Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Franky]

Well, that's $1.2 billion of people's votes that will be remembering the government's inaction.

Well that would a poor use of the privilege of the vote.

 

[Melburnian1]

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.

True, but far more have lost jobs in hotels, retailers and numerous other sectors. And lots of others have had their hours reduced.

10,000 job losses (plus indirect jobs) is large (and devastating for many, even if it's only a small percentage of the Oz workforce) but some will find new employment, whether with a rebadged, smaller VA or some other operator, or in some cases people will work in a different sector.

 

[antycbr]

Whatever, but I started paying income tax at the age of 15, am now 75 and still paying tax, so I’m more than over picking up the tab for others’ misfortune.

You won't have a choice through FEGS and Jobseeker if VA goes down totally unless the government amends this legislation. So you may as well pick the least worst option.

 

[AustraliaPoochie]

10k velocity points was 1 economy reward seat on a 1hr flight with some change (CNB-MLB was 7800 one way from memory). Can't speak for velocity store redemptions though, but best value for points was always flight redemptions/upgrades.
In short, if you lose it, you really won't lose much, maybe $150 in value?

Its not MLB, its MEL.
MLB is in the US.

 

[travel_bug]

Its not MLB, its MEL.
MLB is in the US.

Already noted and apologised for 25 minutes ago.

 

[travel_bug]

Direct quotes from The Guardian live updates: Australia coronavirus updates live: Virgin tells ASX it is going into administration as NSW announces staggered return to school – latest news

Virgin Australia administrator Vaughan Strawbridge is speaking now. He says Deloitte is “not planning any changes to the operation of the business”. There are “no plans to make any redundancies” of Virgin’s remaining staff and “wages will continue to be paid”.​

​

He says there has been an “extraordinary amount of interest in the business and in the restructuring of VirginAustralia”. ​

​

"
"And so we are confident that this will result in a restructuring being achieved in a short period of time. As I said, we have not changed anything in respect to the operations or the employees. They’re continuing to be employed. There is no plans to make any redundancies. Wages will continue to be paid and those who have been stood down and are accessing jobkeeper, the intention is to continue to make those payments available to those staff."​

Strawbridge says “in excess of 10 parties” have expressed interest in Virgin.​

​

"There were a number of parties that are reached out prior to our interim funding proposal or package and another few have come in overnight. We won’t go into specifics on who those parties are. Obviously, we have to keep those parties confidential, but they are in excess of 10 parties and I’ll say in excess of 10 parties who are known to us who have got a keen interest in being part of the restructure of Virgin."​

 

[Oxy]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

 

[Plutonus]

Paul Scurrah just said that the Velocity trust has the cash to back the points of members of Velocity. At the same time, Deloitte said they do not intend to separately sell Velocity, and it is currently well structured.

Deloitte also said that they have in excess of 10 interested parties from a wide cross-section of industries, and believe Virgin has enough cash to see them through the voluntary administration period (reporter said the rough calculation is $700m cash as of now).

 

[odysseus]

Program Update 21 April

experience.velocityfrequentflyer.com

Somewhat disingenuous to expect people to still accrue points they can't redeem though...

It's reasonable to explain the implications from the operation. If they leave it out then people just question things.

 

[antycbr]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

I think this comment is a bit mean spirited - VA were working towards a launch of the route and had every intention to start it (including sales of tickets, marketing launch etc). If this black swan event had not occurred they would have launched successfully (whether they made a profit or lasted is a different matter).

The future of the route would obviously depend on VAs future investors and business model, and having aircraft suitable to fly it. I think that it will take some time for QF to be flying all of their slots to HND in the current climate as well.

Possibly the Japanese gov may centralise operations at HND for a time rather than operating both NRT and HND.

 

[Carrots]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

You're assuming QF actually use theirs...

Assuming your comment/question is genuine and not just a snide remark -

You could call a slot an asset given they quite often are leased to others, but in the current environment it's not exactly a solid asset. The other unknown is what does the slot agreements say? Would VA being placed in VA void the slot? Who knows really.

 

[odysseus]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

I don't see any Australian airline using that asset at the current time.

And if and when it becomes available, who knows who'll be using those slots then.

 

[dajop]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

Harsh. Is QF able to make use of the newly available HND slots at the moment ?

No-one foresaw the contraction of demand of the entire global passenger market for airlines collapsing to what, 10% of the revenue one month earlier? VA may have struggled through without the COVID contraction, but, as it happens this virus means it may not make through at all (to take the pessimistic viewpoint) or it may take the opportunity it presents to tranform into a much meaner and leaner organisation (optimistic view) relieved of a substantial part of the debt noose around its neck.

I think most would agree that many of newly available HND slots may not be used in the next 6-12 months.

 

[jase05]

Looks like QF were right about there only being one trustworthy airline to make use of the newly available slots at HND.
Is that a VA asset or will it just be surrendered and redistributed elsewhere?

Ahh yes I forgot AJ had a crystal ball and he could foresee the Coronavirus

 

[antycbr]

Ahh yes I forgot AJ had a crystal ball and he could foresee the Coronavirus

If all of the stories about recapitalisation of VA are true, AJ has a lot to be worried about, in particular the international operations. Even if they're not true and VA folds, the ACCC will be all over him.

 

[odysseus]

I'd think that the pool of votes who DON'T have skin in the Virgin game is a tad larger...……...

I'm way more likely to remember a government that pissed good money after bad when the owners didn't do squat, and didn't do squat WELL before all this happened.

The owners aren't in a position to "do squat now" due to worldwide lockdowns.

And there wasn't a need for them to "do squat before" as there was no issue with continuing operations - Virgin even got sizeable funding just a few months. So there wouldn't be an issue except for the government restrictions. Hence they're the appropriate party to resolve this.

 

[Oxy]

Not at all intending to be mean spirited, more just ironic how QF while pleading their case for both slots used VA's inconsistent international stratergy as an argument, now neither of them can use either of them for the foreseeable future.

And yes a genuine Question about the slot being an asset.

 

[OATEK]

While the Administrators have not specifically speculated about the restructuring, I can't help but wonder if the VA International arm is most likely to be sacrificed first. This could make VAd more attractive to foreign airlines.

 

[jakeseven7]

The owners aren't in a position to "do squat now" due to worldwide lockdowns.

Two of the VA foreign owners have incredibly rich foreign governments lurking behind them.
I don't believe for a second they don't have the money
They chose to 'do squat' and not tip their own money in - for whatever reason, and that is fine - their interests will now probably be zeroed out.

Air NZ will be thanking their lucky stars today - they have literally avoided AN part 2.

 

[HS-TQE]

While the Administrators have not specifically speculated about the restructuring, I can't help but wonder if the VA International arm is most likely to be sacrificed first. This could make VAd more attractive to foreign airlines.

I'm be tipping what's left of TT (Tigerair) would be wound up first before the VAi AOC. Although if administrators and the eventual 'new' owner uses the TT AOC instead of the VA AOC, that would put out more questions.