Virgin Australia Financially Secure? [Now in Voluntary Administration]

[travel_bug]

Black Swans were in WA wern't they?

Reference to the Canberra coat of arms which features two swans, one black and one white.

 

[p--and--t]

Pretty sure the gov would have done a few sums on the back of a drink coaster and cogitated over the cost benefits to their bottom line:

• already paying all VA staff the job keeper for six months
• already cut a few costs/taxes
• already subsidised several flights
• even it doesn't fail ,the airline (as will all airlines everywhere) will be significantly smaller for 18-24 months and thus x% of staff will be sacked anyway and be on job seeker - the whole sector is going to contract
• QF will also be dropping staff in 6 months because they are going to be smaller - additional job seeker costs
• what are the likelihood of the company surviving with just a loan in its current form and would it be competitive in the foreseeable economic turmoil
• whats the likelihood of getting their money back
• are they just delaying the inevitable for 6-9 months
• if the company gets restructured how many staff will lose their job and would it be any different to those who will lose their job anyway due to economic turmoil
• they currently have run at a loss for years and paid no tax, if it's restructured could it make a profit
• will they be a better competitor if it restructured rather than bailed out to limp along
• if they support VA and then that causes QF to totter and need help, how much will that cost
• if they interfere what will be the fallout with other industries demanding special treatment
• if they interfere what will be the fallout to their conservative/right wing
• if they do/don't act what will be the current overall public sentiment (not just VA supporters) and how long will that last

 

[Themuel]

Yo

Pretty sure the gov would have done a few sums on the back of a drink coaster and cogitated over the cost benefits to their bottom line:

• already paying all VA staff the job keeper for six months
• already cut a few costs/taxes
• already subsidised several flights
• even it doesn't fail ,the airline (as will all airlines everywhere) will be significantly smaller for 18-24 months and thus x% of staff will be sacked anyway and be on job seeker - the whole sector is going to contract
• QF will also be dropping staff in 6 months because they are going to be smaller - additional job seeker costs
• what are the likelihood of the company surviving with just a loan in its current form and would it be competitive in the foreseeable economic turmoil
• whats the likelihood of getting their money back
• are they just delaying the inevitable for 6-9 months
• if the company gets restructured how many staff will lose their job and would it be any different to those who will lose their job anyway due to economic turmoil
• they currently have run at a loss for years and paid no tax, if it's restructured could it make a profit
• will they be a better competitor if it restructured rather than bailed out to limp along
• if they support VA and then that causes QF to totter and need help, how much will that cost
• if they interfere what will be the fallout with other industries demanding special treatment
• if they interfere what will be the fallout to their conservative/right wing
• if they do/don't act what will be the current overall public sentiment (not just VA supporters) and how long will that last

u should be running an airline

 

[moa999]

Pretty sure the gov would have done a few sums on the back of a drink coaste

Think the other big one is how many other companies would have come cap in hand to the government.
- Hotel groups
- Travel businesses
- Pubs and clubs etc

 

[holdenmg]

KoganAir™ lol

 

[Borisdog]

The owners aren't in a position to "do squat now" due to worldwide lockdowns.

And there wasn't a need for them to "do squat before" as there was no issue with continuing operations - Virgin even got sizeable funding just a few months. So there wouldn't be an issue except for the government restrictions. Hence they're the appropriate party to resolve this.

Tripe. On both counts.

Virgin was a financial basket case before the corona virus dramas. Were the owners able to tip some cash in? Would Virgin have become financially unviable so quickly if their lead-in position was "better"?

If the owners want to keep THEIR business viable the THEY can stump up the cash required. I'm sick of multi-nationals and, for that matter, Australian businesses, going bust and expecting the tax payer to bail them out.

I don't care if it hands QF a monopoly. If it's financially viable to compete with QF post apocalypse then I'm sure some-one will do so. And I'm equally sure the government of the day will be keen for that to happen.

 

[davidj]

So, its confirmed: Paul Scurrah = fake news?

AJ just moved a few notches up the credibility scale in my books

 

[travel_bug]

So, its confirmed: Paul Scurrah = fake news?

AJ just moved a few notches up the credibility scale in my books

View attachment 215619

View attachment 215620

What’s that old defamation defence, “You can’t sue if it’s true”?

 

[Must...Fly!]

 

[dajop]

If the owners want to keep THEIR business viable the THEY can stump up the cash required. I'm sick of multi-nationals and, for that matter, Australian businesses, going bust and expecting the tax payer to bail them out.

I agree and disagree. If the "bailout" from taxpayer resulted in owners maintaining their equity - agree totally. If the bailout results in destruction of the equity of the owners who've mismanaged such a business whilst maintaining the staff, competitive value, intangible benefit of the company etc with a different ownership structure - then that may be acceptable. The latter is what everyone is hoping going into administration results in, without a taxpayer bailout.

 

[cove]

How about a name change to Velocity Australia to cut out the Virgin name royalty?

 

[jakeseven7]

Branson will come to the party in some shape or form. My thinking is more about stopping Branson from talking for a bit. The lower profile the better and the media is also getting his efforts to save VS mixed up with our story in Australia.

You were right.

Horrific appearance from Branson on the news - out right lying that the AU government has provided no assistance to airlines.

Result = antagonized the Treasurer to come out even more venomously against bailing out foreign companies like Virgin and the news then highlighted one by one all the foreign owners of Virgin and how rich they were.

Branson needs to be gagged, he is only hurting VA more. PS needs to get a leash on him quick smart

 

[AisleSeat]

How about a name change to Velocity Australia to cut out the Virgin name royalty?

Or just Velocity Airways

 

[tgh]

I don't "get" the rationale that says Qantas cannot fail and Virgin can.
Qantas milks the heritage teat for every drop and all but demands "national Icon" protection.
VA.. struggling along (as airlines) do… kept the b's honest.
Do I think the taxpayer should bail Va.. no I do not.. but the noisy roo should be treated 'zactly the same if it comes bleating for more favour.

 

[jase05]

PS speaks very well and I know it’s only one side of the story but hearing that tonight gives me plenty of confidence he can steer them on the right track.

 

[muppet]

To those obsessed with saving $15m per year paying Richard for the Virgin name how about some really rough math to get over it?

Google estimates repainting a 737 costs between US$100,000 to US$200,000.

So how about we call it AUD $200,000 per 737 x 130 planes = $26m .... just for the planes. Then lounges, terminals, gate signage, boarding passes, business class napkins and salt and pepper shakers.

 

[ANstar]

Let me walk you though it as you pay income tax.

Now that VA is in administration, if it doesnt make it out the other side there will be obligations on the government to pay for liabilities to the VA employees. These are backed by the government through the Fair Entitlements Guarantee Scheme. (link) After this time the VA employees will be on Jobseeker (the dole) until such time as they find another job, which might be a long time. The FEGS liability has been estimated at $800 million.

In this context government assistance becomes more likely in some form (and probably to QF now that the administration of VA has dealt with the foreign shareholders). It's probably cheaper than paying for the entitlments and unemployment benefits. Thats before we consider the downstream impacts on the tourism industry etc.

You stated you were a taxpayer, so now it's the governments role to minimise their costs in dealing with this mess and providing assistance may be cheaper than letting VA go into liquidation. It also provides political cover to provide assistance to QF as such assistance will be on a sector basis.

Be cheaper to offer $500 million incentive for a new airline to startup. Debt free and baggage free.... rather than prop up $5b of debt.

Well the stay on payment of royalties seems to be the only help he's provided in this period outside of "thoughts and prayers" and passive aggressive notes about lack of government loans and how he knows he lives in a tax haven but he promises that he's not there just to avoid tax

quick edit: I know he's said that he's pumped millions into saving jobs through Virgin Group, but I don't know how much of that actually went to VA given Virgin Group's minority stake, unlike its stake in Virgin Atlantic.

Branson... all fur coat and no knickers!

 

[jakeseven7]

To those obsessed with saving $15m per year paying Richard for the Virgin name how about some really rough math to get over it?

Google estimates repainting a 737 costs between US$100,000 to US$200,000.

So how about we call it AUD $200,000 per 737 x 130 planes = $26m .... just for the planes. Then lounges, terminals, gate signage, boarding passes, business class napkins and salt and pepper shakers.

So by your math it would pay back in a couple of years - good math work

And airlines spread out rebrands over years as well, its not all hit in one go.

 

[UP4014]

If all of the stories about recapitalisation of VA are true, AJ has a lot to be worried about, in particular the international operations. Even if they're not true and VA folds, the ACCC will be all over him.

I don’t think he does need to worry. A recapitalised virgin which will still be deminished and likely only a capital city flyer with cairns and Gold Coast thrown in.

 

[Must...Fly!]

Yeah like Branson is going to cop planes in a Virgin livery flying around for a non virgin brand....

It was Virgin Blue, now Virgin Australia. The good will is tied up in the brand, and Virgin IS the brand. Like it or not.