Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Doctore1003]

The Queensland fund would just be one of several consortia members, would it not? I think the headlines that 'Queensland wants to buy Virgin' are a tad misleading ...

 

[Cubiscus]

If Dutton is against it that's good enough for me to endorse it.

 

[jakeseven7]

They'll find a buyer, its just on what terms and how much remains. Hopefully not as a LCC.

QLD are trying to do two things, ensure the HQ stays in BNE and baselining an offer to give Deloitte leverage so the sale doesn't have to involve cutting VA to the bone. At best they'll be minority owners.

BNE to Japan started up recently. I'm guessing they see the 777s as assets that need to be used and international deployment is logical.

BNE to Japan never started.

 

[jakeseven7]

The Queensland fund would just be one of several consortia members, would it not? I think the headlines that 'Queensland wants to buy Virgin' are a tad misleading ...

Course they won’t. They will more than likely just continue to subsidise VA2 staying here, just like they did VA1. Just spend more probably.

But if I were the new VA2 owners I’d be pitching out VA2’s new home base and HQ to Mel and Syd as well and see who coughed up the most cash.

 

[antycbr]

But if I were the new VA2 owners I’d be pitching out VA2’s new home base and HQ to Mel and Syd as well and see who coughed up the most cash.

I think this is happening in the background and we don’t have the whole picture of what’s going to transpire. Sydney will be looking longer term at SWZ as well.

 

[WLGFlyer]

An investment corporation such as QIC will make investment decisions that they think will provide maximum return for their shareholders but QIC is also a bit like a sovereign wealth fund according to the QLD gov. It also owns 25% of BNE airport so there’s interests in aviation already.

Post automatically merged: May 13, 2020

Your political opinion of the QLD government can be resolved at the ballot box.

This article has more information on the role of QIC:

QIC tows new Queensland Future Fund into Virgin

Queensland wants to use its new $5 billion future fund to buy a stake in Virgin Australia.

www.afr.com

Reads to me as if the QLD government has directed QIC to handle the logistics of the purchase and eventually manage the asset. Doesn't exactly fit into QIC's other portfolio of low risk investments but then there is obviously the political component.

 

[jakeseven7]

I think this is happening in the background and we don’t have the whole picture of what’s going to transpire. Sydney will be looking longer term at SWZ as well.

We don’t. Someone does on AFF but can’t comment

 

[tomlee1986]

I have a feeling this QLD attempt is more like a stunt than anything... it is because most governments would prefer NOT to enter into businesses themselves, but to privatize them...

 

[p--and--t]

Bye bye refunds

Virgin Australia Administrator: Customers Likely Won’t Ever See Their Cash For Cancelled Flights Again

Virgin Australia Administration moves into next phase: No cash refunds and Government buyout?

loyaltylobby.com

 

[Bundy Bear]

Bye bye refunds

Virgin Australia Administrator: Customers Likely Won’t Ever See Their Cash For Cancelled Flights Again

Virgin Australia Administration moves into next phase: No cash refunds and Government buyout?

loyaltylobby.com

Hello American Express charge backs, I better ring American Express.

 

[tomlee1986]

Bye bye refunds

Virgin Australia Administrator: Customers Likely Won’t Ever See Their Cash For Cancelled Flights Again

Virgin Australia Administration moves into next phase: No cash refunds and Government buyout?

loyaltylobby.com

I was in high school when Ansett went bust.. but what I recall is that the customers at the time got $0 from the company!

 

[travel_bug]

I was in high school when Ansett went bust.. but what I recall is that the customers at the time got $0 from the company!

I think it was the first time "credit card chargeback" entered the lexicon of many Australians, I guess this will now be the second.

 

[tomlee1986]

I think it was the first time "credit card chargeback" entered the lexicon of many Australians, I guess this will now be the second.

To be honest... I wish this term "credit card chargeback" did not enter our vocab... but I am glad customers have a recourse to get the money back if possible

 

[33kft]

As Dutton's government just gave Rex, an airline with a former Nationals MP director, a $198 million gift, he's hardly in a position to talk about what's right or fair.

Given the lack of competition in REX's market it is hardly a great scandal, Australia has for as long as I can remember subsidised uprofitable regional services.

 

[tomlee1986]

Given the lack of competition in REX's market it is hardly a great scandal, Australia has for as long as I can remember subsidised uprofitable regional services.

I think Rex should be subsidised for those services... this is because neither QF or VA would even entertain an idea for those unprofitable routes.. even JQ might not be intetested.. thus Rex would be the one to run these routings

 

[burmans]

Given the lack of competition in REX's market it is hardly a great scandal, Australia has for as long as I can remember subsidised uprofitable regional services.

Yes but as we know the government gave REX the money because they regarded those regional routes as essential. They didn't give them the money to support the vanity of the directors to expand into major routes, which frankly I think is a fools errand. Perhaps the government should have put some conditions on that money!

 

[travel_bug]

Yes but as we know the government gave REX the money because they regarded those regional routes as essential. They didn't give them the money to support the vanity of the directors to expand into major routes, which frankly I think is a fools errand. Perhaps the government should have put some conditions on that money!

In Rex's own statement, the (most recent) funds are governed by a Commonwealth Grant Agreement. Whilst the requirements can vary from agreement to agreement, for this grant, Rex have disclosed that the agreement only covers the following:

Under the Grant Agreement, Rex will receive funding to operate 1-2 return services a week to most destinations on the Rex network.

Media Releases

rex.com.au

It could then be reasonably assumed that through the process, Rex would be expected to provide evidence as to where the funds have been sent to demonstrate compliance with the agreement.

 

[dajop]

Yes but as we know the government gave REX the money because they regarded those regional routes as essential. They didn't give them the money to support the vanity of the directors to expand into major routes, which frankly I think is a fools errand. Perhaps the government should have put some conditions on that money!

Rex didn't receive the full $198m. QF Link, VARA and various other regional airlines (I think it was mentioned the number that shared in the funding was 12) also received portions of that money,

That aside, the money they received is to keep regional routes in operation whilst they are not commercially viable. There is a cost of running planes with only a handful of passengers on board. No private company is going to continue to run these services at a loss over an extended period of time. The expansion into major routes seems to be investors outside the company, Rex states that " .... it has been approached by several parties interested in providing the equity needed for Rex to start ...:", not tapping into existing assets of the company but new equity. I agree if VA2 emerges it is a fools errand. If VA disappears completely, then it is probably the quickest way investors to set up a viable alternative carrier to co-exist with QF in a cosy duopoly.

 

[33kft]

There's nothing wrong with government maintaining marginal regional routes. Saying there's no room for government intervention in the market, then gifting millions to a company run by a mate is a scandal.

Except that is complete hyperbole. This isn't "giving money to a mate", this is giving concessions to a company that operates those unprofitable regional routes with conditions attached. This is not to help one company, this is to ensure equity between metropolitan routes which are well serviced and rural routes which are not. There is no obligation to help one, help all. If VA want that money, perhaps they can pivot to being a rural carrier? I for one am extremely happy that government funding or concession (and by extension, our tax revenue allocation) is on a case by case basis with consideration given to return on investment. If one of the operators in a market is not helped because they were poorly governed, marginally feasible or the return on investment is below threshold, that is squarely the fault of the company's administrators and not an automatic case to open the taxpayer's wallet.

 

[dajop]

There's nothing wrong with government maintaining marginal regional routes. Saying there's no room for government intervention in the market, then gifting millions to a company run by a mate is a scandal.

It would be a scandal if the company run by a mate was the only one to receive such funding. But 11 other carriers also received such funding. Does that make it a scandal?

Whilst I don't like him, I can understand that foreign orange man's frustration, there is so much fake news (skewed to support the viewpoint of the author) that the truth is really hard to access.