Virgin Australia Financially Secure? [Now in Voluntary Administration]

[get me outta here]

I just tried to log into virgin and could not get in at all. Is it completely off the air now?

 

[oz_mark]

I just tried to log into virgin and could not get in at all. Is it completely off the air now?

Seems Velocity is down - but then it wouldn't be the first time..

 

[Scr77]

I just tried to log into virgin and could not get in at all. Is it completely off the air now?

seems ok now.

 

[tomlee1986]

It’s fine now

 

[drron]

I can tell you now that this is more than "just a virus". As a human race we have no immunity to the virus and its "slippery" nature is making it difficult to contain. This virus literally clogs your lungs, suffocating you to death. If you are after proof, ask me, I'm on the frontline.

International travel is going to be severely affected until an adequate preventative measure is developed.

I'm also on the frontline and you are way too pessimistic.
The Spanish flu was also a virus humans had no immunity too nor any hope of treatment or vaccine then.
The economy collapsed for a short time and then the world held a party like never before with a booming economy-The Roaring Twenties.

Roaring Twenties: Flappers, Prohibition & Jazz Age ‑ HISTORY

The Roaring Twenties were a Jazz Age burst of prosperity and freedom for flappers and others during the Prohibition era, until the economy crashed in 1929.

www.history.com

Because that is what we do as humans-we pick ourselves up,dust ourselves off and start all over again.

 

[hydrabyss]

So, back on topic - Any thought on whether Sir RB will inject some of his personal fortune to assist, take a larger stake?

The fact he is asking the Brits for money makes me think no. But if Delta owns 49% then they may help with Atlantic but they may be getting a US bailout.

If Delta does help Atlantic that may free him up but will VA be profitable in the future considering what the outlook may be for travel.

Looking at the news I am unsure if people will be keen to go on a cruise ship straight away but there has not been any negative press with flying. So air travel may rebound quicker and attract investment.

Plus talk of a second airline being a new player seams very unlikely due to how many airlines are getting a Government bailout and could justify spending their Governments money in Australia. The fact Ryanair's name was thrown out there may have meaning or not.

 

[DaveB]

My feeling is VA will definitely fall over with the government not providing bail out loans after receiving whispers of other airlines waiting in the wings.
My short priced favourite is for NZ being government preferred, just ahead of SQ with possibly a partnership between the two particularly if the NZ government, holding over 50% of NZ's shares isn't keen on the higher risk reward all in option.
A long shot would involve a private equity firm somehow still having access to easy money and acquiring VA as a going concern with existing shareholders diluted to around a 5-10% interest.

 

[jase05]

My feeling is VA will definitely fall over with the government not providing bail out loans after receiving whispers of other airlines waiting in the wings.
My short priced favourite is for NZ being government preferred, just ahead of SQ with possibly a partnership between the two particularly if the NZ government, holding over 50% of NZ's shares isn't keen on the higher risk reward all in option.
A long shot would involve a private equity firm somehow still having access to easy money and acquiring VA as a going concern with existing shareholders diluted to around a 5-10% interest.

I’m not going to be drawn into the SQ debate but where are NZ getting the money from?
Without their bailout money from the NZ government they would be close to collapsing now and there is plenty of chatter that they will emerge as a completely different airline and perhaps even be a domestic only airline.
I hope there is a saviour out there somewhere though

 

[Happy Dude]

Given that the government has taken care of their wages bill for the next six months, couldn't VA just not pay rent on planes and whatever other leases that's causing them to bleed cash? Handing back the planes to the lessor won't be in the lessor's interest (who's going to lease them then?) and I'm sure the airports aren't going to be leasing floor space anytime soon.

I'd have thought that VA's landlords, as it were, need to come to the table for their own long-term interest.

 

[oz_mark]

I can't imagine Virgin is the only company coming to a crunch.
Maybe we need to come.up with a better model of administration to allow the companies to trade through. Not sure what that looks like though

 

[RAM]

Not sure if it's really accurate to call it a bail-out for Virgin Australia.

The Fed Govt is paying money to regional airlines to continue flying at a profit NOT loss to guarantee transport & freight for regional areas. The regional airlines have not offered anything in return other than they'll fly.

Virgin is offering 70% of the company if they fail to repay the loans within 2 to 3 years. Seems a big difference.

I remember being charged $720 for SYDMEL return by Qantas (cheapest fare available more than 28 days in advance) prior to Virgin Blue starting up.

In 1989 it was cheaper for me to buy a return holiday SYD AKL including 3 nights 4 star hotel and then AKL PER rtn than to buy a SYD PER rtn economy >28 day advance purchase flight. AND I got DUTY FREE purchases as well!

Do you think Jetstar would exist without VA?

BIG QUESTION - other than for 'Chairman's Club' access why do State & Federal Govts continue to pay double to treble the per flight cost by using Qnatas nearly to the exclusion of VA?

Guess that's just another reason why we'll never have a Federal ICAC....

 

[p--and--t]

BIG QUESTION - other than for 'Chairman's Club' access why do State & Federal Govts continue to pay double to treble the per flight cost by using Qnatas nearly to the exclusion of VA?

I would be interested if you could provide factual statistical data or copies of any policies disseminated by departments that exhibit bias to support that assertion.

 

[TheInsider]

BIG QUESTION - other than for 'Chairman's Club' access why do State & Federal Govts continue to pay double to treble the per flight cost by using Qnatas nearly to the exclusion of VA?
Guess that's just another reason why we'll never have a Federal ICAC....

Wow, You really don't know, do you?

First off just on normal commercial fares, tell me where qantas is triple of what VA costs - especially with the same fare flexibility.
Second, you do know that WOAG have government fares. A B class SYD-CBR commercially could cost around $600 where as a B class governement fare is around $160ish.

 

[RAM]

Wow, You really don't know, do you?

First off just on normal commercial fares, tell me where qantas is triple of what VA costs - especially with the same fare flexibility.
Second, you do know that WOAG have government fares. A B class SYD-CBR commercially could cost around $600 where as a B class governement fare is around $160ish.

Based on invoice seen last November - true not a big sample but can only go by what I was shown by a frustrated public servant.

 

[jakeseven7]

Based on invoice seen last November - true not a big sample but can only go by what I was shown by a frustrated public servant.

I have access to corporate B fares and also full public fares.
I have never, ever seen QF x3 price of VA on a flex fare, even when the QF flight is almost sold out. QF are normally +10/+20% extra on public flex baselines but far cheaper on B fares.

Anyway this way off topic.

I wonder who is lining up to sit in VA's data room.....?

 

[UP4014]

Virgin kicked an own goal by asking for 1.4B to help their overseas parents avoid kicking in, the Govt only has to wait it out and they could still be the owners for $1.

 

[andrewpf]

Virgin kicked an own goal by asking for 1.4B to help their overseas parents avoid kicking in, the Govt only has to wait it out and they could still be the owners for $1.

I think the leaking of it + the subsequent (unofficial) Government responses that they won't get a bail out have been far more damaging. Its not clear to me what game the Government is playing in doing that, when they could have just refused privately ... maybe different factions in the Government playing it out publicly.

Essentially however, it is meant that all of us (the humble customer/stakeholder) are left with 2 pieces of very negative information: 1) Virgin has been formally asking for a large amount of Government support to remain viable 2) It does not appear likely that the Government is willing to provide that. This has led to a 'run' on Virgin points (whether that be transfer to KF or use as gift cards), likely further damaging their cash situation.

Incidentally - the $1 billion that was on hand at the end of last year ... does anyone know whether that was debt/equity financed cash (e.g. from the Velocity transaction and future expansion); or was it cash tied to booking that are no longer going ahead?

 

[jase05]

I think the leaking of it + the subsequent (unofficial) Government responses that they won't get a bail out have been far more damaging. Its not clear to me what game the Government is playing in doing that, when they could have just refused privately ... maybe different factions in the Government playing it out publicly.

A lot of media guesswork involved aswell.
One article says the government has refused help and 5 minutes later another says the government are still considering it.
I don’t think anyone realistically knows what will happen yet

 

[Bagpuss]

Incidentally - the $1 billion that was on hand at the end of last year ... does anyone know whether that was debt/equity financed cash (e.g. from the Velocity transaction and future expansion); or was it cash tied to booking that are no longer going ahead?

Pretty sure they have had it for some time. I think it seems from equity raising from shareholders.

The money they raised via bonds for Velocity went to the private equity company.
I believe sales of future flights which are paid by credit cards are held in a fund. Virgin only get the money when you fly.

Remember: Shareholders are unsecured.

 

[bigbadbyrnes]

Pretty sure they have had it for some time. I think it seems from equity raising from shareholders.

The money they raised via bonds for Velocity went to the private equity company.
I believe sales of future flights which are paid by credit cards are held in a fund. Virgin only get the money when you fly.

Remember: Shareholders are unsecured.

Reading the financials shines a bit of light on this;

attached the balance sheet, highlighted liability called to account at balance date for 'unearned revenue' (what is also sometimes referred to as 'income received in advance').


attached the note highlighting the the amount of 'unearned revenue' made up of tickets purchased in advance.


This is as at 30 June last year, but gives you an approximate idea of what sort of numbers they would have had around Feb.