Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Must...Fly!]

No confirmation yet, ten seems to be the only ones claiming they've actually entered administration and the article is very very poorly written

EDIT: The Australian is saying the announcement will be made tomorrow morning

 

[p--and--t]

No confirmation yet, ten seems to be the only ones claiming they've actually entered administration and the article is very very poorly written

Probably tossed a coin and decided they could write the "scoop" and breaking news, before it actually happens (and typical of some media nowadays before its a fact, bit like writing obituaries when the patient is still in ICU).

 

[HS-TQE]

Yes, it will be interesting to see what happens with SQ's role in VA.

There is a chance that the points transfer arrangement may stick around, as it is quite lucrative for SQ. And quite a lot of savvy Velocity members like to convert Velocity points to Krisflyer.

Unfortunately it may be the start of another round of #FakeNews from the "SQ to take over VA !!!111" club which has been occuring for the past few years, or SQ goes away entirely and just quietly sorts out an interline with the "VA Mk II" successor (if it does occur by administrators).

 

[wiz]

I've got to say this has been the most disappointing response from the government during such a crisis. Sorry if this has already been said and people are sick of hearing it. I think the fallout from this mess, if VA has gone into VA, is going to be much harder to clean up for years to come (e.g. tourism, competition, airport capacity, and BAU).

Also, has anyone given any thought on what would happen to the lounges and terminals if VA did collapse (and not come out of administration)?

 

[antycbr]

I've got to say this has been the most disappointing response from the government during such a crisis. Sorry if this has already been said and people are sick of hearing it. I think the fallout from this mess, if VA has gone into VA, is going to be much harder to clean up for years to come (e.g. tourism, competition and BAU).

The gov didn’t want to bail out foreign shareholders. Now that VA has been put into administration we may see VA reshaped and made a going concern. Government assistance is easier in this context.

 

[jakeseven7]

I've got to say this has been the most disappointing response from the government during such a crisis. Sorry if this has already been said and people are sick of hearing it. I think the fallout from this mess, if VA has gone into VA, is going to be much harder to clean up for years to come (e.g. tourism, competition, airport capacity, and BAU).

Also, has anyone given any thought on what would happen to the lounges and terminals if VA did collapse (and not come out of administration)?

I don't think VA is going to collapse. They will be leaned up, probably turned back into more of a Virgin Blue and will have new owners.

Today is probably the start of their new life.

 

[samh004]

I don't think VA is going to collapse. They will be leaned up, probably turned back into more of a Virgin Blue and will have new owners.

Today is probably the start of their new life.

I would be more likely to fly them again under this scenario than if they got a bailout and continued their current (pre-COVID-19) course.

 

[RAM]

If international doesn't fire up anytime soon, Qantas may not be in a position to wage a huge war.

I am happy to take odds that International will not 'fire-up' to more than 15-30% of Q4 2019 levels for Q at least until Q2 2021, and not reach prior levels before 2023.

VA faces some fallout if this environment eventuates but Q faces a potential true bailout requirement as it has backloaded its international operational costs.

If this time is NOT different (no successful corona virus developed previously) and a safe vaccine is not developed then it would take close to two years to provide enough doses (at a ramp up 6x any previous vaccine ramp) for half the world. If it is at a typical 'Big Pharma' price then only 1/3rd the world will be able to afford it.

Whichever way this pans out - international travel reports are not going to be as plentiful as they used to be

 

[antycbr]

I would be more likely to fly them again under this scenario than if they got a bailout and continued their current (pre-COVID-19) course.

That lost shedloads of money though.

 

[RAM]

I don’t think that’s fair to say; I don’t think anyone has said “screw the employees, give me my points”.

Whilst there is never a guarantee on the value of velocity points, people can still be upset about losing them. People can also be upset about losing money in their travel banks if that occurs. You can be upset about different things at the same time, I don’t think anyone’s exactly joyful at the prospect of Australians losing employment during a pandemic.

Hmmm, I think you may be wrong there!

Is that the sound of champagne corks popping over at Aj's office?

 

[p--and--t]

I've got to say this has been the most disappointing response from the government during such a crisis. Sorry if this has already been said and people are sick of hearing it. I think the fallout from this mess, if VA has gone into VA, is going to be much harder to clean up for years to come (e.g. tourism, competition, airport capacity, and BAU).

Also, has anyone given any thought on what would happen to the lounges and terminals if VA did collapse (and not come out of administration)?

History says they were quite happy for all the car building factories to close (with 10,000's job losses) on the basis they intrinsically weren't making money without gov support. Runs on the board for the Feds.

If the shareholders couldn't see any value in putting in more money to VA on the basis they didn't make anything on their original investment and could see the writing on the wall, I can see why the gov didn't want to either.

If the company gets restructured into something that is sound, viable and logical then attitudes might change and other investors willing to jump in. In that scenario gov support will not be required anyway.

Lounges and rented terminals and all that stuff is mere incidental periphery to the major agenda.

 

[Scr77]

Chanel 7 news just said that Deloitte has now been appointed administrators.

 

[antycbr]

Hmmm, I think you may be wrong there!

Is that the sound of champagne corks popping over at Aj's office?

I doubt it. If there’s no competitor the ACCC will be all over them. They’d prefer a weak VA, and certainly not a refinanced one.

QF also have a massive INT fleet.

 

[moa999]

VA were always going to be weak with their ownership structure and debt. Honestly I think this may be actually best!

Agreed. Not making a profit, more highly geared.. and recently paid $700m to buyback Velocity - funded entirely with debt.

Virgin is 10% Aus owned/ 90% foreign. Qantas is about 60/40.
But the big difference is VAs shareholders weren't willing to contribute additional equity.
If QF needed to raise $s from the market it could get it (albeit would be at a big discount), and as it recently did could raise more $s by securitising aircraft.

That said if this is a long slow recovery a new VA2 (after the administrator has cancelled leases and let secured aircraft go) may be better positioned, whereas QF will have too many aircraft and leases

Post automatically merged: Apr 20, 2020

Chanel 7 news just said that Deloitte has now been appointed administrators.

Saw that. Still nothing on ASX or Virgin Website.
But lenty of smoke

 

[RAM]

Enhancements always needs " " around it to give newbies on AFF the idea.

Correction made....

sniff, sniff, I'll go stand in the corner now.

 

[samh004]

That lost shedloads of money though.

The last time they were paying dividends was in 2008, and preceding years. Dividends don't necessarily mean profit I guess, but their race to copy QF's services has seen them spend a lot of money. Though I suppose it's actually been their 'partners' / 'owners' that have really buggered things up for them. I guess, we're all different in the airlines we like to fly, but I really enjoyed Virgin Blue and fell out of love with Virgin Australia.

Hopefully tomorrow is their time to start clean.

 

[RAM]

I doubt it. If there’s no competitor the ACCC will be all over them. They’d prefer a weak VA, and certainly not a refinanced one.

QF also have a massive INT fleet.

The ACCC wasn't last time around. Q's Chairman's Lounge has amazing 'blinkering' powers. Q will be declared to be in the 'national interest'.

Let the "enhancements" commence!

 

[HS-TQE]

Hogan (Etihad) and Borghetti, along with the SQ representative (at the time) all share responsibility for spending all their money (including funds form Etihad Group and SIA) to screw up VAH financially.

 

[jakeseven7]

Hogan (Etihad) and Borghetti, along with the SQ representative (at the time) all share responsibility for spending all their money (including funds form Etihad Group and SIA) to screw up VAH financially.

Lets just remember there is a lot of senior management still at VA who are not enitrely blameless. Apparently JB kept a tight inner circle to do his work.
Lets hope they get straightened out.

 

[antycbr]

The ACCC wasn't last time around. Q's Chairman's Lounge has amazing 'blinkering' powers. Q will be declared to be in the 'national interest'.

Let the "enhancements" commence!

I think this time the Feds are aware of the power of QF and Alan Joyce hasn’t made too many friends in the conservative end of the liberal party. If the government is in “nation building” mode they won’t want the recovery of domestic tourism to be held hostage to monopoly QF profits. They have to pay for all of those unemployment benefits and there’s a lot of tourism in marginal seats.