Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Dmac6345]

10,000 potentially without a job for a long time could have devastating consequences. My thoughts are with the staff of VA first and foremost.

 

[jakeseven7]

Aircraft don‘t last forever. I didn’t say there was a rush. VA’s fleet is statistically younger.

I think it’s fairly obvious that aircraft don’t last forever... AFF members thank you

You said QF had a domestic fleet up for renewal. It actually doesn’t. Both domestic fleets are not up for renewal.

VA had incredibly wasteful spending slated (committed to by JB of course) to renew their domestic fleet that was one of the first things PS squashed (before corona) and no doubt an administrator will do the same.

Neither QF or VA fleets are up for renewal right now. They are both well maintained. If anything they will be flying less airframes, can rotate them and keep them all in the air longer.

Post automatically merged: Apr 20, 2020

10,000 potentially without a job for a long time could have devastating consequences. My thoughts are with the staff of VA first and foremost.

100%. I hope Woolworths are helping them like they are helping QF staff in the short term.

 

[drron]

Shouldn't it be Coles that are employing VA staff?

 

[Bagpuss]

I think it’s fairly obvious that aircraft don’t last forever... AFF members thank you

VA had incredibly wasteful spending slated (committed to by JB of course) to renew their domestic fleet that was one of the first things PS squashed (before corona) and no doubt an administrator will do the same.

Neither QF or VA fleets are up for renewal right now.

Well no AFF member is an airline CEO for that matter.
I would say the VA fleet is up for renewal. B777’s, B737’s and A330’s (maybe ATRs) probably packaged up for a fleet replacement as part of the talks. Apparently a mere few weeks ago a deal was almost done.

 

[ja1]

So it only took 90 pages of posts but we did get a definitive answer to the forum thread - Is VA financially secure ?

And the definitive answer (probably tomorrow, as the board are meant to be meeting tonight?) is "No".

Which in turn has led to voluntary administration.

Which leads down two paths:

- The administrators can cut some deal that allows VA to keep flying
- Which I assume primarily means the bondholders ($5b debt to service)
- But would also mean staff, suppliers, the (Qld) state government, the Federal government..

- They cannot and as they now take over the responsibility of paying all bills as and when they are due, if they can't see a path out then they'd move to windup the company in an orderly fashion..

It's a pretty sad day for VA (and for its staff and customers and shareholders and so on)

And I assume it becomes a very long term sad day where QAN is the only remaining large Australian carrier and presumably the only one flying on a number of routes..

 

[getluv]

Those sales fares will not be seen for 5 years, if ever.
Forget those sub $200 flights to Bali too.

For domestic travelling, I disagree. I think the $9 sales fares between SYD-MEL will be back within 6 months of going back to Stage 1 restrictions and to make barriers to entry a little harder for would be competitors. You also need to stimulate growth which was JQ's business approach.

 

[HS-TQE]

There will be plenty of competitors to Bali long after VA's departure. It's a "bogan bus" revenue generating machine.

If anything, the JQ 787s may be replaced with the A321LRs, along with the rumoured discussions that JQ may be exiting 787 flying. Most of JQ's 787 destinations can be replaced with the LRs or XLRs with the exception of HNL (which QF group flying may be downsized to QF mainline only, depending on how slow the USA market recovers).

 

[serfty]

There will be plenty of competitors to Bali long after VA's departure. It's a "bogan bus" revenue generating machine.

So you believe VA will "depart"?

 

[Bagpuss]

For domestic travelling, I disagree. I think the $9 sales fares between SYD-MEL will be back within 6 months of going back to Stage 1 restrictions and to make barriers to entry a little harder for would be competitors. You also need to stimulate growth which was JQ's business approach.

Stage 1 restrictions maybe years off.

 

[ja1]

There will be plenty of competitors to Bali long after VA's departure. It's a "bogan bus" revenue generating machine.

Flying to Bali seems some way off. Months ?

The 'bogan bus' revenue generation also assumes the planes are flying full.

Does JQ (or anyone?) make the same sort of revenue flying at 50% full ? Do they still have customers (i.e people who still have a job and therefore able to afford/take a vacation?)

Were there a lot of competitors (making money) on that route previously or was it a volume route rather than a profitable one..

 

[HS-TQE]

So you believe VA will "depart"?

At least the DPS route (if not the entire VAi subsidiary), depending on whichever consortium emerges with a "VA Mk II" formed from what's left of VAH post-administration.

 

[p--and--t]

Flying to Bali seems some way off. Months ?

The 'bogan bus' revenue generation also assumes the planes are flying full.

Does JQ (or anyone?) make the same sort of revenue flying at 50% full ? Do they still have customers (i.e people who still have a job and therefore able to afford/take a vacation?)

Were there a lot of competitors (making money) on that route previously or was it a volume route rather than a profitable one..

Unless Indo get their act together to suppress the virus I would suggest checking the 2021 bogan bus schedule, unlikely to be a 2020 one.

 

[jakeseven7]

Unless Indo get their act together to suppress the virus I would suggest checking the 2021 bogan bus schedule, unlikely to be a 2020 one.

Bogan Bus.... Could that be the re-branded name for VA? Would they have to pay AFF royalties instead of Branson?

 

[Bagpuss]

10,000 potentially without a job for a long time could have devastating consequences. My thoughts are with the staff of VA first and foremost.

This will be one of the most under respected comments in the lifetime of this forum. Unfortunately.

 

[jase05]

Just saw an article from the Australian stating that VA requested $100m from the government to keep them running for 2 weeks but the PM knocked them back.
Also states in the article that Etihad is the airline looking to buy VA.
The idea of a LCC version of the airline doesn’t appeal to me at all

NoCookies | The Australian

www.theaustralian.com.au

 

[Bagpuss]

Bogan Bus.... Could that be the re-branded name for VA? Would they have to pay AFF royalties instead of Branson?

Bit early for jokes.

 

[jakeseven7]

Virgin being discussed on QandA, not much support for government assistance at all apart from the ACTU trade union saying the government should be an owner of Virgin. Mmmm hmm.

Comment was that their powerful and deep pocketed owners should be stepping up from the government rep.

 

[p--and--t]

Just saw an article from the Australian stating that VA requested $100m from the government to keep them running for 2 weeks but the PM knocked them back.
Also states in the article that Etihad is the airline looking to buy VA

That's possibly not so good news for the longer term. Every foray by Etihad to invest/buy control of other airlines so far has turned pear shaped.

 

[HS-TQE]

Just saw an article from the Australian stating that VA requested $100m from the government to keep them running for 2 weeks but the PM knocked them back.
Also states in the article that Etihad is the airline looking to buy VA

The other News Corp articles are stating that MU (China Eastern) is the interested buyer..

Going to be a lot of "interested suitors" names thrown around in the media in the next few weeks, including the "usual suspects"/fake news generators such as SQ/DL.

 

[jakeseven7]

That's possibly not so good news for the longer term. Every foray by Etihad to invest/buy control of other airlines so far has turned pear shaped.

Oh no I hope if EY bankroll VA they stay the hell out of the actual operations, they have been a disaster unto themselves and everything they touch

That being said they are better from a service point of view to the Chinese airline names being chucked around as potentially interested. Even with their scaled back service.