Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Bagpuss]

FYI, I’m pretty sure Qantas are due to release their latest results on Thursday this week.
Their results would good some level of insight of what to expect from Virgin.

 

[amaroo]

*zips up flame suit*

Anyone earning millions more points than they can't use........are probably better off with cashback or non-airline loyalty programs!

Life is one giant punt!

CC earning deteriorates (even more), ATO reverses years of total stupid ignorance on FF points/redemptions, CC/ATO ceases relationship, sickness, retirement, accidents, etc, etc, etc

Building and warehousing points/miles is risky, no matter what the balance.

No other loyalty programs interest me. Hotels that offer a public program - have nothing to interest us.

I'm only 52, so have many years of stockpiling and burning to go. We're a recent convert to SQ suites - booking full freight advantage awards will see a steady hand on the balance.

 

[Mattg]

My understanding is that velocity is a separate company to virgin Australia

Virgin Australia bought back the 35% stake that it had sold to Affinity Equity Partners, so it now owns 100% of Velocity again.

That said, I am no more or less comfortable holding Velocity points than I am holding points in any other frequent flyer program. I always try to avoid having a large balance of points with any airline because of the regular program devaluations and general inflation of points - but I don't see Velocity as particularly risky right now.

 

[p--and--t]

VA

Shares 0.13 (plus losses for 8 years consecutive)​

Closing HKG Route​

Closing CBR-PER​

Closing OOL-PER​

Closing SYD-CHC​

TT Closing ADL-BNE, PPP-SYD, BNE-DWN​

Ditched partnership with NZ​

​

Not a particularly good look.

Hopefully the new management has a strong hand on the tiller and will make the right moves so it not only muddles along but thrives. We don't need another Compass or Ansett in the archives.

 

[pauly7]

VA

Shares 0.13 (plus losses for 8 years consecutive)​

Closing HKG Route​

Closing CBR-PER​

Closing OOL-PER​

Closing SYD-CHC​

TT Closing ADL-BNE, PPP-SYD, BNE-DWN​

Ditched partnership with NZ​

​

Not a particularly good look.

Hopefully the new management has a strong hand on the tiller and will make the right moves so it not only muddles along but thrives. We don't need another Compass or Ansett in the archives.

To be fair, NZ ditched Virgin it wasn’t VA’s choice to be stranded with no trans tasman partner.

 

[HS-TQE]

To be fair, NZ ditched Virgin it wasn’t VA’s choice to be stranded with no trans tasman partner.

Or to be exact NZ/Luxon had dumped VA (& Borghetti/Other Shareholders) after having enough of the dysfunctional VA board room.
The drama between the former CEOs of NZ and VA have been outlined over the past 2-3 years.

 

[AustraliaPoochie]

Not sure, but with their flights to HKG soon to be cancelled for life, maybe their flights to HND, is a risk, but also there are opportunities with the ANA group, in the sense of revenue sharing possibilities, with more Japanese guests coming off ANA flights onto VA flights, and VA pax going onto ANA flights, within Japan.
Also, with PS probably taking a tougher hard line on the group, the VA group might be able to make a smallish profit down the track.
Air NZ is now off the FF books with VA, but there is still a small revenue share agreement, with VA putting pax onto Air NZ flights within NZ, so there might be a plus there, without any payments for co usage of Air NZ Koru lounges, and pax being put onto the Strata lounge at AKL (not as grand as the Koru, probably cost them less too).
Not sharing a louge at WLG and having their own "hidey" upstairs, maybe saves them some $ too.
I think BG and JB were a bit too ambitious in taking VA to too many places.
PS deciding to let a lot of the staff at TT also probably will save them a lot of $.
In the end, maybe its still a very hard road ahead for VA and TT overall.

 

[AustraliaPoochie]

My understanding is that velocity is a separate company to virgin Australia

But the private company that owned VFF has sold it back to VA for a large profit, 50 to 100 %.
Bought for Aud$300m, sold for Aud$750m I think.
That private equity firm is no longer the owner of VFF.
EDIT: scrub that, you are correct, VFF is still at the moment, owned by that private equity fund.
I thought I read that the private equity firm had sold VFF back to VA, but it turns out, ***not yet***.

 

[Mattg]

VA

Shares 0.13 (plus losses for 8 years consecutive)​

Closing HKG Route​

Closing CBR-PER​

Closing OOL-PER​

Closing SYD-CHC​

TT Closing ADL-BNE, PPP-SYD, BNE-DWN​

Ditched partnership with NZ​

​

Not a particularly good look.

Hopefully the new management has a strong hand on the tiller and will make the right moves so it not only muddles along but thrives. We don't need another Compass or Ansett in the archives.

I guess it depends how you look at it. It could be argued that now that VA has just axed its least profitable routes, they might start making money now and the share price could go up from here.

 

[jase05]

Hopefully profits soon

When Will Virgin Australia Holdings Limited (ASX:VAH) Become Profitable? – Simply Wall St News

 

[Deleted member]

I feel fine about my points.

I also do not have a Nuclear Fallout Shelter dug into the bedrock out the back.

Just call me less paranoid than some out there.

Even Paranoid’s have enemies !

Post automatically merged: Feb 19, 2020

Virgin as safe as Qantas. If Coronavirus drags out for 6 months or more, all international flights in trouble.

Post automatically merged: Feb 18, 2020

how can you hold points in a trust fund ? Thought it was only $$$ that can be held in trust ?

Many different types of assets can be held in trust .

 

[ozfflyer]

obviously peak hour domestic flights only hit will be because of economy & if you are a Holden car dealer, but assume most international tourists are pushed onto non-peak hour flights, by pricing, so would imagine there might be schedule changes between eg. 9am & 3pm Mon-Fri, Sat pm & Sun am, where number of flights will be reduced, eg. instead of every hour SYD/MEL, maybe every 90 mins & similarly across the domestic network?

How many international tourists combine OZ & NZ ? Might have small impact on TT flights perhaps ?

 

[ozfflyer]

s

Even Paranoid’s have enemies !

Post automatically merged: Feb 19, 2020

Many different types of assets can be held in trust .

sorry meant to say things like real estate, jewellery, businesses can be held in trust, but only tangible things. How do points get held in trust ? Ansett points held in trust wouldn't have meant much.

 

[Bagpuss]

VA

Shares 0.13 (plus losses for 8 years consecutive)​

Closing HKG Route​

Closing CBR-PER​

Closing OOL-PER​

Closing SYD-CHC​

TT Closing ADL-BNE, PPP-SYD, BNE-DWN​

Ditched partnership with NZ​

​

Not a particularly good look.

Hopefully the new management has a strong hand on the tiller and will make the right moves so it not only muddles along but thrives. We don't need another Compass or Ansett in the archives.

All airlines venture into new routes on the hope they will make a profit. If they aren't making a profit all airlines will close them.
Though these are direct flights and some were seasonal such as PER - CBR. You can still fly via another port IE PER - SYD - CBR (for really the same cost and earn more status credits and eligable sectors)

These losses ... Are they asset right downs and "one off charges" or haemorrhaging cash? I beleive it's the former.

 

[moa999]

While there are some one-offs in there, they haven't had a one off every year.

 

[HS-TQE]

It's not as if Virgin is doing any capital raising from its shareholder base.
The way an invstor makes a profit is by selling shares at a later stage at a higher price / holding onto the shares and being paid dividends.

The way VA shares are going atm, I think one of the 'major four' may fold in the medium term (next 18 months - 3 years) and sell at "a loss". It's a matter of who blinks first out of HNA, EY, Nanshan and SQ (from likely to least likey).

Although SQ are a reasonable chance considering they were involved in the VS and NZ (via the AN collapse) debacles of the early-mid 2000s.

 

[Bagpuss]

The way VA shares are going atm, I think one of the 'major four' may fold in the medium term (next 18 months - 3 years) and sell at "a loss". It's a matter of who blinks first out of HNA, EY, Nanshan and SQ (from likely to least likey).

Which is a loss for the investor, not for Virgin Australia.

 

[BCons]

Remember that hardly any of the Virgin Australia shares are actually traded on the sharemarket.

Think the free float of VA is approx 10% of issued share capital, so their share price is never going to be anything more than a depressed version of the company's value.. Following suspension of HK and given VA's LAX route generally understood to be profitable, they dont have Intl route exposure. Hv a look at domestic loads If you want an idea of VA (and QF) viability.

go here : Australian Domestic Aviation Activity Monthly Publications

 

[HS-TQE]

Been reports that the Chinese government may take over HNA to effectively liquidate the airline group. CA is emerging as the party to take over HU's mainline operations, while the wholly owned subsidiaries will be sold off to MU and CZ.

CA also rumoured to be the 'new' "accidental" owners in HNA's stakes in VA and HX. I suspect CA will want to offload the VA and HX stakes (assuming HX doesn't get liquidated beforehand) due to CA's interest in HX's major rival.

Source: HNA set to be sold to the Chinese Government (to liquidate)

 

[Quickstatus]

VA

Shares 0.13 (plus losses for 8 years consecutive)​

Closing HKG Route​

Closing CBR-PER​

Closing OOL-PER​

Closing SYD-CHC​

TT Closing ADL-BNE, PPP-SYD, BNE-DWN​

Ditched partnership with NZ​

​

Not a particularly good look

why?
The first step to profitability is to stop haemorrhaging cash on poor yield routes.