Virgin Australia Financially Secure? [Now in Voluntary Administration]

[drron]

Another name coming up is Melbourne PE firm BGH Capital.

About BGH | BGH Capital

BGH Capital is an Australian and New Zealand-focused private equity firm established in 2017 by Robin Bishop, Ben Gray and Simon Harle

www.bghcapital.com

 

[Cubiscus]

I don't think they'll wait for suitors as there is a viable proposition there under the right management, debt level and structure.

 

[hydrabyss]

Wow that is a lot of peoples bookings

That could be a lot of credit card chargebacks for the banks to sort out now.

 

[jakeseven7]

It’s also a lot of voters.

suspect huge majority will be on credit cards though so if it comes to that most should be fine

 

[antycbr]

suspect huge majority will be on credit cards though so if it comes to that most should be fine

What are the banks positions on chargebacks in this scenario? I assume they also have to underwrite this loss somehow?

 

[Matt_01]

That could be a lot of credit card chargebacks for the banks to sort out now.

I am no specialist however I can seen the CC providers and underwriting banks taking a position on those that have real booked flights as a non delivery of service, those with cash in the travel bank as an unsecured creditor. Lets just see what pans out.

 

[oz_mark]

I also hope if and when Qantas needs help in the future that its met with the same federal response. Fair is fair.

I suspect the feds would respond according to the circumstances at the time

1) If VA, its successor, or some other operator existed, then no, they wouldn't help
2) If QF were the sector, they may be stuck with it - but there'd have to be strings attached

 

[jakeseven7]

I was just watching The Business on ABC news. Elysse Morgan mentioned "the people that have Virgin Velocity points, we've had that confirmed tonight that they will be for nought now".

Hoping this isn’t true or maybe Velocity will just be placed on hold during the restructuring. Their website is still accepting some orders tonight.

 

[AustraliaPoochie]

A pair of Deloitte accountants are set to take the keys at Virgin Australia.

Meet Virgin Australia's co-pilots in waiting

A pair of Deloitte accountants are set to take the keys at Virgin Australia.

www.afr.com

Just like KordaMentha with the AN days 19 years ago.
They tried AN mark2 but that didn't work.
Sad state of affairs this schemozzle.

 

[jase05]

What are the banks positions on chargebacks in this scenario? I assume they also have to underwrite this loss somehow?

Banks make a killing off us, getting a bit back off them won’t hurt

 

[antycbr]

Principally

I suspect the feds would respond according to the circumstances at the time

1) If VA, its successor, or some other operator existed, then no, they wouldn't help
2) If QF were the sector, they may be stuck with it - but there'd have to be strings attached

If option 2 happens Alan Joyce would have his pay severely cut. I’m sure that the conservative end of the liberal party don’t like him he’s far too progressive - he should stick to his knitting not social commentary according to them.

 

[jakeseven7]

Just like KordaMentha with the AN days 19 years ago.
They tried AN mark2 but that didn't work.
Sad state of affairs this schemozzle.

I think they have a bit more to work with than the shell of AN that NZ left KordaMentha to deal with. Let’s not lump VA in with that!

 

[Mr Pumblechook]

I am no specialist however I can seen the CC providers and underwriting banks taking a position on those that have real booked flights as a non delivery of service, those with cash in the travel bank as an unsecured creditor. Lets just see what pans out.

Agreed. If your flight hasn't been cancelled yet, chargeback seems reasonable. For those of us with credit card-booked flights, that were cancelled and converted to travel bank, I suspect the banks may say the transaction is complete, we're unsecured creditors and therefore we're stuffed

 

[Cubiscus]

Hoping this isn’t true or maybe Velocity will just be placed on hold during the restructuring. Their website is still accepting some orders tonight.

You can also still book flights, should you want to.

 

[AustraliaPoochie]

Wiki says that VA is already as of 20/04 in Voluntary Administration.
I hope that VA don't/won't die, but if they do, bad as it is, after AN, I am ready to expect it.
With AN, I was more shocked, thought it couldn't happen, ...
Anyway, its a wait and see what happens now.

 

[Franky]

At least employee benefits are guaranteed through FEGS. The Feds are on the hook for $850 million at this point.

Not the Feds - me, a taxpayer like heaps of others...

 

[HS-TQE]

Wiki says that VA is already as of 20/04 in Voluntary Administration.
I hope that VA don't/won't die, but if they do, bad as it is, after AN, I am ready to expect it.
With AN, I was more shocked, thought it couldn't happen, ...
Anyway, its a wait and see what happens now.

Wikipedia isn't a reliable source overall. Although some pages are backed with reliable sources.

Someone could edit that Virgin Australia is ordering 100000+ A321NEOs and some clueless person would believe it.

 

[antycbr]

Not the Feds - me, a taxpayer like heaps of others...

Most of us pay tax - I was just pointing out the consequences of a liquidation, we are looking at that cost to treasury. There is also the increase in jobseeker to flow through after that plus loss of GST and other charges.
With less discretional travel tourism domestically will take a hit - more Jobkeeper and less GST and income tax.
Lack of competition means that anything involving air transport is more expensive passing right through the economy, from fifo operations to air freight, essential business travel.

the dominos are pretty big here once they start falling.

 

[Matt_01]

Not the Feds - me, a taxpayer like heaps of others...

100% agree and I am pretty sure the taxpayer has been levied for such occurrences in the past. I have no interest in calling my accountant to get the details however I do recall having to pay a levy a few years back for some flood in QLD when I lived in VIC whilst at the same time paying drought water levies in VIC.

At the end of this the "spin doctors" will sprout there were no new taxes but I suspect the will be some type of levy for years to come.

 

[exceladdict]

Singapore may well not be an owner after all this, I wonder if that impacts it....?

I suspect many VA status members get a lot of value out of flying SQ and accessing their lounges. The loss of the SQ partnership, without a replacement, would severely dent Velocity status' value imho.

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

It will be a pretty cheap buy, if they never have to pay it back. I feel for the bondholders too. How many of those are super funds?