Virgin Australia Financially Secure? [Now in Voluntary Administration]

[antycbr]

According to the Australian the QLD gov will contribute $200m.

 

[jase05]

According to the Australian the QLD gov will contribute $200m.

Providing their base remains in Brisbane

 

[jase05]

Article from the Courier Mail



Well-placed sources have told The Courier-Mail the Government, through China Southern Airlines, China East Airlines and Air China, is understood to be in discussions about purchasing the Queensland-based carrier, but no formal offer has been lodged.

No Cookies | The Courier Mail

No Cookies

www.couriermail.com.au

 

[travel_bug]

Providing their base remains in Brisbane

Really? There’s an AFR article from an hour ago on it but it’s paywalled - from what can be seen it says they want to do it to spur other states to do the same.

 

[jase05]

Really? There’s an AFR article from an hour ago on it but it’s paywalled - from what can be seen it says they want to do it to spur other states to do the same.

Yes, this is the article in question

The $200m — offered on the condition Virgin maintains its Queensland headquarters where 5500 people are employed — is well short of the $1.4bn sought by the airline but is designed to increase pressure on the Morrison government to reverse its refusal to provide an assistance package.

 

[travel_bug]

Yes, this is the article in question

The $200m — offered on the condition Virgin maintains its Queensland headquarters where 5500 people are employed — is well short of the $1.4bn sought by the airline but is designed to increase pressure on the Morrison government to reverse its refusal to provide an assistance package.

Hmm very interesting, I wonder if that’s what VA was trying to get from Qld initially when it was released they were looking at moving their base to Melbourne. Thank you for the context paragraph!

 

[Rembrandt]

According to the Australian the QLD gov will contribute $200m.

The ABC article I read suggested that the QLD government wants other states to chip in too. However, I would guess QLD will pay the bulk as they want to secure Brisbane as the HQ for VA.

Article from the Courier Mail



Well-placed sources have told The Courier-Mail the Government, through China Southern Airlines, China East Airlines and Air China, is understood to be in discussions about purchasing the Queensland-based carrier, but no formal offer has been lodged.

No Cookies | The Courier Mail

No Cookies

www.couriermail.com.au

Interesting times. I had a feeling the Chinese would buy VA (not sure how much) as they're one of the few with the capital at the moment. VA is roughly 40% Chinese owned at the moment. However, how will it go down with the the Australian public? China has struck a nerve as of late due to Covid-19 and there is a push out there to avoid Chinese business.

 

[pauly7]

The ABC article I read suggested that the QLD government wants other states to chip in too. However, I would guess QLD will pay the bulk as they want to secure Brisbane as the HQ for VA.



Interesting times. I had a feeling the Chinese would buy VA (not sure how much) as they're one of the few with the capital at the moment. However, how will it go down with the the Australian public? China has struck a nerve as of late due to Covid-19 and there is a push out there to avoid Chinese business.

It’s an interesting question.

The public didn’t seem to care too much that pre-Corona, VA had significant Chinese ownership and indeed was almost completely foreign owned.

But I’d question how much the general public actually knew about who owned Virgin, from all the comments on Fakebook it seems most still thought RB owned most and seem very very surprised to find out it’s also owned by foreign government subsidised/owned airlines and the Chinese already! I mean people on here didn’t even know the details until this all blew up

The massive media focus on VA as they try to restructure has really shone the spotlight on this now though... It’s on the nightly news and everyone’s feeds.

There was a big and sustained consumer sentiment change towards supporting local, Australian made, Australian owned, traceable/ethical local supply chains etc etc pre-Corona (I worked on the research for it). I suspect that is being heightened right now as well.

So no, I don’t think it’s a great look for VA if it eventuated. But what choice do they really have now anyway.

I also know if consumers are faced with little choice in a market and the alternative is much more expensive (tolerance levels differ) at the time of purchase, they would put their card down and suck it up.

 

[hydrabyss]

The ABC article I read suggested that the QLD government wants other states to chip in too. However, I would guess QLD will pay the bulk as they want to secure Brisbane as the HQ for VA.



Interesting times. I had a feeling the Chinese would buy VA (not sure how much) as they're one of the few with the capital at the moment. VA is roughly 40% Chinese owned at the moment. However, how will it go down with the the Australian public? China has struck a nerve as of late due to Covid-19 and there is a push out there to avoid Chinese business.

I don't see any issues with a Chinese Government owned airline being interested in Virgin if our Government is not. I am sure Joe public will be happy to save their tax payer dollars.

 

[pauly7]

Hmm very interesting, I wonder if that’s what VA was trying to get from Qld initially when it was released they were looking at moving their base to Melbourne. Thank you for the context paragraph!

The QLD state government will be absolutely desperate to keep VA in Brisbane, no matter who ends up owning it. They’ve thrown a lot of money at VA already to keep them there to date.

I suspect the other state governments won’t contribute. And if they do, it won’t be much. VIC logically would be a very good base, so maybe you’ll see a dark horse offer from VIC with strings attached to move VA Village down but I doubt it - and that offer may not be a public one

The Fed Gov has already provided assistance to the airlines and I don’t feel the sentiment is there to provide much specific assistance to one carrier.

 

[Standby]

It’s a big commitment by the Qld Govt and could come back to bite financially and electorally.lf VA restructure and the workforce halves with known and unknown changes,it becomes a very expensive subsidy.If you are going to give away 200m setting a min workforce size seems reasonable.

 

[travel_bug]

The Fed Gov has already provided assistance to the airlines and I don’t feel the sentiment is there to provide much specific assistance to one carrier.

Eh, I think I’m a cynic given one of my first jobs was drafting responses to pieces of ministerial correspondence sent in by the public, but I don’t think the public as a whole really know what they want, at least not at this stage.

This of course is only going by what I can see on Facebook posts and comments on VA’s page, but you have the same people who last week were calling out for VA’s foreign owners to chip in and save VA, suddenly wanting the government to ban other foreign ownership. I think if you really shook those people and asked them “what do you really want?” They’d respond by saying they want surety in the travel credits VA has set up for them, possibly worth thousands.

It’s a big commitment by the Qld Govt and could come back to bite financially and electorally.lf VA restructure and the workforce halves with known and unknown changes,it becomes a very expensive subsidy.If you are going to give away 200m setting a min workforce size seems reasonable

I completely agree, you’d imagine they’d be looking to set it up as a very specific grant agreement with contingent performance clauses including base levels of Queensland employment, which would then translate to their head office remaining in the state.

 

[Cubiscus]

VA is one of the most high profile employers here (BNE) so if it goes down there will be widespread recriminations and political fallout.

With the new runway opening soon as well they'll be desperate for VA to stay here.

 

[jakeseven7]

It’s a big commitment by the Qld Govt and could come back to bite financially and electorally.lf VA restructure and the workforce halves with known and unknown changes,it becomes a very expensive subsidy.If you are going to give away 200m setting a min workforce size seems reasonable.

600 comments on the ABC report on this already this morning and most don’t support it - don’t support specific companies being given tax payers money, especially VA being foreign owned, calling for it to be broader assistance etc etc

I think this is too much (too soon) for our state government to throw at VA to stay. They should be more careful with our money - typical of this government. They should be watching and seeing how this plays out and working with the new owners or administration/management.

The new owners of VA should be the ones stumping up all the cash not tax payers.

Post automatically merged: Apr 18, 2020

VA is one of the most high profile employers here (BNE) so if it goes down there will be widespread recriminations and political fallout.

With the new runway opening soon as well they'll be desperate for VA to stay here.

After the massive redundancies at VA head office - does anyone actually have a handle on how many people VA employ in BNE head office?

 

[jase05]

I don't see any issues with a Chinese Government owned airline being interested in Virgin if our Government is not. I am sure Joe public will be happy to save their tax payer dollars.

Absolutely agree. If the government won’t help VA I’ve got zero issues if they are 100% Chinese owned and I would hope any take over attempt isn’t blocked

 

[jakeseven7]

Absolutely agree. If the government won’t help VA I’ve got zero issues if they are 100% Chinese owned and I would hope any take over attempt isn’t blocked

Why would they block it? It’s already 90% foreign owned, 40% Chinese. Government won’t care who owns them as long as they are dealt with by their new owners and stop begging for money!

It would be a different story if they were majority Australian owned and moving to majority foreign owned I’m sure.

 

[dajop]

This of course is only going by what I can see on Facebook posts and comments on VA’s page, but you have the same people who last week were calling out for VA’s foreign owners to chip in and save VA, suddenly wanting the government to ban other foreign ownership.

Aaah, the irony. Posting on that Australian icon, Facebook, probably using their Australian made and owned Apple and Samsung phones to call for government to ban further foreign ownership of VA ....

 

[melb78]

Well if the Chinese airlines buy VA we call be all assured that Va will be able to give QF run for there money. I rather an airline buy VA then going to a PVT investment or equity group any day

 

[Cubiscus]

Well if the Chinese airlines buy VA we call be all assured that Va will be able to give QF run for there money. I rather an airline buy VA then going to a PVT investment or equity group any day

Agreed, Bain's record suggests they would asset strip and look to reduce employment costs substantially rather than care about a viable long term investment.

 

[clarkkent]

Virgin Australia offered $200m conditional lifeline by Queensland Government

The Queensland Government offers $200 million to help bail out Virgin Australia, but imposes a number of conditions designed to pressure the Federal Government and other states and territories to come to the party.

www.abc.net.au

ABC article mentions various conditions:

The airline has asked for a $1.4 billion loan from the Commonwealth to help it through the coronavirus pandemic, but it has so far been offered a share of $165 million.

Mr Dick said the Queensland funding was conditional on the Federal Government backing, as well as debt restructuring, shareholders and bond holders doing their bit, headquarters remaining in Brisbane and ongoing regional flights.