Virgin Australia Financially Secure? [Now in Voluntary Administration]

[cove]

I think those dollars from passengers who have not flown will be unsecured creditors whose only chance to recover would be a credit card charge back. The unsecured creditors are likely to get trashed.

 

[Quickstatus]

How will TA originated transactions be affected?.
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I think those dollars from passengers who have not flown will be unsecured creditors whose only chance to recover would be a credit card charge back. The unsecured creditors are likely to get trashed.

Yes including those who VA convinced to keep their cancelled tickets as a credit earlier on in the Covid season.

 

[cove]

I doubt any refunds are coming from the administrators. They just gather up all the assets....liabilities are pretty much frozen so I cannot see funds getting refunded to anyone. I doubt the shareholders will kick in some dollars now that they have lost their investment.

 

[AustraliaPoochie]

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.

There is some spruike today, that Alliance is ready to jump in as a replacement for VA as a LCC.

 

[HS-TQE]

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.

SIA were never gonna bid considering they just basically got a government funded bailout via their parent company Temasek, on the condition from some politicians they don't spend that bailout money overseas.

Taxpayers won't be happy if the bailout money was spent overseas, especially on a money losing investment, when those dollars could've been used on fighting the 2nd round of COVID-19 infections in Singapore (along with a recently introduced heavier lockdown in Singapore pretty much killing most of SIA's revenue).

Also, SIA are overrated as investors and aren't the "so called saviour" that some people are still trying to hang onto. They've had 3 goes at the Australian Market, had full control and ownership of their 2nd go (Tiger Airways Australia), and failed dismally in all three attempts.

Like how a number of people say that VA should "stick to their knitting" of being a domestic only player. SIA should also "stick to their knitting" by operating their airline well from their home hub of Singapore and stay out of investing overseas.

3 attempts overseas in the Australian Market and failing isn't being "unlucky", it's a mixture of incompetence, ego and at times "no ticker" across the past and present SIA boards.

 

[oz_mark]

I think those dollars from passengers who have not flown will be unsecured creditors whose only chance to recover would be a credit card charge back. The unsecured creditors are likely to get trashed.

The travel credits are going to be a challenge. If someone does buy the company, but trashes the travel credits, then they could say goodbye to all those people as customers. They'd have to come up with something palatable.

 

[odysseus]

He was the "Master" in the British version of the Apprentice. Inconsistent statements goes with the territory.

Actually, that is Alan Sugar. And he was far more sensible/consistent than the US Trump version!

 

[odysseus]

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

Except it also has a duty to other stakeholders, including customers.

 

[Quickstatus]

it’s actions are not inconsistent with its duty to other stakeholders

 

[cove]

So it will be interesting times for any buyer to have to consider honoring flight credits, frequent flyer points, keeping travel agents whole, settling airport usage charges and stuff like that. Then there are the money wallets and fuel suppliers as well as the food and drink suppliers.
You would not blame a subcontractor holding on to a plane engine if the fix up work has not been paid. They would have a lien on that item.
All good fun for an accounting firm to look at and mostly ignore as they look for a buyer.

 

[Borisdog]

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

……...

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

The main thing it says to me is - PAY YOUR DEBTS.

 

[tomlee1986]

I think those dollars from passengers who have not flown will be unsecured creditors whose only chance to recover would be a credit card charge back. The unsecured creditors are likely to get trashed.

I agree with you there - the unsecured creditors are the last to receive any payout - generally they are the ones that misses out at the end no matter which company goes bust in any industry

 

[hydrabyss]

The more I read up on BGH the more I hope they are the ones to take over Virgin. Having already tried to purchase Qantas when it had $8.4b in debt they are obviously not scared of some hard work.

I gather an offer from the Government is something that may be needed to help in the short term but with talk of middle seats being blocked ticket prices will need to rise considerably to make flying profitable for some time.

 

[SydneySwan]

Who said VA didn't have any money? Shopback have just confirmed cashback on a VA booking made in late January. $6.06!

Now if the Deloittes / VA bean counters could focus on the little matter of a refund for my 2 return trips to Tokyo ..........

 

[jakeseven7]

For once a good and sensible media article without the hype and panic. Damning to JB and everything he did but his that is his legacy now.

The key problem with the strategy was JB took VA’s cost base to basically the same as VA but QF are able to extract premium pricing from the market which led VA to slowly bleed to death. VA simply didn’t win enough corporate / premium traffic. Just rats and mice. Then they inflicted their own wounds - VAi, Tiger and their disastrous foray to take on QFLink leaving them with aircraft they can’t use.

A return to DJ days appears to be the consensus strategy.


Back to the future strategy is Virgins best bet for survival

Virgin’s shift upmarket (even as Qantas was slashing its own costs) sacrificed almost all the cost advantage it had over the Qantas brand and allowed Jetstar to dominate the low-cost space, but predictably failed to shake Qantas’ hold on the corporate market

A remade Virgin needs to regain a material cost advantage over Qantas and to focus on the price-conscious end of the full-service SME and tourism and leisure markets

The administration and a new owner could do more, more quickly and brutally, than Scurrah was able to do while the business was operating normally.

Back to the future strategy is Virgin's best bet for survival

There is survival and profit in an old strategy for Virgin set up by its founder Brett Godfrey.

www.smh.com.au

 

[kyle]

Who said VA didn't have any money? Shopback have just confirmed cashback on a VA booking made in late January. $6.06!

Now if the Deloittes / VA bean counters could focus on the little matter of a refund for my 2 return trips to Tokyo ..........

I've got 2 flights with cashback of $21.75 each... the 100 day wait time after travel is up end of May...

 

[dajop]

The key problem with the new world strategy was JB took VA’s cost base to basically the same ..

The new world carrier strategy was BG’s, it seemed to be working OK. JB’s strategy was more or less a full service model.

 

[jakeseven7]

The new world carrier strategy was BG’s, it seemed to be working OK. JB’s strategy was more or less a full service model.

Apologies I got them mixed up, amended. Thank you

 

[melb78]

Ever who buy the airline they would be stupid ripping all the j class out of aircrafts as it will cost more. hope they leave as is and maybe cut back all routes that have not made money and stick with lax and Tokyo where they had very good numbers and get rid of luke manghan j class meals and get some one fresh.

 

[bcworld]

stick with lax and Tokyo where they had very good numbers

Do we even have numbers for HND? It hasn't even operated as yet.