What is Virgin Australia's strategy (post-administration)?

[RooFlyer]

^^
Agreed.
Otherwise, it may end up another "SQ WILL TAEK OVAH VA !!!!11! and will bring them into TeH sTaR aLLiaNcE !!!111!!" type of situation if this drags on for years.

Sorry, you have to explain this construction to me. I see you posted it a number of times - what's the context?

 

[HS-TQE]

Sorry, you have to explain this construction to me. I see you posted it a number of times - what's the context?

It goes back to the Borghetti and early Scurrah days when Etihad (and Hainan) were in financial trouble and news sources kept dropping articles at least twice a year about SQ initiating a "takeover" if not extended stake through "creep provisions" (since all of VA 1.0's airline owners were subject to the 20% rule) back when VA 1.0 was trading on the ASX.

A lot of users across the social media platforms including a few on here were hopeful of a SQ 'takeover', which ended up becoming a joke when it came to similar situations like now with QR.

Edit: The SQ/VA "takeover" media circus goes all the way back to 2016 when NZ sold up their stake in VA.

Old 2016 article 1: Singapore Airlines 'good fit' for Virgin Australia - Travel Weekly
Old 2016 article 2: Bloomberg - Are you a robot?

 

[muppet]

Here is the exact headline from The Australian, for anyone interested.

Interest in Rex assets pushes back Virgin IPO​

A float of Virgin Australia has been pushed back by about a year, say sources, after the carrier recently entered talks with Rex about taking on some assets from the failed regional carrier.

I could post the article itself, but it might be taken down for copyright issues.

I know its a week or so old, but I love this headline…

Let me fix it for The Aus:

Interest in Rex assets Lack of market interest in VA pushes back Virgin IPO​

 

[kpc]

I understand Bain have already found a new CEO to replace Jane but are waiting for the right time to make the announcement....

 

[RooFlyer]

I know its a week or so old, but I love this headline…

Let me fix it for The Aus:

Interest in Rex assets Lack of market interest in VA pushes back Virgin IPO​

Or even

Interest in Rex assets Lack of market interest Investment in VA by global airline pushes back Virgin IPO​

 

[jakeseven7]

I know its a week or so old, but I love this headline…

Let me fix it for The Aus:

Interest in Rex assets Lack of market interest in VA pushes back Virgin IPO​

It’s certainly been a very tough sell.

Next CEO should hopefully have more luck.

 

[Harrison_133]

FY24 results announced:

• Group revenue of $5.4 billion, an increase of 6.8% over FY23[1].
• Underlying Earnings Before Interest and Tax (EBIT) of $519 million (9.7% margin), an increase of 18.2% over FY23.
• 19.2 million guests flown on an average of nearly 400 daily flights.
• Significant investment in customer experience and fleet renewal, with six new Boeing 737 MAX-8 aircraft delivered and 14 Boeing 737-800 aircraft reconfigured with latest-generation interiors.
• Continuous improvement in operational performance, with industry leading results in the 4th quarter.
• Eight Enterprise Agreements successfully renegotiated across various workgroups.
• A thank you gift of 54,000 Velocity Points on top of Virgin Australia’s existing $1,000 staff travel credit.
• 23.8% increase in Velocity Frequent Flyer revenue to $409 million, surpassing 12 million members.

Source: Virgin Australia delivers strong FY24 results, driven by ongoing transformation

 

[RooFlyer]

Pretty strong growth in Velocity - maybe members returning after the hard times?

Good to see something extra for staff as well.

 

[HS-TQE]

Velocity was always the most profitable part of both incarnations of Virgin Australia, carrying most parts of the business even when the mainline Domestic Flying has its downturns in revenue, so can't say I'm not surprised there.

 

[RooFlyer]

Granted - I was more referring to the 24% year on year growth in Velocity revenue and a 13% growth in active members.

 

[Saab34]

It’s heading in the right direction.

Margin should increase on the back of Rex demise boosting city margins and newer equipment coming in.

Still some of work to run on Margin, 10/11% is where the target should be. I’d be watching that closely and see if they can improve on that.

 

[Saab34]

I actually missed this bit.

It’s hard to get a read on how profitable the ‘flying’ side of the business is. Doesn’t appear as flash as previously thought.

Virgin said on Monday that earnings jumped 18 per cent in the 12 months to June 30, making it the second profitable year in a row after a decade of losses. But new accounts filed with the Australian Securities and Investments Commission show overall profits rose 300 per cent to $545.4 million after it banked $280.7 million in expiring flight credits.

 

[RooFlyer]

Oops. Where is the ACCC when you need them?

 

[Saab34]

Another $200m due to expire next June so expect another large figure next FY.

Bain will argue they took on the credits on in good faith when they took the business out of administration.

What stands out for me, is the flying business still isn’t that profitable. Jetstar’s domestic flying which is smaller vs Virgin, still had $300m EBIT at 11% margin. Virgin appears be about half that. Still a way off the Virgin Blue days.

 

[justinbrett]

Another $200m due to expire next June so expect another large figure next FY.

Bain will argue they took on the credits on in good faith when they took the business out of administration.

What stands out for me, is the flying business still isn’t that profitable. Jetstar’s domestic flying which is smaller vs Virgin, still had $300m EBIT at 11% margin. Virgin appears be about half that. Still a way off the Virgin Blue days.

But a lot of JQ’s costs are absorbed by QFg. That was part of the argument against divestment, JQ could not continue to operate as it currently does, due to the synergies with QF and a habit to date of bleeding QF mainline to prop up JQ. Plus QFg don’t lease aircraft so I assume that increases margins.

 

[737NG]

Virgins press release states that the results don’t include the expiring flight credits.

 

[Saab34]

We will get a better read of the financials when they go public.

Although I do recall when they had been public previously, was a bit of cash ‘moving’ around behind the scene, especially between Velocity and VAA. Things had been much worse behind closed doors.

 

[HS-TQE]

They was also a bit of "money/asset" stripping in the 1.0 days when the previous owners of Singapore/Etihad/et al "loaned" money from Velocity at one point, leading to Velocity being a "creditor"

 

[Saab34]

Was a few hundred million I recall that was borrowed from Velocity. It was reported that even the finance teams inside VAA didn’t know about it.

The market most certainly has no idea. Was a nice surprise when the creditors reports started coming out.