Bain Capital takes Control of Virgin Australia

[RAM]

Please, VA1 milked VFF even though it was 'in a trust'.... remember the 'loan' from VFF to VA1? Ahem....

Bain will get whatever they want out of VFF.

No, not quite correct.

Bain cannot unilaterally alter the trust deed governing VFF. The loan to VA has/was paid out in full with the settlement including interest I read. So VFF remains 100% cash backed where as QFF has no cash backing requirement, zero, zilch, nada. As Q looks to have negative Net Tangible Assets (as preliminary results release showed less than 5 weeks operating cash burn left in NTA on pg3) - VFF looks by far the safest scheme - let's hope late next week we start to have some more detail of the future VFF.

Next week will finally start to provide some answers about VA MkII and clear away much of the recent mis-information that has been swirling around.

If Bain want to make a clear distinction between themselves & Q, they could issue a media release along these lines next week (copyright held by me of course!):

"Virgin Australia is proud to announce that now that we have come through the other side we will not be 'enhancing' our service by removing staff in airports. We will continue to have real people providing the VA service you've come to enjoy since we were first established.

With our much younger fleet using one of the world's highest rated 'on-time' aircraft we look forward to seeing you onboard soon. Whilst CV will limit what we can do immediately, rest assured the VA approach to travel will be there with you in the future.

Over coming weeks we will be announcing a range of exciting developments that will benefit you, our staff and the community.

We live in interesting times and all our wonderful staff will be doing our utmost to pay you back for your unswerving support through these trying times."

Or I could be wrong.

 

[jakeseven7]

Or I could be wrong.

Yup, you are wrong because the question I as discussing was about the influence of Bain over VFF and that is (will be) 100% up to them.

The other stuff is just jargon talk. I think you quoted the wrong post...

 

[henrus]

If Bain want to make a clear distinction between themselves & Q, they could issue a media release along these lines next week (copyright held by me of course!):

Hopefully, this is the case. Just in case someone at bain/virgin want's to get in contact with you regarding a job in PR how would they achieve it?

 

[Bagpuss]

All I can say is it's going to get very interesting. Everyone is saying they are going to "milk" Velocity / Virgin and saddle it with debt. I cant see how they can saddle more debt into it as it went through administration to clear the debt.
All private companies ideally are there to make a profit.
The best thing Bain can go is make the business profitable and hold onto it for the long term and reap the profits

 

[TheInsider]

The best thing Bain can go is make the business profitable and hold onto it for the long term and reap the profits

Bain will never hold on to VA for long, that's not their business model.

 

[dajop]

All private companies ideally are there to make a profit.

Yes they are. But some are in it to make a quick buck with relatively short term capital gains. Others are more interested in generating consistent long term profits. Bain is in the former camp.

 

[HappyFlyerFamily]

All I can say is it's going to get very interesting. Everyone is saying they are going to "milk" Velocity / Virgin and saddle it with debt. I cant see how they can saddle more debt into it as it went through administration to clear the debt.
All private companies ideally are there to make a profit.
The best thing Bain can go is make the business profitable and hold onto it for the long term and reap the profits

Making business profitable does not necessarily equate to Bain making money (eg take more money out (+ rate of return) than capital injected)

 

[HS-TQE]

Yes they are. But some are in it to make a quick buck with relatively short term capital gains. Others are more interested in generating consistent long term profits. Bain is in the former camp.

I wonder where does that leave the "Big Two" of the former ownership group, considering they (along with the other former owners) were heavily involved in mortgaging (a.k.a asset-stripping) the owned VA fleet against the banks.

 

[RAM]

Yes they are. But some are in it to make a quick buck with relatively short term capital gains. Others are more interested in generating consistent long term profits. Bain is in the former camp.

A bit like Macquarie Bank & their aircraft leasing business - MB likes nothing better to take a margin & onsell but in some cases they're long term operators (until an offer they cannot refuse comes along).

 

[HS-TQE]

$24.8 million "writeoff" for SIA (Singapore Airlines) as they formalise the transfer of their 20% stake in VAH to 'BG Hart Aggregator' (Bain Capital LP) on November 11, 2020.

SIA transfers Virgin Australia shares to BC Hart Aggregator

The transfer of the shares is not expected to have any material effect on SIA's EPS and NTA for the coming FY.

www.theedgesingapore.com

 

[openseat]

So VFF remains 100% cash backed where as QFF has no cash backing requirement, zero, zilch, nada. As Q looks to have negative Net Tangible Assets (as preliminary results release showed less than 5 weeks operating cash burn left in NTA on pg3)

Things must be a little desperate at Q with the share buy back using terminal sale and lease back debacle, very little cash flow, unfunded QFF and that the CEO couldn't get the Qld premier to open the borders to Sydneysiders. It certainly puts VA2 in a different light coming to the market with a cleansed balance sheet.

 

[RAM]

Things must be a little desperate at Q with the share buy back using terminal sale and lease back debacle, very little cash flow, unfunded QFF and that the CEO couldn't get the Qld premier to open the borders to Sydneysiders. It certainly puts VA2 in a different light coming to the market with a cleansed balance sheet.

Not that you'd notice from the media & talking heads though. Very different agenda.

 

[moa999]

Assume the new advertising campaign also means they've sorted the branding / shareholding deal with Branson ?

 

[AIRwin]

Kicking off with a sale :

Flights - find great value fares with Virgin Australia

Fly with award-winning service and great value fares to popular destinations across Australia. We can't wait to welcome you onboard Virgin Australia soon.

specials.virginaustralia.com

 

[mrmerc500]

Loving the $169 fares ex PER to MEL & SYD with the hope that one can travel to WA once open!

Another $10 shaved off the KAL & ADL would be nice, also prices for CNS & HTI seem great!

 

[HS-TQE]

VAH set to be removed from the ASX as Bain Capital LP formally takes control as the sole shareholder/owner of tommorow.

https://twitter.com/x/status/1328178996182360073

 

[RAM]

Well the next two weeks should provide a good idea on whether Bain lives up to my expectations.

On the competitor front - Q took delivery of its latest B787 a couple of days back. It flew from Boeing strait into storage alongside some of Q's A380s & A330s in Victorville.

More here: 2020 FY Results

 

[RAM]

Well, Bain are disappointing me so far.

Are they putting the cart before the horse here or what?

This is now the 4 or 5th email that's come through pushing either Virgin Money Velocity or Amex Velocity cards



It sure is a lucrative offer....

Provided 'Status Credits' will actually count for something in the future. The same about the 100,000 VFF points sign on bonus + 40,000 referral bonus.

Surely Bain should have made a couple of 'future benefit' statements about exactly what 'status credits' actually mean in this brave new world. Similarly for 140,000 VFF points? For example: Is there shortly going to be announcement of reciprocal benefits with International airlines? The ability to redeem VFF for international flights on those airlines?

Perhaps Jane could have a quiet word in the ears of the marketing gurus - I sure hope she didn't OK this although PS was boss until today, perhaps it is a case of sour grapes coming through with the VA exec group departures? Who knows? Other than it does not improve their image.

All it possibly has done is make AJ smile!

I wonder just how nervous the occupants of the C-suites at Q are feeling, now that Bain is free & clear, though?

If Bain wanted to 'put a shot across Q's bows' to let them know who they're dealing with - then we may well see some very cleverly crafted pieces put out by Bain over the next 4 to 5 weeks.

If it was me I would be extolling the virtues of VA MkII that highlight the extreme differences with one of their major competitors. Say:

"In these uncertain times, you can take comfort of the fact that Velocity Frequent Flyer points are 100% cash backed - Unique amongst airlines in Australia."

"VA is proud to offer the youngest fleet to carry Australians safely & reliably to their destinations in this troubled world we find ourselves in. With other Australian airlines operating fleets 50% or more older - VA prides itself on our customers not worrying whether their flight will be in service."

"Just like many of our wonderful customers, 2020 has been a tough year and we're over-joyed to be past the worst & launching our resurgence so we can help in yours!"

Nothing like raising the questions...

 

[jakeseven7]

Surely we can get our resident consultant back now to give us some intel, now VA1 has been dissolved.....
@pauly7 are you still with us?

 

[henrus]

Well, Bain are disappointing me so far.

haha it's day 1... don't expect everything to fling back to normal tomorrow!