Virgin Australia Financially Secure? [Now in Voluntary Administration]

[tomlee1986]

Based on the discussions on here alone - the situation does look more dire than what we initially thought.. I hope for the sake of the staff and other creditors - they can get as much money back from this airline where possible..

 

[p--and--t]

Guess the actions of PER and ADL airports definitely preclude their state govts from any consideration of bidding to rehouse VA then.

Highlighting this in the media seems to me to be the antithesis of what the airports & industry need right now.

It could trigger an investigation into the airports own financial stability if they are going to these lengths.

That could ripple through the whole industry, airlines, airports, airport suppliers, taxi firms, airport parking, catering firms, et al.

Opening a virtual "Pandora's Box"

 

[Melburnian1]

Based on the discussions on here alone - the situation does look more dire than what we initially thought.. I hope for the sake of the staff and other creditors - they can get as much money back from this airline where possible..

I just can't see anyone wanting to buy VA, despite its intellectual property assets (VFF membership records).

There may be a big fight between bondholders and others this week.

Just how the administrators will conduct the virtual meeting is unclear. Their musings on Friday left this question unanswered as they suggest finding a suitable technological solution is challenging.

 

[tomlee1986]

I just can't see anyone wanting to buy VA, despite its intellectual property assets (VFF membership records).

There may be a big fight between bondholders and others this week.

Just how the administrators will conduct the virtual meeting is unclear. Their musings on Friday left this question unanswered as they suggest finding a suitable technological solution is challenging.

I think you might be right - even for the sake of saying using zoom is safe - it would not be big enough for this many creditors online for this meeting on Friday

 

[RAM]

May i kindly ask why these actions would make them a target for an ATO audit?

Certain types of 'financial' behaviour can act as triggers....

 

[tomlee1986]

Certain types of 'financial' behaviour can act as triggers....

To be honest.. I never heard of that before until now.. not saying you are wrong but I honestly never heard of such an act could cause ATO audit until now... I learn another new thing today

 

[Quickstatus]

It could trigger an investigation into the airports own financial stability if they are going to these lengths.

Really?, businesses try to claw back unpaid invoices every day. I don’t think that per se would trigger an investigation let alone an ATO investigation.
PER and ADL are owned by a consortium of super funds. It would be the last thing that any Govt would want to do - to start an investigation into a super fund. The super fund trustees would be already having a look at the investments.

I think a prudential / ATO investigation is a bit fanciful of a company trying to get their money back. They are only taking this action because other creditors are lining up.

 

[p--and--t]

Really?, businesses try to claw back unpaid invoices every day. I don’t think that per se would trigger an investigation let alone an ATO investigation.
PER and ADL are owned by a consortium of super funds. It would be the last thing that any Govt would want to do - to start an investigation into a super fund. The super fund trustees would be already having a look at the investments.

I think a prudential / ATO investigation is a bit fanciful of a company trying to get their money back. They are only taking this action because other creditors are lining up.

I never said anything about ATO? You picked wrong post to quote. Re-read what I said.

The ATO doesn't investigate companies financial stability. Creditors do!

Edit: Quite frankly I think it is a very stupid move by PER. Why on earth would to want to create fear about VA when they are in a delicate phase of hopefully fixing their problems where you have a good chance of getting all your money back and VA back in the air sooner to replenish your regular income stream. Instead jeopardises VA sentiment and chances of success, shows disloyalty to the sector, creates questions in peoples minds why does a $B organisation like PER have to block a couple of crippled, & in the scheme of things practically worthless, planes and draw attention to their own parlous financial state.

 

[Quickstatus]

I never said anything about ATO? You picked wrong post to quote. Re-read what I said.

It’s a combo comment.
Add below:

Perth & Adelaide Airports sure know how to make themselves a target for an ATO audit!

Creditors do!

No creditors don’t. In an administration, any debt has to be declared and it’s up to the administrator. All assets are in control of the administrator. All get in a queue (secured in front of unsecured). PER/ADL is trying to leverage their position. Whether it is successful in the end remains to be seen
.....

creates questions in peoples minds

why would people care about an airport. An airport patronage is in the main non discretionary.

 

[Melburnian1]

..Edit: Quite frankly I think it is a very stupid move by PER. Why on earth would to want to create fear about VA when they are in a delicate phase of hopefully fixing their problems where you have a good chance of getting all your money back and VA back in the air sooner to replenish your regular income stream. Instead jeopardises VA sentiment and chances of success, shows disloyalty to the sector, creates questions in peoples minds why does a $B organisation like PER have to block a couple of crippled, & in the scheme of things practically worthless, planes and draw attention to their own parlous financial state.

What particularly makes you think VA will 'fix its problems, give all money back to (unsecured?) creditors like PER or be back in the air sooner?'

Not saying you're wrong, as we don't know yet yea or nay, but my inkling is none of these things will occur.

 

[Quickstatus]

VA when they are in a delicate phase of hopefully fixing their problems where you have a good chance of getting all your money back and VA back in the air sooner to replenish your regular income stream.

VA is not in control of the business anymore - The CEO and the board have relinquished all control and executive power because they are now in administration.

The Administrator (who is legally defined and is legally required to act in the interests of the creditors) is in charge and calls the shots. The Administrator is not required and does not act in best interests of the travelling public, or other interested parties who are not creditors - unless there is alignment with the interests of the creditors. It is true that the best returns to creditors often involve playing a game that involves other non creditor parties.
(The creditors can remove an administrator)

 

[p--and--t]

why would people care about an airport. An airport patronage is in the main non discretionary.

I could be wrong, but the media to date has only been focusing on airlines and their lack of revenue at the moment.

But immediately I saw this move by PER which seems to me in the whole scheme of things is chasing peanuts and that led to what use is an airport if they are not collecting landing fees from downed airlines and revenue from closed/bankrupt tenants and empty car parks. How much are they leveraged and how secure are they if PER had to make this move. How much do they owe and to whom? How many months can they last with their fixed overheads? How do you get your future revenue? A strong domestic market with two airlines flying and competing would be a better outcome.

Seems all self defeating to me to block an old plane that can't fly anyway.

Creates bad sentiment and what does it say to those who were thinking of getting into aviation and helping VA fly again.

 

[Quickstatus]

No the media focus has been on the airlines plus the actions of 2 airports. That’s also the focus here in this thread too.

All valid views but unless you are a creditor those views don’t hold much weight. A creditor might hold those views, so let’s see if any of those view aligns with the interests of the creditors as a whole.

Airports are not immune from financial distress. Not even Qantas. Bear in mind that PER/ADL are held by pension and super funds - Being leveraged would not be how super funds invest

 

[p--and--t]

All valid but unless you are a creditor those views don’t hold much weight.

If PER owed me money I would be shifting my focus from VA and starting to ask questions on how stable they were.

 

[Melburnian1]

If PER owed me money I would be shifting my focus from VA and starting to ask questions on how stable they were.

I wouldn't, because it's PER's duty to its owners to protect its asset base.

 

[Matt_01]

Sounds like Adelaide airport has followed Perth and have reportedly seized 7 aircraft. Rumoured that VA owe ADL $10m

Bring on Airplane repo season 3 or 4

 

[Quickstatus]

If PER owed me money I would be shifting my focus from VA and starting to ask questions on how stable they were.

Ask away. Unless the debt is in default or unless you are a secured creditor with rights of review, I think you won’t get very far.
The notion that a company who looks to enforce debt collection is somehow in a fragile state itself is fanciful in the least. Who knows maybe they are but last I heard they are not in administration

A few aircraft that can’t fly won’t be missed by VA. It’s not as though VA needs them now. So there is no problems. The carcass is worth a bit of $$. Obviously PER has not blocked VA from using their airport - just impounded some unflyables. Sounds proportional.

......

Bring on Airplane repo season 3 or 4

I miss that show. The characters were always interesting especially that muscle guy.

 

[hydrabyss]

Bring on Airplane repo season 3 or 4

Would be a lot more interesting than a repo on a crop duster.

 

[cove]

If I was a buyer I would not bother with the Virgin name but I guess it could save on uniforms , sign writing and literature. I think Branson will be gone and most sponsorships will be history. Looks like Singapore Air are not bidding which is a real shame.

 

[Quickstatus]

The other aspect about the unpaid invoices is that VA collected the $$ from passengers. It’s not theirs to keep.

Back to basics with VA. Is brand Compass licence free?