VAH - Virgin Australia Holdings

[qldfrog]

Virgin should collapse, i know we need more than one airline but funding a collapse airline is just throwing money and we do not even get a share in either of the 2
I understand the emergency need but asking some shares should be a minimum

 

[Miner]

Virgin should collapse, i know we need more than one airline but funding a collapse airline is just throwing money and we do not even get a share in either of the 2
I understand the emergency need but asking some shares should be a minimum

I am not a VAH holder. Incidentally wrote an open letter to Sir Bronson today through LinkedIn to come and steer the sinking ship whereas he is taking glory on Virgin Atlantic. Probably I would never get a reply because LinkedIn profile most likely is maintained by his one of the associates.
Returning to VAH itself, I respectfully disagree that VAH should collapse on a big picture. Government has bailed few companies and spoiled many millions on few Royal Commissions.
If Government is smart (?) then they would put some KPI, ask for an interest, have Qantas to be a minority share holder of VAH as a precondiiton to put some money to Qantas as well with intelligent correlation money loaned linked with PE or Profitability etc.
That will save all of us from paying absorbant prices on air fares. At the end, tax payers will pay towards excess fare through monopoly. Companies using ONLY Qantas service will pay more. Only beneficial will be Alan Joyce and his shareholders.
With competition war, Virgin could not sustain and Qantas were hungry and efficient - no doubt on that.
We need to see through medium to long term for billion dollar investment.

 

[qldfrog]

M

I am not a VAH holder. Incidentally wrote an open letter to Sir Bronson today through LinkedIn to come and steer the sinking ship whereas he is taking glory on Virgin Atlantic. Probably I would never get a reply because LinkedIn profile most likely is maintained by his one of the associates.
Returning to VAH itself, I respectfully disagree that VAH should collapse on a big picture. Government has bailed few companies and spoiled many millions on few Royal Commissions.
If Government is smart (?) then they would put some KPI, ask for an interest, have Qantas to be a minority share holder of VAH as a precondiiton to put some money to Qantas as well with intelligent correlation money loaned linked with PE or Profitability etc.
That will save all of us from paying absorbant prices on air fares. At the end, tax payers will pay towards excess fare through monopoly. Companies using ONLY Qantas service will pay more. Only beneficial will be Alan Joyce and his shareholders.
With competition war, Virgin could not sustain and Qantas were hungry and efficient - no doubt on that.
We need to see through medium to long term for billion dollar investment.

My point is taxpayer should get some qantas shares..probably worth something, and some in virgin if we give them money
I am a shareholder of neither, not enamoured with Virgin and try to avoid Qantas when flying international.
Got ff cards on both.
Good thing is my taxes are getting lower and lower as my incomes collapses so in many ways, i will not pay for these...
Not exactly a great news

 

[Garpal Gumnut]

M


Got ff cards on both.

I cashed out my points on both QAN and VAH yesterday via a beard trimmer ( for my sideburns as my barber no longer visits me at the hotel and I refuse to sit with the hoi poloi talking sober rubbish) and vouchers for stores.

gg

 

[frugal.rock]

So the options are;
Bankruptcy
Foreign investment takeover
Aus guv/ states bailout of sorts
Aus guv takeover, turn it into a public transport and freight airline.
Qantas should have remained in government ownership. Too expensive to buy back, however Virgin may be bought out for a song.
Letting it go to foreign investment would be shooting ourselves in the foot.
https://mobile.abc.net.au/news/2020...line-from-qld-government/12160946?pfmredir=sm
I say, take over by the Australian Government.
A solid investment for the future of Australia.
A bail out of Qantas to a certain degree also to keep it afloat, and bring partial ownership and backing back to the Australian people's.
My

F.Rock

 

[sptrawler]

If the Chinese get full ownership, Qantas would have to watch out, the Chinese have very deep pockets.
They could subsidise a price war to put Qantas out of business, with the loose change in the ashtray.

 

[Dona Ferentes]

take off VAH from the boards

 

[sptrawler]

https://www.smh.com.au/business/com...voluntary-administration-20200420-p54lcd.html

Virgin Australia is preparing to go into voluntary administration, unable to survive under the weight of enormous debts and starved of cash by the coronavirus travel shutdown.
The airline is saddled with around $5 billion in debt and was running out of money as the coronavirus pandemic forced it to almost completely shut down its business.


The company being reborn through a deed of company arrangement struck in administration is "the airline's only chance", said a source familiar with Virgin's struggles.

In administration, an independent party will assess Virgin’s position and negotiate with shareholders and creditors about the best outcome for the business.

 

[frugal.rock]

https://www.abc.net.au/news/program...oised-to-enter-voluntary/12166938?jwsource=cl

 

[Dona Ferentes]

The debt was there well before coronavirus arrived.

 

[sptrawler]

Interesting when you compare the news in February 2019

https://australianaviation.com.au/2019/02/virgin-australia-reports-return-to-profitability/

Then their full year financial results in August 2019

https://www.asx.com.au/asxpdf/20190828/pdf/447xydy6wbtvmx.pdf

Not the sort of business for the faint hearted. IMO

Your right Donna, this post from August last year, the losses were mounting up over a long period and a lot of smoke and mirrors seemed to be happening.

 

[sptrawler]

This article sums up the issues well:
https://www.abc.net.au/news/2020-04...alls-for-lifeline-against-insolvency/12165550
From the article:
Ratings agencies downgrade Virgin further, predict 'default'
Virgin now has $5 billion of debt that no one — including its own foreign shareholders — wants to touch.

Virgin Australia is majority foreign-owned by Etihad Airways (20.94 per cent stake), Singapore Airlines (20.09 per cent), Nanshan Group (19.98 per cent), HNA Group (19.82 per cent) and Richard Branson's Virgin Group (10.42 per cent).

Singapore Prime Minister Lee Hsien Loong had previously suggested his country's airline was not in a position to assist Virgin, given Singapore Airlines has had to reorganise its own finances to survive the crisis.

And despite calls for billionaire founder Richard Branson to personally stump up cash, he has remained silent.

Jonathan Rochford, a funds manager at Narrow Road Capital, told ABC News Virgin Australia had been poorly managed for years, and he thought insolvency would be the best option.

"Virgin has a myriad of problems and a government bailout without insolvency will get in the way of fixing these problems," he said.

Mr Rochford argues Virgin has consistently struggled to attract the high paying customers to be a strong competitor to Qantas.

After an IPO at $2.25 in 2003, its shares have rarely traded above $0.50 in the past decade, he said.

"The company has pursued growth over profits adding marginal routes that weighed down the good business it had servicing the capital city routes," Mr Rochford said.

"This failed strategy has left the airline overloaded with aircraft.

"The sale and subsequent repurchase of part of the frequent flyer business has left it loaded with debt, with most of the fleet and the frequent flyer business locked up by secured creditors."
He said a government bailout, if put in place without insolvency, would "delay and obstruct the necessary restructuring and increase the risk that Virgin ultimately ends up like Ansett".

The vultures are hovering.

 

[Value Collector]

I cashed out my points on both QAN and VAH yesterday via a beard trimmer ( for my sideburns as my barber no longer visits me at the hotel and I refuse to sit with the hoi poloi talking sober rubbish) and vouchers for stores.

gg

A few months back I used a bunch of Virgin points to book two business class return flights to he UK for me and the wife, the actual flights are on Etihad (partner airline).

I might have some interesting times ahead seeing how this pans out, eg if virgin goes bust are my flights on Etihad still valid??? and if I have to cancel or refund due to restrictions will if be possible if the Virgin points program no longer exists???

Hopefully if Virgin go belly up Etihad still honour the flights and issue credits or rebooking if I have to cancel.

I really hope virgin make it through this thing.

 

[sptrawler]

A few months back I used a bunch of Virgin points to book two business class return flights to he UK for me and the wife, the actual flights are on Etihad (partner airline).

I might have some interesting times ahead seeing how this pans out, eg if virgin goes bust do are my flights to valid??? and if I have to cancel or refund due to restrictions will if be possible if the Virgin points program no longer exists???

Hopefully if Virgin go belly up Etihad still honour the flights and issue credits or rebooking if I have to cancel.

I really hope virgin make it through this thing.

My wife and I were booked to fly to Tokyo on Thursday on Cathay Pacific, they have given a one year credit, that has to be used withing 12 months of the original booking date (not date of flight).

 

[Value Collector]

My wife and I were booked to fly to Tokyo on Thursday on Cathay Pacific, they have given a one year credit, that has to be used withing 12 months of the original booking date (not date of flight).

Yep, most airlines are doing similar thing, I am just concerned because My flights were booked with reward points, there may be some technical hitch if virgin goes belly up, Just have to wait and see I guess.

 

[jbocker]

OK Virgin Airlines has gone under, does QANTAS (Jetstar) simply pick up the slack in the domestic market. Not that there is much to pick up at this point, but if Australia keeps gaining on the virus we may open the interstate routes LONG before the international routes. It re-engages some of the QANTAS workforce.
Should any future Airline in Australia work with the same ownership rules as QANTAS, making it easier to justify govt bail outs in future scenarios. Should we be looking at growing up junior Aussie airline company(s) to fill the role. What happens to Virgins aircraft assets, opportunity to furnish a growing Aussie airline, cheaply?
Just talking out of my hat.

 

[Smurf1976]

does QANTAS (Jetstar) simply pick up the slack in the domestic market. Not that there is much to pick up at this point, but if Australia keeps gaining on the virus we may open the interstate routes LONG before the international routes. It re-engages some of the QANTAS workforce.

Qantas (incl Jetstar) is the only direct competitor so presumably the answer would be yes.

That said, if there's still some community concern about being in confined spaces (eg aircraft) and assuming Qantas puts its fares up then I'd expect at least some increase in people driving interstate. Not likely a huge number but rationally there'd be some who are what I'll term "marginal flyers" and they'll decide to steer clear of planes for a while probably.

Other than that, well the only other option is trains or buses where they operate on the same route or for Vic - Tas going by sea. Using those is normally not really a direct competition to air travel though. People who go by train are usually people who like trains. People who cross Bass Strait by ship are usually doing so because they're taking a vehicle. Neither could really be seen as direct competition to the airlines for the majority of passengers.

 

[Logique]

April 2020 - voluntary administration.

Government bailout? Where the sun don't shine Branson you creep. You don't even pay tax in this country.

Private equity will step up. Or the current well-heeled backers. The staff have access to the considerable government safety net.

 

[Logique]

Backers namely, from post #92 above (SpT). Why should taxpayers subsidize any of these people?

"Virgin now has $5 billion of debt...
...Virgin Australia is majority foreign-owned by Etihad Airways (20.94 per cent stake), Singapore Airlines (20.09 per cent), Nanshan Group (19.98 per cent), HNA Group (19.82 per cent) and Richard Branson's Virgin Group (10.42 per cent).
Singapore Prime Minister Lee Hsien Loong had previously suggested his country's airline was not in a position to assist Virgin, given Singapore Airlines has had to reorganise its own finances to survive the crisis.
And despite calls for billionaire founder Richard Branson to personally stump up cash, he has remained silent.."

 

[sptrawler]

OK Virgin Airlines has gone under, does QANTAS (Jetstar) simply pick up the slack in the domestic market. Not that there is much to pick up at this point, but if Australia keeps gaining on the virus we may open the interstate routes LONG before the international routes. It re-engages some of the QANTAS workforce.
Should any future Airline in Australia work with the same ownership rules as QANTAS, making it easier to justify govt bail outs in future scenarios. Should we be looking at growing up junior Aussie airline company(s) to fill the role. What happens to Virgins aircraft assets, opportunity to furnish a growing Aussie airline, cheaply?
Just talking out of my hat.

There is every likely hood that private equity will pick up Virgin, strip it back to bare bones and continue operating as a low cost national airline.