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Obzerva
Posts: 411
Joined: Wed Jan 11, 2017 3:48 am

Re: Australian Aviation Thread - August 2019

Tue Aug 27, 2019 11:44 pm

xiaotung wrote:
I do expect VA to pull out of HKG altogether. The alliance with HNA was originally designed for Mainland China travellers who use HKG as a transit point but it never panned out even before the current Hong Kong situation. The VS alliance was really a last resort solution but the current political tension in Hong Kong means the transit business is finished and there is no end in sight. It would take years to recover even if it does. Do VA really have the money and patience to wait? I don't think so.

What worries me is that the new CEO has not made any major decisions after many months in the job which could mean that there is very little he could do. The airline is screwed by Borghetti.


VA's venture in to HKG with the combination of the HNA Group losses and HKG's current turmoil kind of reminds me of the 90s with AN's venture in to Asia, and then the 1997 financial crisis hit.
 
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SCFlyer
Posts: 289
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Re: Australian Aviation Thread - August 2019

Tue Aug 27, 2019 11:56 pm

https://www.executivetraveller.com/virg ... -rightsize

Quoted from above link:
Executive Traveller wrote:
Some routes and destinations "deemed uneconomic" are likely to be cut, with reduced capacity (fewer flights or switching to smaller aircraft) expected across the back end of 2019, while the overall network will be "re-optimised to align frequencies with demand."

The sweeping set of reviews will be overseen by a streamlined corporate structure "to integrate the corporate, operational and commercial functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia into single functions and points of accountability."


I think it's a strong hint that Tigerair AND Virgin Australia Regional may increasingly likely be absorbed if not merged. I would not be surprised if Tigerair and Virgin Australia Regional is merged with the mixed Fokker/A320 fleet, whilst the 737s currently at Tigerair is returned to mainline, with the eventual aim of merging all 3 into one in the longer term.

Short Haul International and HKG is very likely to be under heavy review, despite the recently signing of a JV with VS at the later.
 
getluv
Posts: 515
Joined: Thu Jun 11, 2015 12:11 pm

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:01 am

CityRail wrote:
getluv wrote:
VA Results are in: A$315m loss.

Redundancies galore. Way worse than the guidance than they provided in May.

https://www.smh.com.au/business/compani ... 52law.html


The thing is EBITDA is decreasing, that a worry.

Also VAH has way too much cash, (1.7 Billion), I wonder if they can repurchase some shares to reduce the complex board structure, yet it will significantly draw up the D/E ratio.

Withdrawing from certain markets? Perhaps withdrawal from some NZ markets? And keep only SYD-HKG?

I would agree that VAH need some deep restructuring to ensure the business growth they enjoy will return in profit.

Perhaps this would be a good time to consider investing into VAH?


With cash flow decreasing and debt increasing, it is not ideal.
Last edited by getluv on Wed Aug 28, 2019 12:13 am, edited 1 time in total.
I'm that bad type.
 
kriskim
Posts: 373
Joined: Wed Jun 15, 2016 12:44 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:07 am

log0008 wrote:
Asiana Airlines will be operating a once a week MEL-ICN charter service from 27/12- 21/2 schedule is: OZ6037 0730 OZ6047 0900 Friday 777


Very exciting! Would love to see a permanent year round MEL-ICN service, TBH was not expecting OZ at all.
A world built upon connectivity.
 
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SCFlyer
Posts: 289
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:11 am

The first person on the "chopping block" on the back of the recent VA financial results. Merren McArthur, current CEO of Tigerair has announced her resignation. Her official departure date has not be announced.

https://twitter.com/AvWeekScho/status/1 ... 6972774400
 
346fetish
Posts: 42
Joined: Thu Feb 22, 2018 12:00 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:28 am

Air Canada VP of Global Sales and Alliances John MacLeod to take over Merren McArthur's position as VA Chief Commercial Officer effective 08OCT19.
"BA have got waterfalls in their head office. The only time we have waterfalls in the Ryanair office is when the toilet leaks."
 
QF742
Posts: 152
Joined: Sat Aug 18, 2018 1:00 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:37 am

SCFlyer wrote:
https://www.executivetraveller.com/virgin-australia-launches-operation-rightsize

Quoted from above link:
Executive Traveller wrote:
Some routes and destinations "deemed uneconomic" are likely to be cut, with reduced capacity (fewer flights or switching to smaller aircraft) expected across the back end of 2019, while the overall network will be "re-optimised to align frequencies with demand."

The sweeping set of reviews will be overseen by a streamlined corporate structure "to integrate the corporate, operational and commercial functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia into single functions and points of accountability."


I think it's a strong hint that Tigerair AND Virgin Australia Regional may increasingly likely be absorbed if not merged. I would not be surprised if Tigerair and Virgin Australia Regional is merged with the mixed Fokker/A320 fleet, whilst the 737s currently at Tigerair is returned to mainline, with the eventual aim of merging all 3 into one in the longer term.

Short Haul International and HKG is very likely to be under heavy review, despite the recently signing of a JV with VS at the later.


I keep seeing a JV between VA/VS mentioned in this thread. My understanding was this is just a codeshare arrangement and not a JV. Can someone confirm please?
 
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SCFlyer
Posts: 289
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:45 am

QF742 wrote:

I keep seeing a JV between VA/VS mentioned in this thread. My understanding was this is just a codeshare arrangement and not a JV. Can someone confirm please?


https://www.flightglobal.com/news/artic ... -t-458797/

Includes jointly setting prices, co-ordinating inventory and co-ordinating scheduled where possible, and both had to apply to the respective competition commissions to get the proposal approved.

This is beyond a simple code-share agreement, where in most cases simple codeshare agreements does not require competition commission approval.
 
moa999
Posts: 548
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 1:09 am

CityRail wrote:
Also VAH has way too much cash, (1.7 Billion), I wonder if they can repurchase some shares to reduce the complex board structure, yet it will significantly draw up the D/E ratio.
?


There's cash and real cash.
For a start it offsets the massive amount of debt (not far behind QAN for a much small operation).

But a lot of it is temporary.. Customer pays upfront, then takes flight within 30 days where VA uses cash to pay for fuel, wages etc
 
Lufthansa
Posts: 2593
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 1:41 am

Borghetti made a real mess of this one. He was focused for way way way
too long on how to beat Qantas, rather than how to keep his own airline
profitable. Then add in that crazy ownership structure that has so many conflicting
interests its not funny... all of which had one objective, to create a frequent flyer base
and connections to feed their own long haul networks, you were asking for trouble.

Looks like Air NZ was right to dump them.
 
smi0006
Posts: 2300
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 1:51 am

Lufthansa wrote:
Borghetti made a real mess of this one. He was focused for way way way
too long on how to beat Qantas, rather than how to keep his own airline
profitable. Then add in that crazy ownership structure that has so many conflicting
interests its not funny... all of which had one objective, to create a frequent flyer base
and connections to feed their own long haul networks, you were asking for trouble.

Looks like Air NZ was right to dump them.


Agreed - and looks like QF was right to not give Borghetti the top job! Wonder where he will pop up next?

It’s going to be a tough recovery for them considering they have squandered a lot. Not to mention some potential headwinds ahead.
 
346fetish
Posts: 42
Joined: Thu Feb 22, 2018 12:00 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 2:03 am

smi0006 wrote:
Lufthansa wrote:
Borghetti made a real mess of this one. He was focused for way way way
too long on how to beat Qantas, rather than how to keep his own airline
profitable. Then add in that crazy ownership structure that has so many conflicting
interests its not funny... all of which had one objective, to create a frequent flyer base
and connections to feed their own long haul networks, you were asking for trouble.

Looks like Air NZ was right to dump them.


Agreed - and looks like QF was right to not give Borghetti the top job! Wonder where he will pop up next?

It’s going to be a tough recovery for them considering they have squandered a lot. Not to mention some potential headwinds ahead.


Borghetti is playing golf now / retired.
"BA have got waterfalls in their head office. The only time we have waterfalls in the Ryanair office is when the toilet leaks."
 
moa999
Posts: 548
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 2:17 am

smi0006 wrote:
Agreed - and looks like QF was right to not give Borghetti the top job! Wonder where he will pop up next?.


At the time both AJ and JB were appointed, one would have though Borghetti had the easiest job.

Take a low cost airline upmarket and expand market share. He's expanded, but seemingly grown costs more than yield.

Whereas at the same time AJ has managed to take costs out of a business while retaining yield (not to say everything is perfect on the QF side)
 
DavidByrne
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 2:32 am

SCFlyer wrote:
The HKG decision courtesy of HNA/HX is now closer to untenable (if not untenable).

NZ is a very marginal market for VA, although the NZ operation as a whole is loss making with the NZ spat not helping them.
At most VA should really be keeping East Coast-AKL, BNE/MEL-CHC and BNE-WLG as part of their alliance/JVs with their partners (e.g SQ, DL, HX, etc).
The current OOL-AKL flight without looking at the loads/yields could be moved up to BNE.
IIRC NTL is subsidising the NTL-AKL seasonal flights, although I can't see that lasting once the subsidy ends.

And then there's BNE-DUD - an outlier also. I'd be surprised if that made money. IIRC it was part of the price for ALLOWING the VA/NZ hookup years ago. Presumably they're no longer under any obligation in that regard now the relationship is no more?
This is not my beautiful house . . . This is not my beautiful wife
 
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CraigAnderson
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 3:26 am

What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?
 
waoz1
Posts: 533
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 3:38 am

Strange things happening with new Citilink service

https://www.airlineratings.com/news/new ... ice-limbo/
 
xiaotung
Posts: 1000
Joined: Fri Jan 06, 2006 7:58 pm

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 3:54 am

346fetish wrote:
smi0006 wrote:
Lufthansa wrote:
Borghetti made a real mess of this one. He was focused for way way way
too long on how to beat Qantas, rather than how to keep his own airline
profitable. Then add in that crazy ownership structure that has so many conflicting
interests its not funny... all of which had one objective, to create a frequent flyer base
and connections to feed their own long haul networks, you were asking for trouble.

Looks like Air NZ was right to dump them.


Agreed - and looks like QF was right to not give Borghetti the top job! Wonder where he will pop up next?

It’s going to be a tough recovery for them considering they have squandered a lot. Not to mention some potential headwinds ahead.


Borghetti is playing golf now / retired.


I don't think anyone would hire John Borghetti and James Hogan ever again.
 
Obzerva
Posts: 411
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 4:04 am

CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


Depends I imagine if that would increase the brand licencing to Virgin group for more use of the "Virgin" name.
 
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CraigAnderson
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 4:30 am

xiaotung wrote:
I don't think anyone would hire John Borghetti and James Hogan ever again.


So much for the 'JBJH Airline Consultants' joint business which they announced this morning LOL
 
QF742
Posts: 152
Joined: Sat Aug 18, 2018 1:00 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 5:06 am

SCFlyer wrote:
QF742 wrote:

I keep seeing a JV between VA/VS mentioned in this thread. My understanding was this is just a codeshare arrangement and not a JV. Can someone confirm please?


https://www.flightglobal.com/news/artic ... -t-458797/

Includes jointly setting prices, co-ordinating inventory and co-ordinating scheduled where possible, and both had to apply to the respective competition commissions to get the proposal approved.

This is beyond a simple code-share agreement, where in most cases simple codeshare agreements does not require competition commission approval.


Thank you for clarifying.
 
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CraigAnderson
Posts: 296
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 5:07 am

QF742 wrote:
I keep seeing a JV between VA/VS mentioned in this thread. My understanding was this is just a codeshare arrangement and not a JV. Can someone confirm please?


It's a codeshare right now but the airlines either have applied for or intend to apply for "upgrading" this to a JV.
 
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eta unknown
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 5:37 am

A few posters above have commented that more codesharing etc. with VA and other carriers outside their ownership sphere should be done. FYI many have tried and been knocked back- on orders from SQ.
 
zkncj
Posts: 3261
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 6:40 am

CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


Would have thought the TT cost base would be more likely to make money at the moment that the VA cost base.

Maybe TT should be sold off, even maybe sold back to Scoot?


At what point are VA’s investors going to pull the plug on topping up VA’s bank account with the little or negative returns back in there investment.

If VA was to be put into Administration, do we think the Australian government would step in or let them follow the same fate as AN.
 
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RyanairGuru
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 6:46 am

zkncj wrote:
CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


Would have thought the TT cost base would be more likely to make money at the moment that the VA cost base.

Maybe TT should be sold off, even maybe sold back to Scoot?


At what point are VA’s investors going to pull the plug on topping up VA’s bank account with the little or negative returns back in there investment.

If VA was to be put into Administration, do we think the Australian government would step in or let them follow the same fate as AN.


Same fate as Ansett.

Virgin Australia would probably be ligquidated in that scenario but some private equity will snap up Tiger. With their low cost base and a substantial amount of capacity out of the market they would be well placed to thrive... what's old would be new again ;)
Worked Hard, Flew Right
 
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eta unknown
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 6:51 am

The govt. would not step in as there is already a healthy competitor in the market.
As for the next round of cash injections, it'll be interesting to see who ponies up the cash.
No surprise Merryn is gone- too close to JB. However, there are a number of middle management guys I'd like to see gone from the SYD Grosvenor Place office.
 
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SCFlyer
Posts: 289
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 6:54 am

RyanairGuru wrote:
zkncj wrote:
CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


Would have thought the TT cost base would be more likely to make money at the moment that the VA cost base.

Maybe TT should be sold off, even maybe sold back to Scoot?


At what point are VA’s investors going to pull the plug on topping up VA’s bank account with the little or negative returns back in there investment.

If VA was to be put into Administration, do we think the Australian government would step in or let them follow the same fate as AN.


Same fate as Ansett.

Virgin Australia would probably be ligquidated in that scenario but some private equity will snap up Tiger. With their low cost base and a substantial amount of capacity out of the market they would be well placed to thrive... what's old would be new again ;)


Tigerair will very likely be rebranded in that scenario. No way any potential buyer will want to keep paying Tesamek royalties for the Tigerair name.
 
xiaotung
Posts: 1000
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 7:23 am

SCFlyer wrote:
RyanairGuru wrote:
zkncj wrote:

Would have thought the TT cost base would be more likely to make money at the moment that the VA cost base.

Maybe TT should be sold off, even maybe sold back to Scoot?


At what point are VA’s investors going to pull the plug on topping up VA’s bank account with the little or negative returns back in there investment.

If VA was to be put into Administration, do we think the Australian government would step in or let them follow the same fate as AN.


Same fate as Ansett.

Virgin Australia would probably be ligquidated in that scenario but some private equity will snap up Tiger. With their low cost base and a substantial amount of capacity out of the market they would be well placed to thrive... what's old would be new again ;)


Tigerair will very likely be rebranded in that scenario. No way any potential buyer will want to keep paying Tesamek royalties for the Tigerair name.


And how many people would change their choice of airline if VA removed Virgin from their brand name tomorrow? Probably no one! How is paying Richard Brandson royalities justified?
 
Sylus
Posts: 100
Joined: Fri Jan 30, 2015 10:14 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 7:46 am

DavidByrne wrote:
SCFlyer wrote:
The HKG decision courtesy of HNA/HX is now closer to untenable (if not untenable).

NZ is a very marginal market for VA, although the NZ operation as a whole is loss making with the NZ spat not helping them.
At most VA should really be keeping East Coast-AKL, BNE/MEL-CHC and BNE-WLG as part of their alliance/JVs with their partners (e.g SQ, DL, HX, etc).
The current OOL-AKL flight without looking at the loads/yields could be moved up to BNE.
IIRC NTL is subsidising the NTL-AKL seasonal flights, although I can't see that lasting once the subsidy ends.

And then there's BNE-DUD - an outlier also. I'd be surprised if that made money. IIRC it was part of the price for ALLOWING the VA/NZ hookup years ago. Presumably they're no longer under any obligation in that regard now the relationship is no more?


I wouldn't be so quick to judge.
 
Lufthansa
Posts: 2593
Joined: Thu May 20, 1999 6:04 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 7:48 am

xiaotung wrote:
SCFlyer wrote:
RyanairGuru wrote:

Same fate as Ansett.

Virgin Australia would probably be ligquidated in that scenario but some private equity will snap up Tiger. With their low cost base and a substantial amount of capacity out of the market they would be well placed to thrive... what's old would be new again ;)


Tigerair will very likely be rebranded in that scenario. No way any potential buyer will want to keep paying Tesamek royalties for the Tigerair name.


And how many people would change their choice of airline if VA removed Virgin from their brand name tomorrow? Probably no one! How is paying Richard Brandson royalities justified?



My guess? Long term marketing agreement. He only has a 10 percent stake in the company now and notice he doesn't bother come down
to Australia all the time anymore? It appears it's not worth his time/kind of pointless as long as the royalty cheques keep on flowing
in. He's already lost 3 virgin branded airlines before, it's business. The trouble for VA is, each one of their major shareholders will want
things largely focusing on them. That prevents something like one of them rebranding it as a franchise the way British Airways do in South
Africa with Comair. Too much time has gone buy now to bother buy the old Ansett brand and use that, not much value left in it now.

The only couple of things I an think of is:
1.Spin off tiger... left VA mainline fail. This would probably work, with the help of some investors. Unlikely to be popular with the shareholders
and probably only happen if VA files for bankruptcy.

2. One major airline buys out the others.

3. The entire assets are all sold off and a carrier like Alliance snaps some of them up cheap and starts a more regular
scheduled service. Although that sounds a bit out there, Alliance has made a hell of a lot more money in the last
decade than VA.

Either way I think they're in for rough times ahead. Etihad has shown with its other foreign investments it's no longer willing
to tolerate large losses, Singapore might be more so and perhaps their best hope but they won't want to see any of a return
to a low cost type of operation and close down lounges etc they pass their pax on or turn away business pax back to the
Qantas frequent flyer program, and the Chinese carriers haven't really been well exploited.
 
melpax
Posts: 1915
Joined: Mon Apr 25, 2005 12:13 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 8:20 am

SCFlyer wrote:
Tigerair will very likely be rebranded in that scenario. No way any potential buyer will want to keep paying Tesamek royalties for the Tigerair name.


Not to mention Tigerair's very low rent image.

This is tounge-in-cheek, but not far from the truth!

https://www.betootaadvocate.com/humans- ... er-flight/
Essendon - Whatever it takes......
 
SYDSpotter
Posts: 788
Joined: Tue Oct 30, 2012 9:10 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:00 am

moa999 wrote:
CityRail wrote:
Also VAH has way too much cash, (1.7 Billion), I wonder if they can repurchase some shares to reduce the complex board structure, yet it will significantly draw up the D/E ratio.
?


There's cash and real cash.
For a start it offsets the massive amount of debt (not far behind QAN for a much small operation).

But a lot of it is temporary.. Customer pays upfront, then takes flight within 30 days where VA uses cash to pay for fuel, wages etc


Correct, VA had $1.2bn of unearned revenue (i.e. upfront advanced passenger payments) at 30 June 2019, this in theory makes up the bulk of the cash balance of $1.7bn.
319_320_321_332_333_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
TN486T
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:12 am

Hmmmm, just a thought. QF's investment in Alliance now seems a "master stroke", especially if VA disappears. LOL
 
DavidByrne
Posts: 1435
Joined: Mon Sep 10, 2007 4:42 pm

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:49 am

Sylus wrote:
DavidByrne wrote:
SCFlyer wrote:
The HKG decision courtesy of HNA/HX is now closer to untenable (if not untenable).

NZ is a very marginal market for VA, although the NZ operation as a whole is loss making with the NZ spat not helping them.
At most VA should really be keeping East Coast-AKL, BNE/MEL-CHC and BNE-WLG as part of their alliance/JVs with their partners (e.g SQ, DL, HX, etc).
The current OOL-AKL flight without looking at the loads/yields could be moved up to BNE.
IIRC NTL is subsidising the NTL-AKL seasonal flights, although I can't see that lasting once the subsidy ends.

And then there's BNE-DUD - an outlier also. I'd be surprised if that made money. IIRC it was part of the price for ALLOWING the VA/NZ hookup years ago. Presumably they're no longer under any obligation in that regard now the relationship is no more?


I wouldn't be so quick to judge.

Can you elaborate?!!!
This is not my beautiful house . . . This is not my beautiful wife
 
CityRail
Posts: 57
Joined: Thu Jun 23, 2016 1:26 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:49 am

346fetish wrote:
Air Canada VP of Global Sales and Alliances John MacLeod to take over Merren McArthur's position as VA Chief Commercial Officer effective 08OCT19.


That is very interesting.

Does that mean closer relationship between VA and AC then?

I really hope the Alliances strategy from Air Canada can be brought into Virgin Australia. Without proper alliances, VA is really difficult to survive in the long term.
 
CityRail
Posts: 57
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:51 am

CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


If it rebrands to Virgin Blue, does it still need to pay license to Virgin Group?
 
CityRail
Posts: 57
Joined: Thu Jun 23, 2016 1:26 am

Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 9:55 am

Lufthansa wrote:
Borghetti made a real mess of this one. He was focused for way way way
too long on how to beat Qantas, rather than how to keep his own airline
profitable. Then add in that crazy ownership structure that has so many conflicting
interests its not funny... all of which had one objective, to create a frequent flyer base
and connections to feed their own long haul networks, you were asking for trouble.

Looks like Air NZ was right to dump them.


Borghetti was able to hang around for 10 years because he was able to get such a complex ownership structure, therefore when he was able to get enough board members to support him, then he will be able to keep his job.

Simple as that.
 
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RyanairGuru
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 10:33 am

melpax wrote:
SCFlyer wrote:
Tigerair will very likely be rebranded in that scenario. No way any potential buyer will want to keep paying Tesamek royalties for the Tigerair name.


Not to mention Tigerair's very low rent image.

This is tounge-in-cheek, but not far from the truth!

https://www.betootaadvocate.com/humans- ... er-flight/


Tiger's reputation is very undeserved. I've flown them several times and the passenger profile is a cross-section of middle class Australia, what the Prime Minister would call quiet Australians. It certainly isn't a plane full of mullets and rats tails and Charlene and Shapelle off to get sloshed on the Gold Coast. What's more, I really can't fault the airline (although I've never had a delay or cancellation). The crew strike the right balance between friendly and professional, and the aircraft are comfortable enough for a short flight.

Before someone states the obvious, I'm well aware that the Betoota Advocate is sitirical, and I do enjoy their hunour.
Worked Hard, Flew Right
 
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CraigAnderson
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 12:00 pm

What always got me was the way JB spun every financial report to make it look positive or at least sound positive. One year the focus was on highest-ever levels of cash on hand, another it was that the loss was so much less than last time so things were looking up, then it was record revenue YoY. Every time, the focus was on something different. He managed to run Virgin Australia at a loss, year after year after year, but still was spinning like his life depended on it, and I suppose his 'corporate' life did depend on it. Plus you look at the massive salary he was collecting, was it something like $4m?
 
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SCFlyer
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Re: Australian Aviation Thread - August 2019

Wed Aug 28, 2019 1:15 pm

Lufthansa wrote:
xiaotung wrote:

And how many people would change their choice of airline if VA removed Virgin from their brand name tomorrow? Probably no one! How is paying Richard Brandson royalities justified?



My guess? Long term marketing agreement. He only has a 10 percent stake in the company now and notice he doesn't bother come down
to Australia all the time anymore? It appears it's not worth his time/kind of pointless as long as the royalty cheques keep on flowing
in. He's already lost 3 virgin branded airlines before, it's business. The trouble for VA is, each one of their major shareholders will want
things largely focusing on them. That prevents something like one of them rebranding it as a franchise the way British Airways do in South
Africa with Comair. Too much time has gone buy now to bother buy the old Ansett brand and use that, not much value left in it now.

The only couple of things I an think of is:
1.Spin off tiger... left VA mainline fail. This would probably work, with the help of some investors. Unlikely to be popular with the shareholders
and probably only happen if VA files for bankruptcy.

2. One major airline buys out the others.

3. The entire assets are all sold off and a carrier like Alliance snaps some of them up cheap and starts a more regular
scheduled service. Although that sounds a bit out there, Alliance has made a hell of a lot more money in the last
decade than VA.

Either way I think they're in for rough times ahead. Etihad has shown with its other foreign investments it's no longer willing
to tolerate large losses, Singapore might be more so and perhaps their best hope but they won't want to see any of a return
to a low cost type of operation and close down lounges etc they pass their pax on or turn away business pax back to the
Qantas frequent flyer program, and the Chinese carriers haven't really been well exploited.


Etihad is also in debt themselves, so there's not much they can do. They have looked at selling out of VA at some point as well.

SQ has pretty much stated that they had enough, and taking into consideration their last 2 financial reports where they directly blamed VA for a profit downturn on their own group (which includes Silkair and Scoot), it's unlikely they'll step in, let alone buy any further stakes. SQ are only keeping their VA stake for "feed/ongoing concern" and are pretty much mostly hands-off.

Saying that I do agree there should really be a shareholder that should take the initiative by reducing the "cooks in the kitchen", and it isn't EY or "the so-called saviour" SQ.

Any potential "majority" shareholder in VA will most likely be an outsider (if at all). BUT until that happens, the VA stakeholder makeup will remain the status quo.

Meaning Scurrah is likely to be on his own for the restructure with no "income support" from the current shareholders.
 
xiaotung
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 12:11 am

SCFlyer wrote:

Any potential "majority" shareholder in VA will most likely be an outsider (if at all). BUT until that happens, the VA stakeholder makeup will remain the status quo.

Meaning Scurrah is likely to be on his own for the restructure with no "income support" from the current shareholders.


Why would anyone (insider or not) invest in an airline which has been in the red for 7 consecutive years with no clear turnaround plan in sight? I mean no plan at all after I saw the Sky News interview.

https://www.youtube.com/watch?v=KkeKTmdh7lE

Paul Scurrah seems to think their problem is an efficiency one and their business model has no problem. And he describes HKG as being in early days! Even the host is not convinced. If I were a potential investor, I would stay the hell away.
 
anstar
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 2:10 am

CityRail wrote:
CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


If it rebrands to Virgin Blue, does it still need to pay license to Virgin Group?


They paid to use the "Virgin" brand when they were Virgin Blue so you bet they will charge to use the Virgin name again if they change australia to blue... which they won't.

I wonder if we will see another airline start domestic operations whilst the Virgin Group are weak... similar to what Virgin did with Ansett?

Air Asia perhaps or Lion Air?
 
moa999
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 2:41 am

anstar wrote:
They paid to use the "Virgin" brand when they

I wonder if we will see another airline start domestic operations whilst the Virgin Group are weak... similar to what Virgin did with Ansett?


Im sure they'd have to pay to use any Virgin branding.. whether they can get out of the contract altogether and rebrand to something else is another matter.
From memory JB extended the original deal in 2015. Think that the AFR determined they had paid over $100m in brand fees, which was more than total profit over that time.

Much like SQ did with Tiger, anyone can setup a fully domestic airline under an Australian AOC and employing Aussie staff, but I think the higher costs would put most off.
 
IndianicWorld
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 2:46 am

Why do VA have management in Sydney when the HQ is in Brisbane?

Seems like something JB liked as he wanted to stay in Sydney, but seems to be an unnecessary way of doing business.

anstar wrote:
CityRail wrote:
CraigAnderson wrote:
What chance that Scurrah will decide to either axe Tigerair entirely and exit the pure LCC maket, or rebrand it as Virgin Blue in order to stop the brand licensing payments?


If it rebrands to Virgin Blue, does it still need to pay license to Virgin Group?


They paid to use the "Virgin" brand when they were Virgin Blue so you bet they will charge to use the Virgin name again if they change australia to blue... which they won't.

I wonder if we will see another airline start domestic operations whilst the Virgin Group are weak... similar to what Virgin did with Ansett?

Air Asia perhaps or Lion Air?


I don’t think any other airlines will run into this market anytime soon, even with an apparently unhealthy VA and TT struggling along.

Lion Air have talked up starting Australian domestic operations in the past but it hasn’t transpired, but Air Asia really haven’t made any moves that I know of.

Both have the aircraft on order and could well see merit in it, but the Australian operating environment is challenging (higher costs). Tiger Airways entry to Australia was likely seen as quite straight forward to those doing the business planning, but as we all know things haven’t played out that well.
 
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qf2220
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 5:16 am

eta unknown wrote:
A few posters above have commented that more codesharing etc. with VA and other carriers outside their ownership sphere should be done. FYI many have tried and been knocked back- on orders from SQ.


Interesting. Wonder if the ACCC might have a view on this....
 
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qf2220
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 5:29 am

RyanairGuru wrote:
Before someone states the obvious, I'm well aware that the Betoota Advocate is sitirical, and I do enjoy their hunour.


Sometimes their articles are actually more truthful than not, in their own way. Check out how they announced Pell's appeal failure.
 
getluv
Posts: 515
Joined: Thu Jun 11, 2015 12:11 pm

Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 6:12 am

qf2220 wrote:
eta unknown wrote:
A few posters above have commented that more codesharing etc. with VA and other carriers outside their ownership sphere should be done. FYI many have tried and been knocked back- on orders from SQ.


Interesting. Wonder if the ACCC might have a view on this....


Probably none. After all it was a management decision.
I'm that bad type.
 
cam747
Posts: 51
Joined: Thu Sep 15, 2011 12:25 pm

Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 7:35 am

The only thing more predictable than Virgin positing an annual loss, is the queue of the same a.net users who come out to stick the boot in, pedal wild conspiracy theories about JB’s boardroom antics, and yearn for the airline to change back to Virgin Blue.
 
cam747
Posts: 51
Joined: Thu Sep 15, 2011 12:25 pm

Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 7:38 am

TN486T wrote:
Hmmmm, just a thought. QF's investment in Alliance now seems a "master stroke", especially if VA disappears. LOL


If VA disappears, about 10,000 people will lose their jobs. Not sure that's "LOL" kind of outcome.
 
TN486T
Posts: 40
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Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 7:52 am

I agree, my comment was not meant in the way you have taken it.
 
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qf2220
Posts: 1685
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - August 2019

Thu Aug 29, 2019 8:04 am

getluv wrote:
qf2220 wrote:
eta unknown wrote:
A few posters above have commented that more codesharing etc. with VA and other carriers outside their ownership sphere should be done. FYI many have tried and been knocked back- on orders from SQ.


Interesting. Wonder if the ACCC might have a view on this....


Probably none. After all it was a management decision.


If SQ have used their position as a competitor to veto it, then it isn't really a management decision but potentially a competitor one.

IDK ill think about this some more. Ive been following some interesting competition issues in the rail sector and this one has piqued my interest in aviation.
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