Virgin Australia Financially Secure? [Now in Voluntary Administration]

[jakeseven7]

The Air NZ bustup was a result of "too many cooks" in the kitchen. Also didn't help with the ongoing 'battle of the egos' between Luxon and Borghetti, and Luxon finding out he was the "third wheel" in the dysfunctional VA boadroom arrangement (wasn't in the 'circle of power') with many other airlines on the shareholding register.

Very OT: But I think Luxon with benefit was 100% right. VA1 should have focused on being a profitable domestic airline, strong good alliances with feeder international partners like NZ and left it at that. I'm sure he is smoking a cigar with a cognac somewhere enjoying the show...

 

[HS-TQE]

Don't get me wrong, Luxon had strong points. Problem was that there wasn't room for "two huge egos" in the dysfunctional VA board.

The alleged accusation reported in the newspaper in regards to Luxon's alleged comment that they should "close VA's international operations" in favour of being a NZ feeder was supposedly the tipping point (enough is enough) for the other shareholders considering their alleged dislike for Luxon as well.

Saying all that, Luxon was right to get NZ out whilst he could, and whilst he's no longer running NZ. He's probably enjoying a cigar watching the VA administration circus.

 

[Melburnian1]

If it's J, then probably a European style J class maybe?

Just with that sub-fleet there if it were to be the case, would incur significant additional costs. Everything would need to be streamlined, one way or another. From a cost and operational perspective you can't have different configurations on the same fleet.

Fair points, but plenty of surface travel operators have dedicated fleets for specific routes and it works well, provided they have a sufficient ratio of spare rollingstock/vehicles so that when maintenance is required or there are failures, any such shortages can be covered.

I know you'll say 'airlines are not surface transport' or 'if an airline wants a plane to do a short sector like SYD-MEL and then across to PER, it's inefficient to not do that' but the airlines have years of data on load factors. The principles are similar.

If there's demand for MEL-PER of say half a dozen flights six days a week each way and three or four on Saturdays, then if occasionally the dedicated aircraft has to work MEL up to SYD, business class passengers get a bonus and perhaps a small number of economy class passengers (if the flight was full, not always so) may have to be rebooked on another flight.

I don't believe VA will be reincarnated but were it to be, if its owner decided it needed to be more competitive on the PER routes to/from east coast Oz, then a better business class may be justified.

 

[jakeseven7]

I don't believe VA will be reincarnated but were it to be, if its owner decided it needed to be more competitive on the PER routes to/from east coast Oz, then a better business class may be justified.

For who though is the question I guess? Domestic trans-con business class is for corporates predominantly - a market VA2 is marked by both Bain and Cyrus to move away from, moving to smaller more price conscious businesses.

Based on what both Bain and Cyrus I'd be surprised if they bothered with a lie-flat/flatbed domestic offering anywhere. Just spruced up recliners would probably suit their new target.

Honestly flatbeds on trans con for both QF and VA were always way over specced (although lovely).

 

[SheikYerbouti]

Losing J wouldn't bother me, an extra 4 rows of Economy X would still allow the option for something a bit nicer. As people have said, with most flights being under 2.5 hrs its not that big a deal. I hope VFF remains with Lounges, luggage perks, and priority check in stays though, those 3 things are what I focus on for travel, the seats are no big deal.

 

[BNEFlyer]

Losing J wouldn't bother me, an extra 4 rows of Economy X would still allow the option for something a bit nicer. As people have said, with most flights being under 2.5 hrs its not that big a deal. I hope VFF remains with Lounges, luggage perks, and priority check in stays though, those 3 things are what I focus on for travel, the seats are no big deal.

If Cyrus are successful I don't think we'll see much, if any change to what VA currently offers. Though without Tiger they might decide to include a 'basic' or cheaper Y type fare to attract those passengers?

 

[Melburnian1]

'The Australian' on Wednesday 17 June has a very lengthy article (repeating how Deloittes want an extension of JobKeeper beyond September) that has a large table showing the differences in the Bain and Cyrus bids. It asserts that only Bain has a large amount of ready capital, but Cyrus is arranging this.

At the end, in two paragraphs, stockbroker Morgans (Brisbane) is quoted suggesting it doesn't have access to the data room and that it had yet to form a view on which bidder was preferable. The article also says bondholders may receive less than 10 cents in the dollar.

The latter will mean liquidation in my view. But we'll have to wait and see.

 

[Dee#]

While I am virgin platinum looking like I will have to shift travel to Q. If they go downhill. My partner has a bad back and the J flats were marvelous.Also love economy X leg room. But when they split with air NZ made one world and Q look more attractive for international when it is safe to move again.

 

[deepblerg]

Are there any known connections between Cyrus and Akbar Al Baker? Was QR ever involved in flybe? After Qatar's status match move and increased flight frequencies to AU could we see a potential VA2 QR partnership to replace the EY partnership?

 

[jakeseven7]

Are there any known connections between Cyrus and Akbar Al Baker? Was QR ever involved in flybe? After Qatar's status match move and increased flight frequencies to AU could we see a potential VA2 QR partnership to replace the EY partnership?

Lol and VA2 joins one world

Well Cyrus keep saying they have a secret airline partner/s in the wings so wonder who it is....

 

[BNEFlyer]

Are there any known connections between Cyrus and Akbar Al Baker? Was QR ever involved in flybe? After Qatar's status match move and increased flight frequencies to AU could we see a potential VA2 QR partnership to replace the EY partnership?

I wouldn't read anything into that. The QR status match wasn't just for Velocity members, TK, EY, SA, SQ and EK FF's could also apply.

The QR flight increases are because of repatriation and cargo. And there's been no indication the partnership with EY (and SQ and DL) won't be around after administration.

 

[BNEFlyer]

Two employee unions are backing Cyrus, one yet to decide between Bain and Cyrus. It's seeming more likely that Cyrus will be successful. Union support rallies around Branson-linked Virgin bidder Cyrus

 

[jase05]

I think many would prefer Cyrus but their finances worry me a bit. Bain look to have a lot more money up their sleeves to cater for a rainy day.

 

[oz_mark]

Two employee unions are backing Cyrus, one yet to decide between Bain and Cyrus. It's seeming more likely that Cyrus will be successful. Union support rallies around Branson-linked Virgin bidder Cyrus

While the unions are an important bunch to get on side, due to their numbers, they aren't the only lot. Balance between staff and other creditors may be tricky to find...

 

[Melburnian1]

While the unions are an important bunch to get on side, due to their numbers, they aren't the only lot. Balance between staff and other creditors may be tricky to find...

The media says little (because it knows little) about the role of the unsecured bondholder creditors owed about A$2 billion. They're important.

In the end the unions will not be important, as by value their members' 'votes' count for little.

 

[HS-TQE]

I wouldn't read anything into that. The QR status match wasn't just for Velocity members, TK, EY, SA, SQ and EK FF's could also apply.

The QR flight increases are because of repatriation and cargo. And there's been no indication the partnership with EY (and SQ and DL) won't be around after administration.

I don't think any of the two parties have indicated which (existing) partners will be involved in VA mk2 in the future. EY and SQ also have been "tyre kickers" throughout the administration process, so there's no guarantee that their partnership will be renewed in the 'new' VA mk2.

 

[MooTime]

I don't believe it matters much if Cyrus has $7B FUM & experience in Aviation or Bain has $100B FUM, aslong as both have the $3-$4B or whatever the final ticket price is then it comes down to who will save the most jobs (union vote) & deliver the better VA2 version.
IMO that clearly seems to Cyrus, so much we don't know behind closed doors of course, but Cyrus seems more likely atm & my preference. Also that they'll keep Scurrah as CEO i see as smoother transition.

 

[HS-TQE]

According to today's Australian. Bain & Cyrus have both confirmed in the article that Tigerair will be formally wound up and disbanded under either's ownership.

 

[BNEFlyer]

I think many would prefer Cyrus but their finances worry me a bit. Bain look to have a lot more money up their sleeves to cater for a rainy day.

Not much point having money for a rainy day if they don't keep the airline operational, or keep it at all.

 

[drron]

I believe there are 9020 employee creditors owed 451 million.There are now 6000 individual bondholders owed around 2 billion.And initially there were 1200 other creditors owed 4.3 billion.
So the employees would have to get 80% plus of the employees to vote to be sure to win the vote on numbers but no way can they win the vote on amount owed.