs. It took all of about 15 minutes tops to get from VA lounge to the International gate

Why would you use the VA lounge in Adelaide over the QF one? I guess it's a shorter walk after.

 

[simmomelb]

Why would you use the VA lounge in Adelaide over the QF one? I guess it's a shorter walk after.

Because QF does not keep their lounges open past their own last flights for partner airlines, last I checked.
If not that, the QF lounge is a pain in the backside to get into when flying QR and showing VA status (Gold/Plat), many stories on here about that, and additionally, as you pointed out, the VA lounge involves a shorter walk for Int.

I am guessing it's one of these.

 

[Bagpuss]

As our resident insider has shared previously, their plan was to be well on the road to be sold down by now. Bumpy macro environment is going to be interesting to see how they navigate, its a tricky time for many businesses.

An insider once told me various things, all of which were incorrect and never material.

Per the media, most people were shocked on the recent news on investigating an IPO. However, some people thought that Bain would of disposed on Virgin Australia within 6 months.

The one thing we agree on at the least is it's a tricky time for many businesses.