There is less than zero prospect of anybody investing in a new operation for a very long time. Every airline worldwide is facing financial destruction, which includes blue-chip carriers. The established 'flag carrier' blue-chips will hoover up any available capital available to aviation.
None of VA's shareholders are in a position to invest.
I get the point about overseas ownership and debt. Unfortunately, in a globalised economy, the domestic operations of oversea's interests can still be of strategic national importance. From a Federal Government perspective, a second airline is needed, because of Australia's inherent reliance on aviation. It's not like Ansett where others are waiting in the wings. So the Federal Government will need to do something, it doesn't mean they will, of course.
My guess is they'd be best placed to let VA go into administration and back an asset purchase (for probably a nominal value). That way the strategically important operations can continue, but Federal Funds aren't used to pay off overseas debt or part bailout Etihad, Singaporian, Chinese and (whatever dodgy arrangements SRB has or hasn't got) interests.
AJ and the QF press office can lobby what they like, but a monopoly isn't acceptable.
Once the pandemic is over, I suspect there will be a lot of opportunity for the stronger airlines to invest in new segments of the market. Just remember, there is a reason why businesses like to give their investors money.
My preference would be for VA's airport terminal leases to go back to the airports who in turn adopt a multi-user model. This would allow "start-ups" access to adequate airport facilities, which has always been a significant barrier for budding new entrants in the past.
To out this into perspective, a small airline like Jetstar Asia (that owns the majority of its aircraft and has relatively low debt levels when compared to its piers) could have significant opportunity to expand simply on the basis it's competitors are debt laden and incapable of responding to new competition. If we consider lessors will be looking to let aircraft at a significant discount and airports may be willing to waive fees for the sake of stimulating the market, there will be plenty of leavers that the stronger more agile airlines can pull.
When this is all over, there could be 10-20% less airlines in the world. As such, a market that is 6-8% smaller will have 15-25% more opportunity than it did prior to the crisis.
One thing is for sure, business is still going to be business. That will never change!
Without government bailouts, not a single airline in the world can survive 6 months of this. Not one.
Government bailouts come with strings, I know, I am personally working on one (not in Australia). I've literally just had to submit modelling to justify new ground procedures if a bus is used, to help maintain a 2m gap between passengers. I've also just submitted a paper to government regarding terminal staffing levels, which they have to agree to. That's because the bailout has conditions that mean zero cost increases and (to my point) no capital spend without prior government agreement.
I'm sorry, but really, there will be no international investments for a very long time. The kind of bailouts we are seeing don't allow for it.
If there is an opportunity for corporate welfare, most businesses will put their hand up!
If we go back to the 1997 Asian financial crisis, the oversupply of new residential units resulted in an overvaluation of the property market.
The market adjusted by lowering the price of the property, which in turn opened up property ownership to a greater amount of people.
On the back side of the crisis, the people who brought these units became part of the emerging Asian middle class; which have been the backbone of Asian domestic economic growth over the last 10 years.
In essence the crisis transferred wealth from investment banks to individuals. Ultimately, in the end everyone was a winner (investors have been riding a investment honeymoon for ten years)!
In my opinion, if the government wants to back a winner, it should be backing the Australian people. Ultimately, they will be the ones that underpin the nations economy. The corporate community and the backers that sit behind them will always have enough money to pick their winning investment horses when the dust settles.
For me the worry about Virgin Australia folding revolves around the people. The investors will still have their Ferraris.