Virgin's war chest to attract the lucrative corporate and government passenger sector

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

How does VA get around the foreign ownership laws? Going off this article after capital raising shareholdings will be Virgin Group 10%, EY 22.2% & SQ 22.1%, so 54.3% in foreign hands (excluding NZ).

Because the foreign ownership is held by more than one party with no foreign party having dominant and thus controlling ownership of Virgin Australia?

*shrugs* Beats me, that's only a guess.....

 

[serfty]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

To paraphrase, I believe with the "Qantas Sale Act", total foreign ownership is restricted to 49%.

 

[Fruitcake]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

How does VA get around the foreign ownership laws? Going off this article after capital raising shareholdings will be Virgin Group 10%, EY 22.2% & SQ 22.1%, so 54.3% in foreign hands (excluding NZ).

They implemented a funky new capital structure last year whereby VA International is nominally a separate unlisted company.
Virgin Australia Announces Proposed New Structure | Virgin Australia

I think a similar scheme was used to allow Ansett to keep flying internationally as an Australian airline after it was acquired by Air New Zealand.

 

[Plutonus]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

They implemented a funky new capital structure last year whereby VA International is nominally a separate unlisted company.
Virgin Australia Announces Proposed New Structure | Virgin Australia

I think a similar scheme was used to allow Ansett to keep flying internationally as an Australian airline after it was acquired by Air New Zealand.

Exactly, a 100% foreign owned airline can fly domestically in Australia, just not internationally.

 

[bismarck]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

I quite enjoyed this little jab from QF

''The decision of these shareholders to invest in Virgin Australia's loss-making strategy highlights that these airlines aren't subject to the same commercial realities as Qantas.''

Read more: 'No longer a monopoly': Virgin Australia chief hits back at Qantas claims

 

[Sethor]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

I think a similar scheme was used to allow Ansett to keep flying internationally as an Australian airline after it was acquired by Air New Zealand.

I believe New Zealand owned operations are excluded from foreign ownership restrictions, vice versa with Australian airlines operating in NZ like Jetconnect.

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

I quite enjoyed this little jab from QF

''The decision of these shareholders to invest in Virgin Australia's loss-making strategy highlights that these airlines aren't subject to the same commercial realities as Qantas.''

Read more: 'No longer a monopoly': Virgin Australia chief hits back at Qantas claims

JB's argument to hit back here is fundamentally flawed.

This isn't about breaking monopolies or embarking on some God given crusade. It's just a flexing based on free market principles. That is, JB's argument should be, crudely and in a nutshell, we live in capitalist Australia, so put up and shut up, or close up and move to Russia.

JB's purporting of benefits would seem to argue that the ends justify the means. That's a bad fundamental foundation for regulation and leaves the door open to QF to attack back.

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

This might need a thread split, and a move to the Qantas forum, but now Qantas has started (or rather, tried to start) a social media campaign complaining about this "injustice" and regulation, asking the government to intervene. On Twitter, the hashtag is #fairgo4qantas

Someone call Merriam-Webster and tell them that the definition of 'blunder' needs to be updated posthaste.

The gallery is definitely coming out more to slam Qantas but some are criticising the campaign. Reminds me a lot of George W Bush - everyone hates him but there's quite a strong contingent that still believes in his rights.

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

To paraphrase, I believe with the "Qantas Sale Act", total foreign ownership is restricted to 49%.

Yes with several sub tiers by single entities which is a massive massive hand brake as we all know.

I have to agree with most that the playing field needs to be leveled. I would rather see that than QF whittled down by 1000 cuts by SQ and Etihad with a cough VA product....

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

I have to agree with most that the playing field needs to be leveled. I would rather see that than QF whittled down by 1000 cuts by SQ and Etihad with a cough VA product....

QF may be stubborn and a bogged-down airline of old but they aren't that stupid. That said, the ultimate solution (geez, that sounds almost naz_) may be that Australia no longer will have a true Australian airline. Also, I guess they may have to give up the name, "Qantas".

 

[Sethor]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

VA is bending the rules & I think QF is entitled to jump up & down regarding the recent capital raising. VA's ownership structure should be looked at by the government & the Qantas Sales Act either be enforced or repealed. VA would cry foul, if QF managed to find a way for EK to buy in 25+%.

 

[anat0l]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

VA is bending the rules & I think QF is entitled to jump up & down regarding the recent capital raising. VA's ownership structure should be looked at by the government & the Qantas Sales Act either be enforced or removed. VA would cry foul of QF managed to find a way for EK buy in 25+%.

How are VA bending the rules?

The rules are there and VA is doing what it wants in compliance with them. QF is entitled to do the same; I assume their own corporate team is not complete devoid of acumen commensurate to VA and its key stakeholders.


I suppose if anything people may question the morals and ethics of the situation, and let's be frank - those do matter as well (though in a capitalist, free market society, they unfortunately matter very little, and much the same in a court of law). If it is an argument on that then there may be a case to be had.

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

VA is bending the rules & I think QF is entitled to jump up & down regarding the recent capital raising. VA's ownership structure should be looked at by the government & the Qantas Sales Act either be enforced or repealed. VA would cry foul, if QF managed to find a way for EK to buy in 25+%.

I actually think VA is playing very cleverly within the rules however I also think the 'rules' will be looked at. I think this has been going on a long time and it reached a tipping point.

 

[Sethor]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

So you actually believe the majority ownership of VA is by Australian/New Zealand interests? Under the QSA VA is restricted to 49% foreign ownership, they have found a way to circumvent this.

 

[Fruitcake]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Under the QSA VA is restricted to 49% foreign ownership, they have found a way to circumvent this.

The Qantas Sales Act only places limits on ownership of Qantas. It's the Air Navigation Act 1920 which applies the more general restriction on Australian international airlines.

 

[dk4]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

I actually think VA is playing very cleverly within the rules however I also think the 'rules' will be looked at. I think this has been going on a long time and it reached a tipping point.

I agree, but I think that any investigation will need to be wide ranging, and investigate whether it is in the national interest that one airline group have a 65% market share. (Any Management 101 uni student should be able to list off the ways that such a dominant player can abuse that kind of market position. In fact we have seen one classic example with Qantas' capacity war against Virgin, which has forced Virgin to take the action that we are discussing in this very thread.)

IMO the end result, of any changes to the QSA, should be conditional on QAN divesting itself of Jetstar.

 

[777]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

IMO the end result, of any changes to the QSA, should be conditional on QAN divesting itself of Jetstar.

Or Jetstar divesting itself of Qantas...

 

[zainman]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

QF have launched a petition:

Qantas

 

[Fruitcake]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Things getting more interesting - VA is reported to have been seeking legal advice about suing Alan Joyce over the content of his letter to Qantas employees.

Virgin mulls legal action against Qantas boss

It is believed the Virgin board, due to hold its annual meeting in Brisbane on Wednesday, thinks the Qantas note implies it is not acting in the interests of all shareholders. The Virgin capital raising has sparked an extraordinary war of words between the two airlines.
...
A source close to Virgin said the airline believes Qantas has gone “too far” and its potential legal action is a “reaction to a defamatory email”.

 

[pauly7]

Re: Virgin's war chest to attract the lucrative corporate and government passenger se

Things getting more interesting - VA is reported to have been seeking legal advice about suing Alan Joyce over the content of his letter to Qantas employees.

Virgin mulls legal action against Qantas boss

I really wish Virgin would put HALF the effort they do into creating complex financial structures and now suing people into focusing on actually improving their customer facing business

As I wait in a massive line to check in without NGCI and they under roster check in staff, as I sit in a dirty white lounge inhaling hot dog fumes, as I sit on a VA 737 with no IFE and average J food I'm not going to be admiring their financial structures and lawsuits that's for sure