Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Scr77]

A legitimate question. I’m not scaremongering!

In light of Covid19, the impact on travel numbers and Virgins overseas ownership, how are we feeling about having stores of Velocity Points?

 

[jbman]

My understanding is that velocity is a separate company to virgin Australia

 

[ozstamps]

I feel fine about my points.

I also do not have a Nuclear Fallout Shelter dug into the bedrock out the back.

Just call me less paranoid than some out there.

 

[woodborer]

My understanding is that points in Velocity are held in a trust fund.

 

[ozfflyer]

Virgin as safe as Qantas. If Coronavirus drags out for 6 months or more, all international flights in trouble.

Post automatically merged: Feb 18, 2020

My understanding is that points in Velocity are held in a trust fund.

how can you hold points in a trust fund ? Thought it was only $$$ that can be held in trust ?

 

[Saab34]

The impact is largely International flights. Virgin has like no international network. USA flights the impact would be minimal if any. Domestic wise, Cairns and Sydney for tourism, but they don’t overly have a large Cairns network.

Been around the domestic network last few weeks not really seeing any empty flights on Virgin. The domestic business has fairly large margins that can weather this sort of event rather than International.

I would say QF International is going to be posting some form of loss this year.

Jetstar carry large amounts of Chinese tourists around the network also.

Bali won’t be affected. Virus or not, Aussies want that Bintang!

 

[woodborer]

Virgin as safe as Qantas. If Coronavirus drags out for 6 months or more, all international flights in trouble.

Post automatically merged: Feb 18, 2020

how can you hold points in a trust fund ? Thought it was only $$$ that can be held in trust ?

The funds that back the points then.

 

[trippin_the_rift]

A legitimate question. I’m not scaremongering!

In light of Covid19, the impact on travel numbers and Virgins overseas ownership, how are we feeling about having stores of Velocity Points?

If you're not using points regularly - you're not playing the game to your advantage.

Points are not a 'use for a rainy day' currency.
Points are not 'once in a lifetime trip'.
Points are the byproduct of your consumer behaviour.

In my opinion, you should be cycling through 100% of your banked points each year.
That is - if you earn 100K points a year - spend 100K points a year.

It's not a bank account and there are no points credit ratings to maintain.

Spend spend spend!

 

[Fortheloveofflying]

The real question is VA's ability to turn around and post a profit (for the first time). How long can VA's investors be patient? The share price is at an all time low.

As others have mentioned, the effect of the virus should be minimal on its domestic network. My recent BNE-LAX flight had less than 50 passengers and I can't help to think that the virus may have been a factor.

 

[Bagpuss]

How long can VA's investors be patient? The share price is at an all time low.

It's not as if Virgin is doing any capital raising from its shareholder base.
The way an invstor makes a profit is by selling shares at a later stage at a higher price / holding onto the shares and being paid dividends.

 

[HS-TQE]

All 4 major investors (EY, HNA, Nanshan and SQ) have all been speculated in the media at selling their VA stakes in recent years. Out of those 4, HNA and EY were the most serious selling parties due to their own financial debt situation.

 

[Scr77]

If you're not using points regularly - you're not playing the game to your advantage.

Points are not a 'use for a rainy day' currency.
Points are not 'once in a lifetime trip'.
Points are the byproduct of your consumer behaviour.

In my opinion, you should be cycling through 100% of your banked points each year.
That is - if you earn 100K points a year - spend 100K points a year.

It's not a bank account and there are no points credit ratings to maintain.

Spend spend spend!

I completely agree and have approx 2million points booked for travel this year. It‘s Just that I’m creating points faster than I can burn them! I’m trying to weigh the risk of losing points in a collapse vs giving points an expiry date by transferring to Krisflyer.

 

[Bagpuss]

To add to this, not many company’s are financially secure in the event of a long downturn.
I believe Virgin still have circa $1bn cash in the bank.
Airnorth I expect would be the first “major” Australian aviation company to collapse prior to Virgin.

 

[amaroo]

If you're not using points regularly - you're not playing the game to your advantage.

Points are not a 'use for a rainy day' currency.
Points are not 'once in a lifetime trip'.
Points are the byproduct of your consumer behaviour.

In my opinion, you should be cycling through 100% of your banked points each year.
That is - if you earn 100K points a year - spend 100K points a year.

It's not a bank account and there are no points credit ratings to maintain.

Spend spend spend!

Depends!

We've spent an average of 1M + points/ miles a year for the past 16 years. Currently sitting on a bank of around 9M and climbing everyday, including the 1.8M we've already booked for the year, but not flown.

Virgin could well be cactus if this thing carries on! The great majority of their owners are faced with the very same problem.

I have zero VA interest / points / miles.

 

[Pushka]

Murmurs we’ve heard aren’t positive.

 

[trippin_the_rift]

Depends!

We've spent an average of 1M + points/ miles a year for the past 16 years. Currently sitting on a bank of around 9M and climbing everyday, including the 1.8M we've already booked for the year, but not flown.

Virgin could well be cactus if this thing carries on! The great majority of their owners are faced with the very same problem.

I have zero VA interests / points / miles.

*zips up flame suit*

Anyone earning millions more points than they can use........are probably better off with cashback or non-airline loyalty programs!

 

[p--and--t]

I lost a huge pile of points when Ansett went belly up.

As a result, while I don't use all my points up in the year I make them, generally don't hold them for more than 24 months.

Currently have zero Velocity points having burned them all up recently and a couple months away from 2x319K QF redemptions which are for my next big 2021 trip.

 

[juddles]

Virgin as safe as Qantas.

A legitimate question. I’m not scaremongering!

In light of Covid19, the impact on travel numbers and Virgins overseas ownership, how are we feeling about having stores of Velocity Points?

I think the concern that Coronavirus will impact on airlines is very valid. It is still early days, but there could easily be disruptions to travel for a year or more. All of which will hurt airlines. And it is not just international - as domestic travel of international tourists will also be affected.

But I do disagree with ozfflyer - I would be slightly more comfortable with FF points held by Qantas than Virgin. I think a not improper metric to gauge your security in a company is their share price........

 

[jase05]

Murmurs we’ve heard aren’t positive.

Can you elaborate?

 

[Bagpuss]

But I do disagree with ozfflyer - I would be slightly more comfortable with FF points held by Qantas than Virgin. I think a not improper metric to gauge your security in a company is their share price........

Remember that hardly any of the Virgin Australia shares are actually traded on the sharemarket.