Virgin Australia Financially Secure? [Now in Voluntary Administration]

[andrewpf]

I really question how any international flights into or out of Australia will remain viable for any airline until the situation resolves?
- Australian Government is advising its citizens to reconsider all overseas travel
- Australian Government is imposing 14 day quarantine on all arrivals (including crew??)

Surely that's a recipe for pretty much every airline to halt international flights?

 

[HS-TQE]

Related: AA cancelling SYD-LAX until May. UA will do it's usual seasonal cut-backs on SYD-LAX. Wonder what DL/VA will do.

American Airlines restarts Sydney flights

The Qantas partner and Oneworld member will once again fly daily between Sydney and Los Angeles.

www.executivetraveller.com

 

[Saab34]

Perhaps just offer a daily LAX service from Sydney and funnel the pax around the domestic. Delta could cancel and push the pax over. One flight a day will maintain the whatever Corp traffic and leisure pax that are still going.

NZ flights are obviously dead.

Bali might still operate. People are still going there it seems. The bogans will be more than happy to take another 2 weeks off work on return.

 

[pauly7]

Perhaps just offer a daily LAX service from Sydney and funnel the pax around the domestic. Delta could cancel and push the pax over. One flight a day will maintain the whatever Corp traffic and leisure pax that are still going.

NZ flights are obviously dead.

Bali might still operate. People are still going there it seems. The bogans will be more than happy to take another 2 weeks off work on return.

No corporate will be able to get travel insurance anymore ( to cover corona) which means that is gone for the time being.

 

[Melburnian1]

No corporate will be able to get travel insurance anymore ( to cover corona) which means that is gone for the time being.

And much leisure travel will collapse, with the exception of people who really want to go to a funeral of a close relative or friend, or other important event.

But I don't have a problem with the measures as they're based on medical advice.

 

[Harthagan]

How long is this likely to last? What can people with international virgin flights do to get their money back?

 

[andrewpf]

How long is this likely to last? What can people with international virgin flights do to get their money back?

It will last for as long as the Government thinks it needs to last ... the PM suggested potentially 6 months.

In terms of Virgin, their website (No change fees on domestic and international bookings) says:
"To provide you with flexibility for your travel plans we're waiving change fees* on domestic and international bookings for travel between 15 March 2020 and 30 June 2020. "

They also say " We are aware of new travel restrictions announced by the Australian Government and are assessing our response. We understand these restrictions may affect our guests' travel plans and are working on how we can best support them. "

 

[pauly7]

How long is this likely to last? What can people with international virgin flights do to get their money back?

If I were you - get yourself to the front of the processing queue, they are going to be overwhelmed with cancellations.

 

[Marty_]

I thought VA would become financially viable, but I would not be surprised if this crisis bankrupts them. Time to spend Velocity points quickly.

I am a little worried as I am in the USA until March 23. It'll be horribly inconvenient for me to return sooner, but it looks as if I risk being stuck here if I don't. They'll hardly run empty planes.

 

[Melburnian1]

I thought VA would become financially viable, but I would not be surprised if this crisis bankrupts them. Time to spend Velocity points quickly...

Many will agree with you, as the monthly cash burn (even if it has A$900m in available funds) must be significant.

Whatever, I just hope no Australian Government decides to throw good money after bad at any airline. Qantas asked for a bailout some years ago, and then made good profits, so that would have been a waste of government funds. This situation differs but the same result of wasting scarce taxpayer dollars would result. Nor would it 'save' any teetering airline.

 

[Must...Fly!]

It will last for as long as the Government thinks it needs to last ... the PM suggested potentially 6 months.

In terms of Virgin, their website (No change fees on domestic and international bookings) says:
"To provide you with flexibility for your travel plans we're waiving change fees* on domestic and international bookings for travel between 15 March 2020 and 30 June 2020. "

They also say " We are aware of new travel restrictions announced by the Australian Government and are assessing our response. We understand these restrictions may affect our guests' travel plans and are working on how we can best support them. "

This is the travel agent document which lays out what your rights are. Might help. https://www.virginaustralia.com/cs/...ntent/~edisp/comm-policy-coronavirus-v4.2.pdf

 

[pauly7]

I thought VA would become financially viable, but I would not be surprised if this crisis bankrupts them. Time to spend Velocity points quickly.

I am a little worried as I am in the USA until March 23. It'll be horribly inconvenient for me to return sooner, but it looks as if I risk being stuck here if I don't. They'll hardly run empty planes.

It’s a tough one I’m afraid, I just helped get a friend back from LAX - they cut short their holiday - they made the call they didn’t want to risk being stranded in the US for any longer than they had to be.

They also said things were starting to get a little stir-crazy in Cali, and unlike here people carry weapons and they felt it wasn’t quite the place they wanted to be in a high pressure high stress situation.

Edit - they booked onto Qantas and I’m unsure what $ back they will get from VA it all happened very quickly.

 

[pauly7]

Many will agree with you, as the monthly cash burn (even if it has A$900m in available funds) must be significant.

Whatever, I just hope no Australian Government decides to throw good money after bad at any airline. Qantas asked for a bailout some years ago, and then made good profits, so that would have been a waste of government funds. This situation differs but the same result of wasting scarce taxpayer dollars would result. Nor would it 'save' any teetering airline.

Suspect industry ‘relief’ will follow but I also think the government would be very reluctant to sink actual cash into any airline, they have a lot of industries that would want similar.

I think VA would be told to go back to their parents for money first.

 

[Must...Fly!]

Many will agree with you, as the monthly cash burn (even if it has A$900m in available funds) must be significant.

Whatever, I just hope no Australian Government decides to throw good money after bad at any airline. Qantas asked for a bailout some years ago, and then made good profits, so that would have been a waste of government funds. This situation differs but the same result of wasting scarce taxpayer dollars would result. Nor would it 'save' any teetering airline.

Reality is if this gets as bad as many expect, Qantas nor Virgin will have the capability to get through this without government help. But it doesn't have to be taps of liquidity from the government in to the airline. There are plenty of things the government can do to protect the airlines, and ultimately the jobs and working people within them, without cash.

 

[I love to travel]

Would virgin be better off just flying the golden triangle for the next 3 to 6 months and ground all other planes. Obviously this would coincide with a commensurate laying off of staff etc.

 

[Must...Fly!]

Would virgin be better off just flying the golden triangle for the next 3 to 6 months and ground all other planes. Obviously this would coincide with a commensurate laying off of staff etc.

I think too extreme. Those in remote areas (e.g. NW WA) will still need to fly, Perth will still need links with the east coast.

There needs to be serious discussion about how Velocity cash is used, how to restrict outflows from there, and how Qantas and Virgin could work together for the betterment of the industry as a whole. I know it's strange times but it will probably require strange solutions.

 

[Mogul]

I don't believe the Government would let VA fail in the current climate. VA's domestic business was profitable.

QF are significantly more exposed in the current situation.

 

[dajop]

I think VA would be told to go back to their parents for money first.

Somehow I don't think their partners will be any position to bail out VA. Even SQ will be lucky to survive this without some form of assistance, and EY were already a basket case and let’s not even think about Hainan or their other Chinese investor.

 

[Harthagan]

Forgive the very basic question but is the reason why the airlines are so vulnerable due to the inherent massive overhead costs?

I would have thought if they just stop flying the planes that would cut their costs enough to at least not go broke in a matter of months. Is their no leeway in times like these with leases on aircrafts and airport terminal related costs?

 

[Must...Fly!]

One could make an argument that a full takeover bid from EY being the most likely outcome.