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Captdasbomb
Posts: 172
Joined: Sun Feb 03, 2019 2:08 am

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 11:26 am

LHR2BNE wrote:
qf789 wrote:
ZNE is operating QF9 MEL-PER-LHR

https://www.flightradar24.com/QFA9/2459ad00


Heard from a friend that QF9 on 12/4 was cancelled at late notice for passengers and operated with freight only, supposedly due to a change in quarantine restrictions for crew. Anyone know any more details, and if it might cause problems for the scheduled QF9/QF10 flights between now and 6th May?


Would have thought crew restrictions would have also affected pilots
 
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SCFlyer
Posts: 577
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 11:35 am

https://www.executivetraveller.com/news ... -goes-bust

Well here's SIA's chance. Supposedly getting access to VA's FF base was one of the many primary reasons why SIA acquired a stake in VA in the first place.

Acquiring Velocity at Liquidation can ensure the VA FF customer base can be "absorbed" into KrisFlyer if VAH files administration.
 
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eta unknown
Posts: 2803
Joined: Wed Jun 13, 2001 5:03 am

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 12:07 pm

I'd imagine SQ already knows who these Velocity pax are and how many of them with serious balances already converted to the SQ plan. The magic word in the above article is "could". Well, anything could happen.
Fun fact: I just swapped my wife's orphaned Velocity points for a Priceline gift card- I lack faith lol
 
dredgy
Posts: 488
Joined: Fri Jun 16, 2017 5:13 am

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 12:15 pm

SCFlyer wrote:
https://www.executivetraveller.com/news/what-happens-to-your-frequent-flyer-points-if-an-airline-goes-bust

Well here's SIA's chance. Supposedly getting access to VA's FF base was one of the many primary reasons why SIA acquired a stake in VA in the first place.

Acquiring Velocity at Liquidation can ensure the VA FF customer base can be "absorbed" into KrisFlyer if VAH files administration.


As someone with several million velocity points (and QF points) I'd be fine with that.
I can't see Singapore taking it over, but I assume it will be sold off and Singapore will be one of the partner airlines at least. I'm not too worried.
 
travelhound
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 12:20 pm

SYDSpotter wrote:
travelhound wrote:
VA recently spent $700 million to take full ownership of their Velocity Rewards customer loyalty program. In essence they reduced their liquidity, when they had low equity and an inability to raise new debt.

The $700 million outlay essentially changed the risk and debt profile of the business.

There are some management rules 101 that weren’t followed here.


Sorry but no business plans for a scenario where 100% of their revenue gets wiped out in one go.

So to claim that "management rules 101" weren't followed is curious unless you were in those board meetings when those decisions were made...

Note it is widely suggested in the media that the acquisition was 100% debt funded. Assuming a 3% interest rate, that equates to a $21m interest bill per year. So that in itself hasn't really impacted VA's short term liquidity position.


You can't look at this transaction in isolation.

Prior to the purchase of the remaining share of the Velocity business VA had significant structural issues with high debt and low equity (PE ratio) being high on the list of the items needing "fixing".

Using debt (100%) to purchase the remaining share of the Velocity business only compounded these significant problems.

From a risk perspective, VA's purchase of the business should have included "what if" scenarios, with one of the "what if's" being a significant event that reduced cash flows.

If we use QANTAS as a baseline, prior to the seriousness of the Coronavirus became fully evident they were actively in the market raising cash (by financing eleven if their 787's). VA wasn't. In doing so QANTAS almost immediately mitigated the full risk (low/high scenarios) of the pandemic event.

From where I sit, I can only suggest VA weren't in the market because 1) they had limited financing options to raise cash; or 2) they had incompetent business managers. Realistically, I'd suggest VA's books were such that they simply had no financing options available to them. The only option they had was to sit this crisis out.

A functioning board with proper oversight of the business would not have allowed this type of situation to occur. That it did occur suggests the board was not functioning or the major shareholders had simply had enough.

For me the Velocity transaction and the "multiples" (purchase price divided by expected profits) paid for it suggests a degree of desperation. VA obviously had a willing seller!

To put this into perspective, an aircraft (737) will typically generate gross profits in the region of 15-20% pa. As such, an aircraft will typically generate enough incomes to pay for itself over a seven year period.

Again, using QANTAS as a baseline, they were buying out aircraft leases, paying cash for new aircraft, negotiating revised lease terms for existing aircraft so that they ended up with 60% unincumbered ownership of their aircraft assets. In part, they achieved this during times when they were incurring losses and/or restructuring the business. It was a priority for them. Interestingly, there were times when they mooted the idea of selling part of their rewards program to fund these structural changes.

We have never seen this type of commitment from VA. Considering both of these businesses were equally loss makers in the 2012-2014 period, you would have thought that both of these airlines would have put measures in place to ensure they were sustainable.

Ultimately, one has and one hasn't and the one that hasn't is the one now asking for a government loan.

As such, the management and shareholders ultimately have to take responsibility for VA's woes. They should have always known better!
 
timtam
Posts: 300
Joined: Tue Nov 19, 2013 2:02 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 1:30 pm

Just to put VA' s request in perspective, the Federal Government declined to provide a subsidy of $300m per year to save 5000 direct and 45000 indirect jobs in the car manufacturing industry. All 3 car manufacturers closed up.

VA cannot expect the Federal Government to save them. VA needs to save itself first and get some extra help from the Federal Government.

As mentioned by others already, one of the biggest problem is the borders might not reopen until sometime in 2021. Thats a long time to be losing money and it makes a mess of any Net Present Value calculations being used to support a restructure deal.
 
ArtV
Posts: 144
Joined: Sun Jul 03, 2016 2:29 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 2:07 pm

travelhound wrote:
SYDSpotter wrote:
travelhound wrote:
VA recently spent $700 million to take full ownership of their Velocity Rewards customer loyalty program. In essence they reduced their liquidity, when they had low equity and an inability to raise new debt.

The $700 million outlay essentially changed the risk and debt profile of the business.

There are some management rules 101 that weren’t followed here.


Sorry but no business plans for a scenario where 100% of their revenue gets wiped out in one go.

So to claim that "management rules 101" weren't followed is curious unless you were in those board meetings when those decisions were made...

Note it is widely suggested in the media that the acquisition was 100% debt funded. Assuming a 3% interest rate, that equates to a $21m interest bill per year. So that in itself hasn't really impacted VA's short term liquidity position.


You can't look at this transaction in isolation.

Prior to the purchase of the remaining share of the Velocity business VA had significant structural issues with high debt and low equity (PE ratio) being high on the list of the items needing "fixing".

Using debt (100%) to purchase the remaining share of the Velocity business only compounded these significant problems.

From a risk perspective, VA's purchase of the business should have included "what if" scenarios, with one of the "what if's" being a significant event that reduced cash flows.

If we use QANTAS as a baseline, prior to the seriousness of the Coronavirus became fully evident they were actively in the market raising cash (by financing eleven if their 787's). VA wasn't. In doing so QANTAS almost immediately mitigated the full risk (low/high scenarios) of the pandemic event.

From where I sit, I can only suggest VA weren't in the market because 1) they had limited financing options to raise cash; or 2) they had incompetent business managers. Realistically, I'd suggest VA's books were such that they simply had no financing options available to them. The only option they had was to sit this crisis out.

A functioning board with proper oversight of the business would not have allowed this type of situation to occur. That it did occur suggests the board was not functioning or the major shareholders had simply had enough.

For me the Velocity transaction and the "multiples" (purchase price divided by expected profits) paid for it suggests a degree of desperation. VA obviously had a willing seller!

To put this into perspective, an aircraft (737) will typically generate gross profits in the region of 15-20% pa. As such, an aircraft will typically generate enough incomes to pay for itself over a seven year period.

Again, using QANTAS as a baseline, they were buying out aircraft leases, paying cash for new aircraft, negotiating revised lease terms for existing aircraft so that they ended up with 60% unincumbered ownership of their aircraft assets. In part, they achieved this during times when they were incurring losses and/or restructuring the business. It was a priority for them. Interestingly, there were times when they mooted the idea of selling part of their rewards program to fund these structural changes.

We have never seen this type of commitment from VA. Considering both of these businesses were equally loss makers in the 2012-2014 period, you would have thought that both of these airlines would have put measures in place to ensure they were sustainable.

Ultimately, one has and one hasn't and the one that hasn't is the one now asking for a government loan.

As such, the management and shareholders ultimately have to take responsibility for VA's woes. They should have always known better!


I think this is over simplistic and just not a realistic analysis of the current climate. As a business owner (and founder) with operations in three cities and corporate (minority) investors that I am accountable )as well as sitting on the board of other organisations) - the scenario of "complete wipout of revenue" is simply not something that is corporately envisagned....the idea of carrying sufficient cash reserves or resources to cover a year of zero revenue and then being able to simply operate as per normal is financially irresponsible in every scenario (other than covid-19).

QF may be fortunate here (I don't think they were planning for a covid-19 situation, but the point in their fleet planning cycle gave them an operational opportunity for treasury optimisation), but the bigger picture of an unforseable and unplannable event that has arisen globally needs to be taken in the context it is. >50% of businesses will likely fail before the end of the year if things continue...without government support measures. VA is just one of many here...not asying they have been financially prudent in any way, but covid-19 was not foresable in anyone's planning.
 
timtam
Posts: 300
Joined: Tue Nov 19, 2013 2:02 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 2:31 pm

There is a good example of the VA restructuring experts using their media contacts to apply pressure in the AFR.

"Clock is ticking on Virgin's survival

The government should be careful not to let ideology get in the way of helping to keep two viable full-service carriers operating in Australia."

https://www.afr.com/chanticleer/clock-i ... 415-p54k43

Article is a blatant attempt to apply pressure on the Federal Government.

Have to wonder about their maths in the comment below.....thats about $8bn in interest free loans to come up with that savings number...when they say VA is now asking for a$1bn loan (didnt get $1.4bn so lets float a lesser figure in the media to see if they bite).

"The federal government rescue is critical to Virgin's survival because it means the company can save about $600 million a year in interest."

But then they contradict the $600m saving in interest by saying:
"Virgin is not asking for government grants or gifts. It will pay back any loan and it is willing to pay commercial terms for the money".

Maybe it just shows that the reporter has not calculated the numbers and has misunderstood the numbers given to them by the restructuring experts over the phone.
 
travelhound
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 3:25 pm

ArtV wrote:
travelhound wrote:
SYDSpotter wrote:

Sorry but no business plans for a scenario where 100% of their revenue gets wiped out in one go.

So to claim that "management rules 101" weren't followed is curious unless you were in those board meetings when those decisions were made...

Note it is widely suggested in the media that the acquisition was 100% debt funded. Assuming a 3% interest rate, that equates to a $21m interest bill per year. So that in itself hasn't really impacted VA's short term liquidity position.


You can't look at this transaction in isolation.

Prior to the purchase of the remaining share of the Velocity business VA had significant structural issues with high debt and low equity (PE ratio) being high on the list of the items needing "fixing".

Using debt (100%) to purchase the remaining share of the Velocity business only compounded these significant problems.

From a risk perspective, VA's purchase of the business should have included "what if" scenarios, with one of the "what if's" being a significant event that reduced cash flows.

If we use QANTAS as a baseline, prior to the seriousness of the Coronavirus became fully evident they were actively in the market raising cash (by financing eleven if their 787's). VA wasn't. In doing so QANTAS almost immediately mitigated the full risk (low/high scenarios) of the pandemic event.

From where I sit, I can only suggest VA weren't in the market because 1) they had limited financing options to raise cash; or 2) they had incompetent business managers. Realistically, I'd suggest VA's books were such that they simply had no financing options available to them. The only option they had was to sit this crisis out.

A functioning board with proper oversight of the business would not have allowed this type of situation to occur. That it did occur suggests the board was not functioning or the major shareholders had simply had enough.

For me the Velocity transaction and the "multiples" (purchase price divided by expected profits) paid for it suggests a degree of desperation. VA obviously had a willing seller!

To put this into perspective, an aircraft (737) will typically generate gross profits in the region of 15-20% pa. As such, an aircraft will typically generate enough incomes to pay for itself over a seven year period.

Again, using QANTAS as a baseline, they were buying out aircraft leases, paying cash for new aircraft, negotiating revised lease terms for existing aircraft so that they ended up with 60% unincumbered ownership of their aircraft assets. In part, they achieved this during times when they were incurring losses and/or restructuring the business. It was a priority for them. Interestingly, there were times when they mooted the idea of selling part of their rewards program to fund these structural changes.

We have never seen this type of commitment from VA. Considering both of these businesses were equally loss makers in the 2012-2014 period, you would have thought that both of these airlines would have put measures in place to ensure they were sustainable.

Ultimately, one has and one hasn't and the one that hasn't is the one now asking for a government loan.

As such, the management and shareholders ultimately have to take responsibility for VA's woes. They should have always known better!


I think this is over simplistic and just not a realistic analysis of the current climate. As a business owner (and founder) with operations in three cities and corporate (minority) investors that I am accountable )as well as sitting on the board of other organisations) - the scenario of "complete wipout of revenue" is simply not something that is corporately envisagned....the idea of carrying sufficient cash reserves or resources to cover a year of zero revenue and then being able to simply operate as per normal is financially irresponsible in every scenario (other than covid-19).

QF may be fortunate here (I don't think they were planning for a covid-19 situation, but the point in their fleet planning cycle gave them an operational opportunity for treasury optimisation), but the bigger picture of an unforseable and unplannable event that has arisen globally needs to be taken in the context it is. >50% of businesses will likely fail before the end of the year if things continue...without government support measures. VA is just one of many here...not asying they have been financially prudent in any way, but covid-19 was not foresable in anyone's planning.


Not arguing with the fact covid-19 was an unforeseen event. I am arguing that the long-term mismanagement of VA resulted in a situation where VA were unable to respond to covid-19 in any reasonable manner whatsoever.

With regards to QANTAS's fleet planning and aircraft ownership strategy, I disagree that QANTAS was lucky that the fleet planning cycle allowed them an operational opportunity to use their liquidity in their aircraft to raise cash. QANTAS has been CAPEX light for many years now. If we look at their announced order book (Jetstar A321's, QF 787's) all of these aircraft were planned (from assessing company announcements / financials) to be purchased using free cash flows. With QANTAS this is quite easy to work out as their aircraft are normally delivered in blocks revolving around the end and start of a financial year.

I am not arguing against government support measures. I am arguing against a specific bailout of VA, when it is highly probable this business will find it very difficult to survive covid-19, even if it receives government financial support.

From where I sit the owners of VA are the ones responsible. If we consider SIA and Etihad are both owned by sovereign wealth funds (don't know enough about the other shareholders to comment) their oversight of the business should have ensured a situation different to what they have now or if not adequate mechanisms that allowed VA's risk to be managed on a portfolio basis through the fund managers. Unfortunately, the VA share ownership registry was probably filled by too many relatively large competing owners for this to happen.

As such, I am arguing strongly, that VA's current financial woes are primarily self induced. In short a business of this size and importance to the Australian economy should have never been allowed to mismanage it's affairs to the extent it did.

When we look back on these events, I believe a reasonable conclusion will revolve around the suitability of some of the VA shareholders, not the severity of the covid-19 crisis.
 
QF64
Posts: 5
Joined: Sun Jun 19, 2016 9:25 am

Re: Australian Aviation Thread - April 2020

Wed Apr 15, 2020 4:51 pm

grjplanes wrote:
Any idea when the Qantas repatriation flight to JNB will be? Is it confirmed to be with 787-9?


In a letter this week to Australian citizens from the High Commission in Pretoria, it was indicated it will indeed be a B787-9 aircraft, although with a lowered capacity to take into account distancing requirements for passengers and crew. Date and destination in Australia still to be confirmed, and will be ex JNB only, with anyone in CPT, DUR or elsewhere needing to make their own way to meet the flight, with official assistance from the High Commission if the lockdown is still in place.
 
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Chipmunk1973
Posts: 256
Joined: Tue Jun 28, 2016 10:23 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 12:39 am

VA has requested another trading halt from the ASX. This time for 7 days.
Cheers,
C1973
 
Boof
Posts: 173
Joined: Wed Apr 16, 2008 12:16 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 1:08 am

Captdasbomb wrote:
LHR2BNE wrote:
qf789 wrote:
ZNE is operating QF9 MEL-PER-LHR

https://www.flightradar24.com/QFA9/2459ad00


Heard from a friend that QF9 on 12/4 was cancelled at late notice for passengers and operated with freight only, supposedly due to a change in quarantine restrictions for crew. Anyone know any more details, and if it might cause problems for the scheduled QF9/QF10 flights between now and 6th May?


Would have thought crew restrictions would have also affected pilots


Aren’t QF9/10 operated by LHR based cabin crew? Might be a hiccup with being UK based perhaps.
Bring back Virgin Blue!
 
BAeRJ100
Posts: 438
Joined: Sun Nov 20, 2011 9:49 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 1:52 am

Boof wrote:
Captdasbomb wrote:
LHR2BNE wrote:

Heard from a friend that QF9 on 12/4 was cancelled at late notice for passengers and operated with freight only, supposedly due to a change in quarantine restrictions for crew. Anyone know any more details, and if it might cause problems for the scheduled QF9/QF10 flights between now and 6th May?


Would have thought crew restrictions would have also affected pilots


Aren’t QF9/10 operated by LHR based cabin crew? Might be a hiccup with being UK based perhaps.


I recall reading that for now they were utilising MEL-based crew for QF9/10.
B737/738/739/744ER/752/753/763/77L/77W/788/789
A223/320/321/332/333/346/359/388
MD82/MD88/717/F100/RJ85/RJ100/146-100/200/300
E175/190/CRJ700/900
 
LHR2BNE
Posts: 3
Joined: Wed Apr 15, 2020 7:37 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:00 am

BAeRJ100 wrote:
Boof wrote:
Captdasbomb wrote:

Would have thought crew restrictions would have also affected pilots


Aren’t QF9/10 operated by LHR based cabin crew? Might be a hiccup with being UK based perhaps.


I recall reading that for now they were utilising MEL-based crew for QF9/10.


I believe when the route initially launched, UK crew operated the LHR-PER portion with MEL based crew operating the PER-MEL leg, with minor exceptions now and then. It may have changed since however.
 
waoz1
Posts: 580
Joined: Fri Oct 28, 2016 7:31 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:11 am

eta unknown wrote:
I'd imagine SQ already knows who these Velocity pax are and how many of them with serious balances already converted to the SQ plan. The magic word in the above article is "could". Well, anything could happen.
Fun fact: I just swapped my wife's orphaned Velocity points for a Priceline gift card- I lack faith lol


Im thinking the same I got nearly 400,000 do I burn them on a new toaster or something lol
 
QF945
Posts: 6
Joined: Mon Mar 23, 2020 4:58 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:24 am

Virgin Australia mulls interstate move to help save company

https://www.afr.com/street-talk/virgin- ... 416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.


Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.
 
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qf2220
Posts: 1947
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:27 am

Is Victoria looking to provide a subsidy for this HQ move or something? Or are they posturing for a Qld government bailout instead?

Really to me tho this smells of desperation more than anything...
 
IndianicWorld
Posts: 3346
Joined: Mon Jun 04, 2001 11:32 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:48 am

qf2220 wrote:
Is Victoria looking to provide a subsidy for this HQ move or something? Or are they posturing for a Qld government bailout instead?

Really to me tho this smells of desperation more than anything...


Certainly very strange logic I agree.

I can’t see the govts being in a position to try and negotiate such deals to move HQ’s right now, but all I can think of is that they are looking at using Tigerair in some sense of their future structure. Tigerair is based at MEL, but I agree this whole story seems very strange at a time they are struggling to survive.

No viable amount of subsidising is likely to help VA in its current form over come its debt pile, so there must be some significant structural changes being considered to think a HQ move would help.
Last edited by IndianicWorld on Thu Apr 16, 2020 2:53 am, edited 1 time in total.
 
brucetiki
Posts: 225
Joined: Fri Sep 01, 2017 4:36 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:52 am

eta unknown wrote:
I'd imagine SQ already knows who these Velocity pax are and how many of them with serious balances already converted to the SQ plan. The magic word in the above article is "could". Well, anything could happen.
Fun fact: I just swapped my wife's orphaned Velocity points for a Priceline gift card- I lack faith lol


Looks like you got lucky - the online store has now crashed
The early bird catches the worm, the late bird will be featured on a You Tube video
 
A350OZ
Posts: 167
Joined: Thu Nov 30, 2017 9:20 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:52 am

QF945 wrote:
Virgin Australia mulls interstate move to help save company

https://www.afr.com/street-talk/virgin- ... 416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.


Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


It's either an attempt to pressure the Queensland Government for subsidies to stay, or Victoria is putting money on the table to attract them (probably unlikely right now given how politicised such a move would be). On balance, I cannot see how overall a relocation would assist with their finances, even if largely supported by a state government. The overall cost of such a move plus additional disruption to the business would be enormous. It would be madness.
 
redroo
Posts: 575
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 3:23 am

QF945 wrote:
Virgin Australia mulls interstate move to help save company

https://www.afr.com/street-talk/virgin- ... 416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.


Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


Now trying to get cash from the state governments.

Shareholders said no.
Federal government saying no.
Market saying no chance.
Bondholders probably saying no.

They are running out of options.
 
IndianicWorld
Posts: 3346
Joined: Mon Jun 04, 2001 11:32 am

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 3:29 am

redroo wrote:
QF945 wrote:
Virgin Australia mulls interstate move to help save company

https://www.afr.com/street-talk/virgin- ... 416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.


Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


Now trying to get cash from the state governments.

Shareholders said no.
Federal government saying no.
Market saying no chance.
Bondholders probably saying no.

They are running out of options.


Having read the story it seems more like a move to please certain investors, but unsure how that would sway someone to invest.

Yes, Melbourne has a far larger investor market than Brisbane, but I always had the feeling that VA’s admin structure was confusing anyway as there are elements run from Sydney and some from Brisbane from what I can tell.

It would be interesting if they did survive and moved HQ to Melbourne, as it was a choice between Brisbane and Melbourne when they initially set up as DJ.
 
zkncj
Posts: 3812
Joined: Wed Nov 09, 2005 4:57 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 3:30 am

QF945 wrote:
Virgin Australia mulls interstate move to help save company

https://www.afr.com/street-talk/virgin- ... 416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.


Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


I guess it would help them with laying off the 1500 HO jobs in Brisbane? hard seems like something that would save them much money.

Would of through they would of had more chance moving HQ to Auckland, and asking Auntie Jacinta for an loan (they might have an better chance)
 
timtam
Posts: 300
Joined: Tue Nov 19, 2013 2:02 pm

Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:06 am

Threatening to move the HQ is a common move - but the restructuring experts are tight on time so instead of doing it behind closed doors as would normally happen, they are using the media to pressure a faster response. They are seeking a hand out from the State Government. They are pulling every lever they can find to improve the bottom line. Every gain they can make helps with the numbers.
 
anstar
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:07 am

QF945 wrote:

Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


Well they already have an airline with an AOC and head office in Melbourne it's called Tiger. In reality what would most likely happen is they shut down Virgin Australia and it's offices, AOC and somehow get rid of that debt.

What is left is the Tiger AOC and office in MEL which would get rebranded into the new entity at a lower cost. So not so much of a relocation rather a reorganisation that shuts down the larger loss making parts of the business. Would mean they are a small airline, but one that is right sized for the market with a chance to survive and start a fresh.
 
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SCFlyer
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:15 am

Also to add the TT AOC has both the 737 and A320s on their AOC.

VAH (or its successor) can pick one of those two aircraft to form the "VA Mk II" successor identity in a post-administration scenario, and that's IF administrators are able to identify if there's a viable airline to re-emerge from a VA voluntary administration.

Going by VAH's assets, IMO, it's probably cheaper to grab the owned VA 737s to form the "VA Mk II" successor if it's deemed viable by administrators. Seems easier to return A320s (all leased) ASAP the moment VAH files administration.
 
travelhound
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:20 am

anstar wrote:
QF945 wrote:

Not sure how moving a HQ would be of benefit in times like these - especially with the cost of either relocating or making redundant the Brisbane workforce. It would also put a few Queensland based frequent flyers out of joint I imagine.


Well they already have an airline with an AOC and head office in Melbourne it's called Tiger. In reality what would most likely happen is they shut down Virgin Australia and it's offices, AOC and somehow get rid of that debt.

What is left is the Tiger AOC and office in MEL which would get rebranded into the new entity at a lower cost. So not so much of a relocation rather a reorganisation that shuts down the larger loss making parts of the business. Would mean they are a small airline, but one that is right sized for the market with a chance to survive and start a fresh.


This is the only scenario where I think such a move would works. if this is correct, in essence VA are accepting the parent holding company will be liquidated and the affiliated parts used to resurrect a VAm2.

Not a bad idea, but.....they are going to need some fairly good investors willing to take on a lot of risk.

Maybe a VAm2 using Skywest in WA, TigerAir in Melbourne and Alliance in Qld could work.
 
BNEFlyer
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:25 am

There is no way VA are moving their HQ to MEL. Not only the monetary cost to move, but also the loss of jobs would be huge. Also the story says "It is understood" twice and there's a "reckons" in there. The whole thing is a baseless rumour to just add to all the others about VA at the moment.
 
tullamarine
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 4:40 am

BNEFlyer wrote:
There is no way VA are moving their HQ to MEL. Not only the monetary cost to move, but also the loss of jobs would be huge. Also the story says "It is understood" twice and there's a "reckons" in there. The whole thing is a baseless rumour to just add to all the others about VA at the moment.

The only reason Virgin HO was in BNE was a payroll tax deal from the then QLD government. If the Vic government are silly enough to engage in these games (and it has in the past hence the Jetstar office and 787 base in MEL) then VA management may be tempted. I doubt they'd move at the moment however; not becuase there is anything particularly compelling about being based in BNE but that it would be a distraction and there are plenty of more important things to address before worrying about what will be a much smaller admin office going forward.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 788/9, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E75/90, CR2, D82/3/4, SF3, ATR
 
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eta unknown
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 6:30 am

BNEFlyer wrote:
There is no way VA are moving their HQ to MEL. Not only the monetary cost to move, but also the loss of jobs would be huge. Also the story says "It is understood" twice and there's a "reckons" in there. The whole thing is a baseless rumour to just add to all the others about VA at the moment.

Now all we need is CAPA to come out with one of their shameful "should" articles: VA should move their HQ to MEL to facilitate confidence blah blah blah...
 
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SCFlyer
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 6:34 am

I also don't think the Vic (or Qld) governments for that matter are going to get themselves into a pointless bidding match over the HQ either.

If that 'rumour' was true, I'd suspect it'll probably have to more to do with Qld Government 'assistance', rather than any of the state governments taking a stake in VA.
 
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eta unknown
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 6:36 am

travel748 wrote:
waoz1 wrote:
Federal Government have organised freight flights over an 8 week period between Perth and China.

To help Export 500 tonnes of Rock Lobster.. a lot of Lobsters


They should use B-52's.

Thank you for putting a smile on my face with my morning coffee!
 
qf2048
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 7:06 am

If VA go the way of the Dodo maybe Scoot we be an option for as second carrier, with SQ FF program attached.
Just my 0.02c worth..
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zkncj
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 7:13 am

SCFlyer wrote:
Also to add the TT AOC has both the 737 and A320s on their AOC.

VAH (or its successor) can pick one of those two aircraft to form the "VA Mk II" successor identity in a post-administration scenario, and that's IF administrators are able to identify if there's a viable airline to re-emerge from a VA voluntary administration.

Going by VAH's assets, IMO, it's probably cheaper to grab the owned VA 737s to form the "VA Mk II" successor if it's deemed viable by administrators. Seems easier to return A320s (all leased) ASAP the moment VAH files administration.


The lease aircraft might essayer / cheaper to you get you hands onto for starting an VA MK II, bear in mind that most of VA owned fleet will be all owed in security for debt they are currently carrying.

Funny to think the TT AOC is now probably the most valuable part of VA, and maybe Velocity.

What an mess with AOC's VA is though when you think about it, no wonder they are mess.

VA International
- 77W
- A332
- 738

VA
- 738/7
- ATR 72-600

TT
- A320
- 738

VARA
- F100
- A320

At least they have removed from the fleet already the ATR 72-500, F50, E170/190
 
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:13 am

zkncj wrote:
Funny to think the TT AOC is now probably the most valuable part of VA, and maybe Velocity.


Or the VARA AOC.
 
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SCFlyer
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:15 am

qf2220 wrote:
zkncj wrote:
Funny to think the TT AOC is now probably the most valuable part of VA, and maybe Velocity.


Or the VARA AOC.


TT would be slightly more valuable with both the 737 and A320 on that AOC.

VARA only has the Fokkers and A320. Suspect VARA may be valuable to be spun off on its own (again), just like they were when AN collapsed.
Last edited by SCFlyer on Thu Apr 16, 2020 8:16 am, edited 1 time in total.
 
QF945
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:16 am

With VA holding things up - when do we reckon the government will make an announcement regarding this so called minimum domestic network? There are still people with the need for essential travel caught with no viable options until this happens.
 
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qf2220
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:35 am

SCFlyer wrote:
qf2220 wrote:
zkncj wrote:
Funny to think the TT AOC is now probably the most valuable part of VA, and maybe Velocity.


Or the VARA AOC.


TT would be slightly more valuable with both the 737 and A320 on that AOC.

VARA only has the Fokkers and A320. Suspect VARA may be valuable to be spun off on its own (again), just like they were when AN collapsed.


Are brands connected to AOCs though as id say the Virgin name attached to VARA might be better than the Tiger name.
 
QF945
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:58 am

Virgin's just announced their minimal network

https://travel.virginaustralia.com/au/m ... e|HTGYH|na

Minimal flights from Perth to other capital cities. Only Melbourne included.
 
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RyanairGuru
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 9:43 am

qf2220 wrote:
SCFlyer wrote:
qf2220 wrote:

Or the VARA AOC.


TT would be slightly more valuable with both the 737 and A320 on that AOC.

VARA only has the Fokkers and A320. Suspect VARA may be valuable to be spun off on its own (again), just like they were when AN collapsed.


Are brands connected to AOCs though as id say the Virgin name attached to VARA might be better than the Tiger name.


No, changing the company name isn't very complicated at all.

Obviously this is in the US, so a different regulator, but for some reason United's AOC is actually pre-merger Continental's. Pre-merger United's AOC was surrendered.
Worked Hard, Flew Right
 
dredgy
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 9:53 am

QF945 wrote:
Virgin's just announced their minimal network

https://travel.virginaustralia.com/au/m ... e|HTGYH|na

Minimal flights from Perth to other capital cities. Only Melbourne included.


Good to have Rocky to Brisbane back, I was meant to fly back to Brisbane on Sunday but stuck up here!
 
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 10:16 am

qf2220 wrote:
eta unknown wrote:
Alliance and Nauru Airlines. The fact they may choose not to is a statement of the prevailing market conditions.


Also possibly a statement on their financial abilities in the current environment.


And the fact both are set up to operate a particular niche.
 
Qantas16
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 10:50 am

dredgy wrote:
qf2220 wrote:
eta unknown wrote:
Alliance and Nauru Airlines. The fact they may choose not to is a statement of the prevailing market conditions.


Also possibly a statement on their financial abilities in the current environment.


And the fact both are set up to operate a particular niche.


Very particular niches in Nauru Airlines case... neither airline has the knowledge, skills, fleet etc in place to launch a fully-fledged domestic airline. Though would be interesting to see passengers being able to fly a Nauru Airlines 737-300 between MEL and SYD!
 
FL420FT
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 10:56 am

Just Announced ...

Australian Federal Government to back both VA and QF for some domestic flights

https://www.abc.net.au/news/2020-04-16/ ... 0SzYm88j8I
 
FL420FT
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 11:19 am

QF64 wrote:
grjplanes wrote:
Any idea when the Qantas repatriation flight to JNB will be? Is it confirmed to be with 787-9?


In a letter this week to Australian citizens from the High Commission in Pretoria, it was indicated it will indeed be a B787-9 aircraft, although with a lowered capacity to take into account distancing requirements for passengers and crew. Date and destination in Australia still to be confirmed, and will be ex JNB only, with anyone in CPT, DUR or elsewhere needing to make their own way to meet the flight, with official assistance from the High Commission if the lockdown is still in place.


Next week (potentially 23 or 24 April) there will be a QF repatriation flight to / from EZE
 
dredgy
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 11:29 am

Qantas16 wrote:
dredgy wrote:
qf2220 wrote:

Also possibly a statement on their financial abilities in the current environment.


And the fact both are set up to operate a particular niche.


Very particular niches in Nauru Airlines case... neither airline has the knowledge, skills, fleet etc in place to launch a fully-fledged domestic airline. Though would be interesting to see passengers being able to fly a Nauru Airlines 737-300 between MEL and SYD!


I'd be down for that!
But yes, I don't think either of those airlines would be the existing carriers to capitalize on a Virginless market - Air New Zealand and Rex are much better situated to do that (not saying they would, just more realistic than Nauru and Alliance).
 
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JBusworth
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 12:04 pm

164 return flights with the QF group and 64 return flights with the VA group each week. 228 return flights is much better than what we've been seeing!
 
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eta unknown
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 12:48 pm

dredgy wrote:
Qantas16 wrote:
dredgy wrote:

And the fact both are set up to operate a particular niche.


Very particular niches in Nauru Airlines case... neither airline has the knowledge, skills, fleet etc in place to launch a fully-fledged domestic airline. Though would be interesting to see passengers being able to fly a Nauru Airlines 737-300 between MEL and SYD!


I'd be down for that!
But yes, I don't think either of those airlines would be the existing carriers to capitalize on a Virginless market - Air New Zealand and Rex are much better situated to do that (not saying they would, just more realistic than Nauru and Alliance).

Agree and all very true, but if you add Air North into the mix, you do have 3 Australian AOC's with jets... would it be cheaper to buy out one of those carriers than to pump money into VA?
 
QF945
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 2:01 pm

JBusworth wrote:
164 return flights with the QF group and 64 return flights with the VA group each week. 228 return flights is much better than what we've been seeing!


Totally agree - it has a sense of normality to it.

The only surprising gap I see is neither have picked up PER/BNE direct. You can obviously transit via Sydney or Melbourne but I would have thought there would have been a bit of traffic going both ways to the WA/QLD regional networks.
 
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SCFlyer
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Re: Australian Aviation Thread - April 2020

Thu Apr 16, 2020 8:39 pm

https://www.afr.com/politics/federal/pr ... 415-p54jwd

Also states in a related article that one of the proposals from one of the "supposed" suitors is to close down Tiger, International and Regional. Basically concentrating on the trunk routes, although unclear if it was to take the LCC route or a Hybrid (ala Premium Economy from the Brett Godfrey 'Virgin Blue' era).

Either way if a investment firm does eventually takes over VA from the current "misfits" of airlines making up the current VA shareholding registry, the certain thing, IMO, is that VA in its current form will cease to exist. Basically creating a new airline just with the $5B debt from VA, and with the potential change in ownership, the airline name will likely change as well to save $$ on licensing fees to Branson.

Private equity investors circle over Virgin
Phillip Coorey and Jemima Whyte
Apr 16, 2020 – 10.30pm

At least two private consortia are circling to take over Virgin Australia, reducing pressure on the federal government to bail out the ailing airline.

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