Virgin Australia Financially Secure? [Now in Voluntary Administration]

[ermen]

ABC Twitter Confirming Deloitte appointed administrators

 

[samh004]

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.

Where did the money go?

I always recall friends saying VA's trans-con service to be leaps and bounds ahead of QF's in terms of food and beverage, with QF seemingly never interested in lifting its game. Is this an example of an area they over-spent to gain marketshare? Is it things like that?

 

[antycbr]

Where did the money go?

I always recall friends saying VA's trans-con service to be leaps and bounds ahead of QF's in terms of food and beverage, with QF seemingly never interested in lifting its game. Is this an example of an area they over-spent to gain marketshare? Is it things like that?

Purchasing or leasing aircraft at the top of the market (A330s)
Fleet planning (ATR72-500, ATR72-600, E170 and E190s) were all bought on to fleet then parked - enough to run another airline
Paying Alliance to fly services for you when it’s 20 percent QF owned
Route planning - HKG plus all the odd V AUS destinations
Tiger
Busting up with NZ on the tasman
Poor cost control
Lack of strategy to make partnerships really work
That’s off the top of my head...

None of this is the fault of the frontline staff.

 

[knagelli]

May not be the right question but what will be the priorities of administrators and whats the way forward for thousands of travel credits issued ?

 

[tomlee1986]

May not be the right question but what will be the priorities of administrators and whats the way forward for thousands of travel credits issued ?

I would say try to find a buyer to keep this company alive as a liquiduation would cause even more losses

 

[samh004]

ABC Twitter Confirming Deloitte appointed administrators

I can't find that tweet, perhaps it was posted incorrectly and then removed?

Post automatically merged: Apr 20, 2020

Paying Alliance to fly services for you when it’s 20 percent QF owned

I thought QF buying (part of) Alliance was a recent thing?

 

[antycbr]

I can't find that tweet, perhaps it was posted incorrectly and then removed?

Post automatically merged: Apr 20, 2020

I thought QF buying (part of) Alliance was a recent thing?

It is relatively recent but it’s handing money straight to your competitor. Were those flights ex BNE profitable? If not why fly them? I guess there is the network effect but still you did have aircraft that you’ve parked that could have flown them.

DJ had a much lower cost base when it started.

 

[serfty]

Voluntary Administration is NOT Liquidation

Paywalled: Category: | Herald Sun

It’s thought the firm is one of several interested in the airline, which analysts believe can be run profitably if it can jettison the more than $5 billion of debt it is servicing.
...
Analysts believe the airline can succeed without major job losses for Virgin’s 10,000 workforce, and that a restructure could be completed within several months, meaning the airline would be grounded mostly during the coronavirus lockdown.
...

 

[RooFlyer]

May not be the right question but what will be the priorities of administrators and whats the way forward for thousands of travel credits issued ?

Sorry, probably not what you were after: Holders of travel credits will be 'unsecured creditors'.

Duties of voluntary administrators

The case of Macks v Viscariello [2017] SASCFC 172 considers a number of important issues relating to duties of voluntary administrators. The Full Court’s decision finalises a long-running saga invo…

australianinsolvencylaw.com

 

[jakeseven7]

Purchasing or leasing aircraft at the top of the market (A330s)
Fleet planning (ATR72-500, ATR72-600, E170 and E190s) were all bought on to fleet then parked - enough to run another airline
Paying Alliance to fly services for you when it’s 20 percent QF owned
Route planning - HKG plus all the odd V AUS destinations
Tiger
Busting up with NZ on the tasman
Poor cost control
Lack of strategy to make partnerships really work
That’s off the top of my head...

None of this is the fault of the frontline staff.

Dare I add lack of membership of a proper alliance which would have made flying VA more attractive. Cough Star Alliance.

Dons flame suit and runs!

 

[tomlee1986]

Dare I add lack of membership of a proper alliance which would have made flying VA more attractive. Cough Star Alliance.

Dons flame suit and runs!

I would say joining an alliance now is a bit too late - as this airline is ridden with debt and need instant cash inflow in order to survive

 

[antycbr]

It is relatively recent but it’s handing money straight to your competitor. Were those flights ex BNE profitable? If not why fly them?

I would say joining an alliance now is a bit too late - as this airline is ridden with debt and need instant cash inflow in order to survive

if VA was pi****g away funds under Borghetti an alliance membership would have been one of his better investments compared to what he did invest in. The boardroom complications would have made this very difficult and I suspect this is why it didn’t happen. Australians like star alliance as it has airlines relevant to Australians like NZ and SQ. They were familiar with it from AN.

 

[samh004]

I would say joining an alliance now is a bit too late - as this airline is ridden with debt and need instant cash inflow in order to survive

Certainly too late right now, but had they not been tugged in every direction by their owners, and instead been allowed to join an alliance I feel – and presumably others do too – that they would have been able to feed their own network, rather than the other way around. Would have made them a much more attractive competitor to QF and the OW alliance.

 

[tomlee1986]

if VA was pi****g away funds under Borghetti an alliance membership would have been one of his better investments compared to what he did invest in. The boardroom complications would have made this very difficult and I suspect this is why it didn’t happen. Australians like star alliance as it has airlines relevant to Australians like NZ and SQ. They were familiar with it from AN.

I agree with you that being in an alliance is a good thing... and it should have been done years ago... but no point crying over spilt milk now as this airline is ridden with debt, to join an alliance takes time to process and in these uncertain times... time is money and I hate to say VA does not have either to play with to survive at this time

 

[samh004]

Australians like star alliance as it has airlines relevant to Australians like NZ and SQ. They were familiar with it from AN.

I feel they could also have made Sky Team work, with connections in popular spots like Bali on Garuda and Singapore on AF/KLM and Vietnam on Vietnam Airlines, USA on Delta (as they were doing). All of those airlines would then have the Australian market opened to them, but I feel this is drifting off topic now.

 

[antycbr]

I agree with you that being in an alliance is a good thing... and it should have been done years ago... but no point crying over spilt milk now as this airline is ridden with debt, to join an alliance takes time to process and in these uncertain times... time is money and I hate to say VA does not have either to play with to survive at this time

I agree we need an airline first, then we can worry about any form of loyalty program let alone its partners and alliances.

 

[serfty]

Not paywalled:

Virgin boss declares airline is 'not collapsing' as 10 investors circle

www.9news.com.au

WHAT IS VOLUNTARY ADMINISTRATION?

Just because Virgin Australia has gone into voluntary administration, does not automatically mean it has disappeared forever.

When a company is facing grave financial difficulties (such as running expenses vastly out-stretching income coming in), it becomes insolvent.

Virgin may be sold to a buyer. (AAP)

To fix this, a business appoints an independent administrator who effectively runs a detailed accountancy check of the business to slash unnecessary costs.

Voluntary administrators may make several recommendations to help save a company, which include: finding a buyer to purchase the business as a complete package, or restructuring to cut down on overhead costs.

Most large-scale businesses such as Virgin Australia have already investigated extensive restructuring methods, so it largely comes down to whether the airline presents an attractive opportunity for a multinational with deep pockets.
...

VA likely worth far more as a whole operating entity than in small pieces.

 

[tomlee1986]

Lets put it this way: if the airline is sold.. then there is a major restructure where lots of jobs will go, no matter what.. but I think we want a leaner VA - with reduced staff (sad for those that had to be let go), rather than airline that is dead like Ansett... My bigger worry is that even VS is seeking UK government support at this time too

 

[jase05]

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.

Yeah, I’m probably the opposite of you as I wasn’t a huge fan of Virgin Blue but love VA.
I hope the airline survives in one form or another and despite this potentially going to cost me quite a bit in the hip pocket it’s nothing compared to what the staff will be going through and through work I have made a heap of friends with VA staff so I just hope there is something for them at the end of it.
Whether they are an airline I will fly with again remains to be seen I guess depending on what they look like on the other side

Post automatically merged: Apr 20, 2020

My bigger worry is that even VS is seeking UK government support at this time too

Nearly every airline in the world is seeking government support and many more will fail if they don’t get that support

 

[swidmelbie]

Hi guys, I was wondering if I would be able to redeem Singapore Airlines flights with velocity. I know they have disabled transfers to the Krisflyer Program.