Virgin Australia Financially Secure? [Now in Voluntary Administration]

[jase05]

Sounding more and more like Bain will get the nod

 

[Bell21]

what's your thought process on that?

 

[antycbr]

what's your thought process on that?

Media are in agreement:
Bain ready to land Virgin: insider claims

 

[straitman]

Media are in agreement:
Bain ready to land Virgin: insider claims

Subscription needed.

 

[antycbr]

Subscription needed.

I am conscious of copyright. Summary of key points:


Bain has the funds to complete the sale with $25bn whereas Cyrus are still scrambling to find it; deep investment into tech to bring up to the QF level and detailed research from Bain Consulting down to the route level plus 6000 VA customers surveyed are all seen as key benefits of the Bain bid.

Branson is expected to chip in for a 10% stake.

 

[melb78]

hopefully its just all talk but in saying Bain has more money than Cyrus has and it can inject a lot more as well.

 

[jakeseven7]

I am conscious of copyright. Summary of key points:


Bain has the funds to complete the sale with $25bn whereas Cyrus are still scrambling to find it; deep investment into tech to bring up to the QF level and detailed research from Bain Consulting down to the route level plus 6000 VA customers surveyed are all seen as key benefits of the Bain bid.

Branson is expected to chip in for a 10% stake.

I think I may have done their survey! I just thought it was QF doing a market survey...

Tech? Maybe Bain will build VA a website and an app that actually works

Any mention of Star Alliance?

 

[TheInsider]

Any mention of Star Alliance?

hahaha!

 

[oz_mark]

Media are in agreement:
Bain ready to land Virgin: insider claims

Given the media didn't even pick Cyrus in the race until the shortlist came out, I suspect Cyrus are just holding their cards closer to their chest.

Having said that, Bain do seem to be throwing more money at it....

 

[desafinado74]

It would be interesting if Bain gets the backing of the administrators , but the unions reject them,....

 

[Harthagan]

In splendid isolation in Perth and finally its looking like travel to the NT Darwin for the rest of the dry season without 2 weeks locked up is going to happen. by the time I want to return to WA in September they will surely have opened borders as well. After all WA and NT have had the best lockdown in all this.
Virgin doesn't look like getting its act together by 17 July and actually have Perth-Darwin flights (not going via Brisbane or Sydney at great expense) so for the first time in a very long time looks like its Q...horror!

According to the latest email from virgin it doesn't look like they are flying to Darwin at all, even from Brisbane or Sydney.

 

[Nathant123]

I haven't really been following this too closely but when does it all wrap up and we have an idea of the outcome of VA? I'm still curious what will happen to Velocity and points balances. Suppose no one really knows yet.

 

[oz_mark]

I haven't really been following this too closely but when does it all wrap up and we have an idea of the outcome of VA? I'm still curious what will happen to Velocity and points balances. Suppose no one really knows yet.

Final bids are due Monday. Pick someone by the end of the month, then the creditors meeting in August.
I
Velocity isn't in administration, so I guess the points won't go away - but whether the value of them changes remains to be seen. I have only seen commentary from both sides talking about better integration, and investing in the platforms, so only really strategic business level stuff....

 

[Melburnian1]

Final bids are due Monday. Pick someone by the end of the month, then the creditors meeting in August.
I
Velocity isn't in administration, so I guess the points won't go away - but whether the value of them changes remains to be seen. I have only seen commentary from both sides talking about better integration, and investing in the platforms, so only really strategic business level stuff....

It's not in a bidder's interest to discuss any negativities, particularly publicly. I suppose it's called 'keeping items close to one's chest.'

And as drron pointed out, the creditors owed the most - which isn't the (former) staff - may be critical to the process.

Post automatically merged: Jun 20, 2020

..Any mention of Star Alliance?

In the numerous media articles I've read in print or viewed online, I don't recall one reference to any airline alliance. A good point that it's escaped journalists' notice.

 

[eastwest101]

Subscription needed.

I think the comments from CAPA Peter Harbinson were the most interesting - summarized here:


Centre for Asia Pacific Aviation executive chairman Peter Harbison said the airline model most likely to succeed in the Australian market would not try to compete with Qantas at the high-end corporate level.

“They’ll have something like a business class but they won’t go for the super luxury,” “They’ll have the basic lounge and a lot less frills and that will appeal to the bean counters because we’re not just talking about a pandemic now, we’re talking about a recession.”

Dropping the big wide-body aircraft in favour of an all Boeing 737 fleet also made a lot of sense, “No matter what happens, I think Virgin is going to have to absorb a bit of pain in the short term and if they’re not projecting that in their calculations I’d be concerned,” he said.

As for the government’s criticism of the administration process, with senior ministers unhappy with the short-listed bidders, Mr Harbison said Mr Strawbridge should be relieved. “Unions and government have basically destroyed the aviation industry in Australia for 75 years and in tangible terms,” Mr Harbison said.


Interesting that Bain think that IT and big data is the solution to VA's profitability problem, wheras most pundits point the finger at poor aircraft leasing decisions, disjointed ownership and lack of focus, the Covid-19 shutdown obviously and less profitable VAi division and Tigerair as being the culprits of a business that was too complicated with too many things and too many unnecessary duplicated parts. Journalists just guessing at the moment with administrators, bidders and other interested parties all in to muddy the waters and serve their own agenda.

Its a terrible process but at least people are thinking about exactly what VA2's potential place will be in the market if it relaunches, I think rebranding is out in the short term because a rebrand is an indulgence in costs of liivery/new uniforms and signage that just isn't important now, its all a matter of getting the travel and airline industry back on its feet and profitable in the short term, surviving an onslought from Qantas?Jetstar who have every reason to try to put you out of business permanently, maybe leave the rebranding to whomever they sell the business off to next?

Fleet simplification and reversion back to the profitable parts of the business of VA domestic flying B738s seems to be a common theme for all pundits and all potential bidders, but they have got to be careful to have the economy of scale and cash backing to compete and survive against Qantas/Jetstar. The whole Covid-19 timing was unfortunate because PS's plan to close TT, concentrate on B738s run A330s to Japan and Perth and the B777 to LA was actually the right plan, just implemented too late to avoid the debt and then the Covid-19 black swan event.

 

[p--and--t]

Whenever I reflect on VA / TT, I keep thinking that as soon as it moved away from its original concept of DJ, it just became a series of unsuccessful attempts at "me too" that it couldn't afford or were executed very clumsily without a view to sustainability. A bit like trying to "keep up with the Jones'" when you are on the dole.

 

[jase05]

Any mention of Star Alliance?

Please no

 

[oz_mark]

Interesting that Bain think that IT and big data is the solution to VA's profitability problem, wheras most pundits point the finger at poor aircraft leasing decisions, disjointed ownership and lack of focus, the Covid-19 shutdown obviously and less profitable VAi division and Tigerair as being the culprits of a business that was too complicated with too many things and too many unnecessary duplicated parts. Journalists just guessing at the moment with administrators, bidders and other interested parties all in to muddy the waters and serve their own agenda.

I think Bain see IT as an area where there could be a lot of benefits going foward. That doesn't mean that the leases and what not don't need to be dealt with.

Covid-19 black swan event.

More of a grey rhino event IMHO.

 

[HS-TQE]

I think I may have done their survey! I just thought it was QF doing a market survey...

Tech? Maybe Bain will build VA a website and an app that actually works

Any mention of Star Alliance?

In the numerous media articles I've read in print or viewed online, I don't recall one reference to any airline alliance. A good point that it's escaped journalists' notice.

Airline alliances in general seems to have just as many members exiting as the 'few' that are entering. Likely that the FSC Alliances in general will go into another stagnant/slight decrease phase for the foreseeable future.

It would be at the very very very bottom of Bain or Cyrus' priorities (if at all).

Heck, the general public is still yet to know whether the tyre kickers (and former shareholders) SIA and Etihad Group are to pen a new partnership agreement. Ditto the partnership with DL.

 

[Must...Fly!]

Well the lounges could not really be any further bare bones than they already are so they have that covered.

Closing the lounges (at least the capital city ones) would be silly. If you were to do that there is probably no point at all in spending money and buying the airline. What would you be buying exactly?