Virgin Australia Financially Secure? [Now in Voluntary Administration]

[justinbrett]

Virgin Australia might have some foreign owners but think about:

Where are the staff employed? Mostly Australia.
Routes flown? Mostly within Australia with some Pacific and a few long haul.
If profitable in the future, where are company taxes paid. To Australia.
Where is payroll tax paid? Australia.
Where is the income tax paid for most of its employees? Australia
Where are most of its subcontractors, and their staff and other business partners based and operating? Australia.
Airport owners? Mostly Australian companies (although I doubt the government is super concerned about them).
Aeronautical and security charges charges? To the Australian government.
Who benefits from competitive airfares? Australian people, and the local tourism industry in particular.
Charter business? Mostly Australian resource projects.
Velocity partners? Australian companies like Coles a few Banks, Hertz, Thrifty etc

Plus the undeniable elephant in the room that (sure VA are a bit of a mess), they are the only competitor to the Qantas group so waving through a massive monopoly on such a capital intensive highly regulated, specialised, and vital part of the transportation economy would be a massive drain on the economy.

I think owning an airline or two would be the very last resort of the current federal government, but they would certainly be open to the idea of giving some sort of assistance and relief for airlines so they at least have the time to restructure themselves and survive so that once the COVID-19 issue is over we still have a way of getting around the country.

Completely agree with your post, apart from the last paragraph. I don't think the government will let the airline fold for the reasons you state (an as a loyal customer myself, I don't want Virgin to fail. When Ansett failed Qantas prices and cost cutting went up and the quality went down). There is a question on how that would happen - the government certainly doesn't want to run an airline but that's quite different to getting shares back in return for a large investment. In the face of the likely dire economic situation, many companies won't be saved. Many jobs will be lost. The government will have to be selective on where it spends its money. The optics of handing it to a foreign owned company would be toxic (it's not "some" as you say, it's over 90%!). So sure, save the furniture, but repossess the house as you do. Exactly what happened to Air New Zealand.

 

[hydrabyss]

Sky News Extra 8:16pm

Virgin ceo talks impact on aviation sector

 

[Captain Halliday]

Are people emptying their VFF accounts?

If the ~25 alerts I’ve had from Ozbargain today about people selling VFF points is any indication, then absolutely yes.

Until about ten days ago, I’d only see about one alert per week from a VFF points seller.

 

[daft009]

If the ~25 alerts I’ve had from Ozbargain today about people selling VFF points is any indication, then absolutely yes.

Until about ten days ago, I’d only see about one alert per week from a VFF points seller.

Yeah but the people here know what they are talking about when it comes to our favourite game

 

[ja1]

If people were selling VFF points at a steep discount I'd love to know about it - or are you seeing alerts but they're getting normal valuations on points ?

I can see planning a J trip on VA sometime in 2021..

 

[ja1]

Sky News Extra 8:16pm

Virgin ceo talks impact on aviation sector

I had a listen to the PS interview (unless he was giving multiple interviews) and he came across as pretty balanced:

- VA actively doing what it can to cut expenses
- Yes they are going to have to make staff redundant but they are trying hard to minimize that
- Staff have responded within the group to keep their jobs by taking leave, LWOP, going part time and job sharing
- Government has made a (good) start and is still talking to them about support so that's encouraging that they aren't getting cut off at the knees (which seems likely in an Abbott/Hockey situation if this had happened a few years ago..)

I'd feel sorry for him except that well, this is the job he wanted and I have to assume he's good at what he does and we'll measure that by seeing how VAH goes (and we have AJ to compare against).

 

[jase05]

If people were selling VFF points at a steep discount I'd love to know about it - or are you seeing alerts but they're getting normal valuations on points ?

I can see planning a J trip on VA sometime in 2021..

You do know that selling points is not allowed and can result in your account being suspended or closed

 

[pauly7]

Agreed. Why does everyone seem to assume they will still be sitting pretty after all this is over? Can't think of too many airlines that are likely to be affected worse!

I agree with you they will be severely impacted with no ‘domestic’ to keep them going - although early signs are China, South Korea, Singapore have handled it well and are coming out of it now...

But we also know how important SQ is to Singapore. We also know who owns the business. We also know their style of government so I’m comfortable saying that regardless of what happens a form of SQ will exist because significant government intervention is almost a given.

 

[Max Samuels]

My travel agent reckons only week until it collapses but I sincerely hope not. I don't understand how they are worse off than QF who has bigger fixed costs with its international fleet - which are all grounded - and they both have about 50% of the domestic market....

Hopefully this time Johnny Howard's replacement won't let the airline just die like he did with Ansett. Man I hate what that guy did.... I remember him drooling "the gonvernment can't step into save failing companies", unless of course it is mates...

 

[Must...Fly!]

https://www.virginaustralia.com/cs/groups/internetcontent/@wc-salesagenthub/documents/webcontent/~edisp/comm-policy-coronavirus-v10.1.pdf

Guests are not automatically eligible for a refund.

For international flights cancelled/suspended by Virgin Australia or VA* (codeshare partners – 795 tickets) the below options can be offered to guests:

o Option 1: Date & Destination Changes (waive change fees - charge fare difference). Multiple changes allowed.

o Option 2: Cancellation to Open Ticket with cancellation and reissue fees waived

o Option 3: Guests can also submit a request to their Agent for other options. The Agent can then submit the request to Virgin Australia here to discuss what options are available (however any request for a refund will only be considered on a case by case, exceptions basis).

Please note that due to large volumes of requests being received, we are unable to provide a response time for Agent queries at this stage.

I wonder where the ACCC stand on this. Hopefully they understand the situation airlines are in - this isn't good for anyone but refund en-masse will send both airlines in to an absolute nose dive.

 

[AIRwin]

https://www.virginaustralia.com/cs/groups/internetcontent/@wc-salesagenthub/documents/webcontent/~edisp/comm-policy-coronavirus-v10.1.pdf

Same as QF?

 

[ja1]

You do know that selling points is not allowed and can result in your account being suspended or closed

I think everyone 'knows' this.

I should point out I am not selling any points..

Other things that aren't allowed:

- You can't share travel bank credits
- You can't travel on a ticket without it being in your name
- You can't change seats on a plane to sit in a non assigned seat
- You can't take more than 5kg ? 7kg of hand luggage
- You cannot sit in the exit row unless you are willing and able to assist in the event of an emergency...

There are lots of things that are 'not allowed' but they do happen in real life..

 

[Must...Fly!]

Same as QF?

Absolutely - not unique to VA - just making the point.

 

[AIRwin]

- You can't share travel bank credits

Travel credits cannot be exchanged for cash and are non-transferrable to another person. However, you may use your travel credits to purchase an eligible flight or holiday package for another person.

 

[adrenaln]

Virgin Australia might have some foreign owners but think about:

.......

Well said by someone who clearly gets it!!

 

[jpp42]

I'm trying to cash in my Velocity points to gift cards as I'm not sure I believe VA and my points will last the next few weeks. Even if they do restructure somehow, points are likely to be heavily devalued in some way.

I've been trying all morning and am unable to check out on the Velocity shopping site - "We could not retrieve your Velocity Points balance at this moment. Please try again later." A normal glitch due to high volumes? Or I wonder if they've already blocked people spending their points this way, to slow down the cash bleeding?

 

[Must...Fly!]

Try clearing cookies or using incognito mode in your browser.

I suspect it requires man power to process these redemptions and that may be why, if Virgin have interfered with the process, you can't go ahead. Staff are flat out dealing with passengers for this week at least.

 

[jpp42]

Try clearing cookies or using incognito mode in your browser.

I suspect it requires man power to process these redemptions and that may be why, if Virgin have interfered with the process, you can't go ahead. Staff are flat out dealing with passengers for this week at least.

I was under the impression that Velocity Frequent Flyer is a separate business unit and would have separate staff, or even outsourced their shopfront web site to a third party service provider. I don't think that buying gift cards is going to distract reservations staff who are flat-out. I am just trying to hedge against losing all my points (100k) due to a Virgin insolvency or restructure - yes I know that gift cards aren't the most cost effective use of the points, but it's not terrible either.

 

[Must...Fly!]

I was under the impression that Velocity Frequent Flyer is a separate business unit and would have separate staff, or even outsourced their shopfront web site to a third party service provider. I don't think that buying gift cards is going to distract reservations staff who are flat-out. I am just trying to hedge against losing all my points (100k) due to a Virgin insolvency or restructure - yes I know that gift cards aren't the most cost effective use of the points, but it's not terrible either.

Perhaps it is normally done by a team in the Philippines. Or it's just a technical hiccup

 

[jakeseven7]

Virgin Australia might have some foreign owners but think about:

Where are the staff employed? Mostly Australia.
Routes flown? Mostly within Australia with some Pacific and a few long haul.
If profitable in the future, where are company taxes paid. To Australia.
Where is payroll tax paid? Australia.
Where is the income tax paid for most of its employees? Australia
Where are most of its subcontractors, and their staff and other business partners based and operating? Australia.
Airport owners? Mostly Australian companies (although I doubt the government is super concerned about them).
Aeronautical and security charges charges? To the Australian government.
Who benefits from competitive airfares? Australian people, and the local tourism industry in particular.
Charter business? Mostly Australian resource projects.
Velocity partners? Australian companies like Coles a few Banks, Hertz, Thrifty etc

Where do Virgin send all of their profits? Not Australia.
Wait... hang on
What profits

I think owning an airline or two would be the very last resort of the current federal government, but they would certainly be open to the idea of giving some sort of assistance and relief for airlines so they at least have the time to restructure themselves and survive so that once the COVID-19 issue is over we still have a way of getting around the country.

Been said before on here is that Govt might throw a failed VA to QF to operate for a skeleton version for period of time then sell. Could happen.