Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
xiaotung
Posts: 1071
Joined: Fri Jan 06, 2006 7:58 pm

Re: Australian Aviation Thread - April 2020

Fri Apr 17, 2020 4:44 pm

SCFlyer wrote:

If the 'new' Virgin does survive regardless if VAH files voluntary administration or not will likely be a 1-class domestic LCC or 1-class domestic Hybrid at most. This will fail the criteria for full membership of any full service alliance in general. Not that Alliances are relevant right now, or for the foreseeable future.
Connecting Partner levels are pretty much of limited benefit, pointless and the successor will not likely have many FSC friends apart from bare interlines.

So basically yes, 'VA mk II' will be a domestic carrier in the foreseeable future as Luxon allegedly wanted, but more forming alliances with fellow LCCs in the Asian region. It may even open the sucessor to possibly (re)join the Value Alliance to team up with Scoot, Jeju Air and Cebu Pacific doing the feeding for the VA successor flying into the Asian region once demand recovers from COVID.

Velocity will also likely be sold-off if the investor that gets the VAH assets at administration decides to go the pure domestic LCC route. SIA or Westfarmers may acquire Velocity for the pure reason of absorbing their customer base into Krisflyer or Flybuys with the later having a partnership to the successor before closing Velocity down for good.


Not so sure about that. NZ's 1-class hybrid model on narrowbody aircraft serves them pretty well in Star Alliance and Avianca Brasil joined as a full member as a 1-class domestic only airline. Can't see Velocity being sold off unless Virgin completely collapes. A loyalty programme without an airline attached can't be nearly as valuable and profitable.
 
xiaotung
Posts: 1071
Joined: Fri Jan 06, 2006 7:58 pm

Re: Australian Aviation Thread - April 2020

Fri Apr 17, 2020 4:53 pm

SCFlyer wrote:
But wait.. there's still more. According to the News Corp media, now other Chinese Government owned carriers are rumoured to get involved. CZ and CA were named in the (paywalled) article as the parties "rumoured" to be in 'discussions' to "buy VA", although no formal offer was lodged.

This move won't be "popular" politically in light of the recent events worldwide.

Source (Paywall) https://www.couriermail.com.au/business ... c4e6c91ba8


I am really skeptical about what was said in the article that 2 of the big three Chinese airlines are approaching VA jointly. I am not sure if this was intentionally leaked to put pressure on the Morrison government if they allow the 2nd biggest airline to become fully Chinese owned.

Chinese airlines did not bail out Alitalia and I can't see why they would want to take over VA, unless someone got confused that CA and CZ might take over HNA's various assets if Hainan Airlines collapse as this was being floated in the last month or 2.
 
qf2048
Posts: 105
Joined: Sat Apr 09, 2016 3:16 am

Re: Australian Aviation Thread - April 2020

Fri Apr 17, 2020 9:54 pm

QF may get its third Haneda slot after all...[/quote]

I was thinking this too but didn't want to mention it too early. QF 51/52 could move to HND making all mainline services out of the one airport. Still think it will be a while before the passenger numbers return and this is probably not in QF's list of prioritises.
ZL,QF,KE,BA,AS,CX,FR,U2,W6,EI,IB,JL,AY,LH,AA,AC,FQ,DJ,JQ,LA,FJ,QS,NZ,NF,SB,PG,EK,AB,VA,MH,KA,VN
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Fri Apr 17, 2020 10:32 pm

xiaotung wrote:
SCFlyer wrote:

If the 'new' Virgin does survive regardless if VAH files voluntary administration or not will likely be a 1-class domestic LCC or 1-class domestic Hybrid at most. This will fail the criteria for full membership of any full service alliance in general. Not that Alliances are relevant right now, or for the foreseeable future.
Connecting Partner levels are pretty much of limited benefit, pointless and the successor will not likely have many FSC friends apart from bare interlines.

So basically yes, 'VA mk II' will be a domestic carrier in the foreseeable future as Luxon allegedly wanted, but more forming alliances with fellow LCCs in the Asian region. It may even open the sucessor to possibly (re)join the Value Alliance to team up with Scoot, Jeju Air and Cebu Pacific doing the feeding for the VA successor flying into the Asian region once demand recovers from COVID.

Velocity will also likely be sold-off if the investor that gets the VAH assets at administration decides to go the pure domestic LCC route. SIA or Westfarmers may acquire Velocity for the pure reason of absorbing their customer base into Krisflyer or Flybuys with the later having a partnership to the successor before closing Velocity down for good.


Not so sure about that. NZ's 1-class hybrid model on narrowbody aircraft serves them pretty well in Star Alliance and Avianca Brasil joined as a full member as a 1-class domestic only airline. Can't see Velocity being sold off unless Virgin completely collapes. A loyalty programme without an airline attached can't be nearly as valuable and profitable.


IIRC, Azul Brazil was in the process of applying internationally for widebodies onto the AOC with a 'J' class at the time, and NZ already has "Business" class on International Routes.

Any VAH successor from what I read will not have single route with domestic 'J' class, and will either go the Hybrid or 'Pure LCC'. That's already a fail in criteria applying as a full member of a FSC Alliance. Not that Alliances are relevant for the foreseeable future if a 'VA Mk II' gets up.

Selling the loyalty program entirely in most cases are purely for "merging" that program (customer base) in another program rather than keeping the acquired program standing. The customer base is the only "valuable" part of any program for sale. Hence Westfarmers (Flybuys) and SIA (Krisflyer) being mentioned as potential parties for acquiring Velocity.

Saying that, any investor parties going the "pure LCC route" for VA Mk II, if that party gets up, won't be requiring any loyalty program for the foreseeable future and can see Velocity ripe for sell off.
 
moa999
Posts: 922
Joined: Tue Mar 13, 2018 6:37 am

Re: Australian Aviation Thread - April 2020

Fri Apr 17, 2020 11:35 pm

Velocity only has value with an airline supporting it and providing access to a small number of cheap seats at marginal prices that can be purchased by the Velocity customer for a good $/point ration.
Buying a toaster for 1c/point doesn't have the same interest levels.

And arguably less value if the underlying airline doesn't have Business/Premium seats

From the previous structure (prior to the Virgin purchase) I understood Velocity sat within a trust and had about $500m of cash which was there to offset it's points liability
 
User avatar
RyanairGuru
Posts: 8264
Joined: Wed Nov 01, 2006 3:59 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 12:01 am

Well threatening to move to Melbourne paid off. Queensland Government has pledged $200 million, conditional on HQ remaining in Brisbane.

https://mobile.abc.net.au/news/2020-04- ... fmredir=sm

I guess the unknown is what, if any, the Victorian Government had offered.
Worked Hard, Flew Right
 
JQ321
Posts: 147
Joined: Mon Jan 14, 2019 12:40 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 12:27 am

RyanairGuru wrote:
Well threatening to move to Melbourne paid off. Queensland Government has pledged $200 million, conditional on HQ remaining in Brisbane.

https://mobile.abc.net.au/news/2020-04- ... fmredir=sm

I guess the unknown is what, if any, the Victorian Government had offered.

The Queensland Government might aswell just give QANTAS $200M to move to Brisbane. Waste of money.
 
zkncj
Posts: 3802
Joined: Wed Nov 09, 2005 4:57 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 12:40 am

RyanairGuru wrote:
Well threatening to move to Melbourne paid off. Queensland Government has pledged $200 million, conditional on HQ remaining in Brisbane.

https://mobile.abc.net.au/news/2020-04- ... fmredir=sm

I guess the unknown is what, if any, the Victorian Government had offered.


Maybe the QLD Government could be interesting in purchasing an stake in the new VA MK2, some other investors cam to the party?

Tourism is import to QLD, and Domestic Tourism will become even more import to QLD post COVID-19 in the process of rebuilding the marketing. Could see why it would be worth them trying to invest into VA to keep competition around.

Tourism contributes $12.8 billion directly to the Queensland economy, accounting for 3.9% of Queensland's gross state product (GSP). The industry indirectly contributes an additional $12.5 billion to the state's economy, making the total contribution $25 billion, or 7.8% of total Queensland GSP.
Source: https://www.business.qld.gov.au/industries/invest/tourism-investment/market-profile


Up $25billion an year into the Queensland economy is pretty big, and right now those figures will be taking an massive hit.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 12:57 am

getluv wrote:
I think the “great” service was just young blond flight attendants which were also prominent in their advertising. I think this freshness and youthful vibe was fresh at the beginning and then it wasn’t.


Yes, it was a bit novel at first because we were used to the entrenched QF/AN ways but it soon wore thing and seemed a bit 'try hard'. I didn't like the informal greetings, instead of "Mr Anderson" it was "Craig!". Board the plane and somebody I have never met puts on a cheery air and says "Hi Craig!". No thanks.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 12:59 am

SCFlyer wrote:
But wait.. there's still more. According to the News Corp media, now other Chinese Government owned carriers are rumoured to get involved. CZ and CA were named in the (paywalled) article as the parties "rumoured" to be in 'discussions' to "buy VA", although no formal offer was lodged.

This move won't be "popular" politically in light of the recent events worldwide.

Source (Paywall) https://www.couriermail.com.au/business ... c4e6c91ba8


Very true, even if this report has legs, and I honestly doubt that, Scurrah is said to be chasing Australian backers, Australian money and as much Australian ownership as possible. The optics of having Virgin Australia become Chinese-owned would never be good, and right now they would be so bad as to make the whole prospect a non-starter. People would quickly joke that the airline was not Virgin Australia but Virgin China!
 
travelhound
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:06 am

zkncj wrote:
RyanairGuru wrote:
Well threatening to move to Melbourne paid off. Queensland Government has pledged $200 million, conditional on HQ remaining in Brisbane.

https://mobile.abc.net.au/news/2020-04- ... fmredir=sm

I guess the unknown is what, if any, the Victorian Government had offered.


Maybe the QLD Government could be interesting in purchasing an stake in the new VA MK2, some other investors cam to the party?

Tourism is import to QLD, and Domestic Tourism will become even more import to QLD post COVID-19 in the process of rebuilding the marketing. Could see why it would be worth them trying to invest into VA to keep competition around.

Tourism contributes $12.8 billion directly to the Queensland economy, accounting for 3.9% of Queensland's gross state product (GSP). The industry indirectly contributes an additional $12.5 billion to the state's economy, making the total contribution $25 billion, or 7.8% of total Queensland GSP.
Source: https://www.business.qld.gov.au/industries/invest/tourism-investment/market-profile


Up $25billion an year into the Queensland economy is pretty big, and right now those figures will be taking an massive hit.


There's an airline called Alliance Airlines with a market capitalization of $254 million. It is already doing a fair amount of Virgin's Queensland regional flying.

Don't want to be a cynic, but considering this airline is already Queensland based and has the infrastructure and management expertise to grow the airline, if the Queensland government wants to hand out black cheques, maybe it should be a little more targeted and put its $200 million elsewhere.

From where I sit, with the bulk of the Queensland airline market based around recreation, tourism and mining, a smaller, more nimble and relatively debt free airline could offer benefits (lower fares) that a revitalised Virgin Australia can't.

I think we can live without a Virgin Australia, especially when we consider we don't even know what a VA mark 2 will or won't actually be.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:08 am

Government won't block potential foreign Virgin buyer

The Morrison government will not stand in the way of a foreign white knight saving Virgin Australia, given the importance of maintaining two domestic airlines.


https://www.afr.com/companies/transport ... 417-p54kpr

This seems very hypocritical if the "foreign white knight" is Chinese.

As per the article:

Three weeks ago, Mr Frydenberg lowered the dollar value of every foreign investment bid that would trigger scrutiny by the FIRB and then, ultimately, by him to zero. The move was designed in large part to counter concerns Chinese interests would snap up distressed Australian companies and assets amid the coronavirus-induced downturn.


So three weeks ago the Govt was so concerned about 'the Chinese' snapping up distressed Aussie companies, but now it would be okay if the Chinese snapped up a distressed Virgin Australia?

I suppose the Govt's justification would be that this keeps a second airline flying, and they could also crow about having been proven right that there was a 'market solution' out there, but a buyout by a Chinese airline or conglomerate would certainly be super-controversial, as would the Govt permitting it.

I hope this is just Plan C after the Plan A of Govt bailout, which looks very unlikely to happen, and Plan B of private equity investment and takeover, mainly using AU interests and money, which seems the way things are headed.
 
redroo
Posts: 570
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:09 am

QLD offering is no more than wanting to be seen to do something for its voters. $200m is peanuts in the scale of things.
 
zkncj
Posts: 3802
Joined: Wed Nov 09, 2005 4:57 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:14 am

travelhound wrote:
zkncj wrote:
RyanairGuru wrote:
Well threatening to move to Melbourne paid off. Queensland Government has pledged $200 million, conditional on HQ remaining in Brisbane.

https://mobile.abc.net.au/news/2020-04- ... fmredir=sm

I guess the unknown is what, if any, the Victorian Government had offered.


Maybe the QLD Government could be interesting in purchasing an stake in the new VA MK2, some other investors cam to the party?

Tourism is import to QLD, and Domestic Tourism will become even more import to QLD post COVID-19 in the process of rebuilding the marketing. Could see why it would be worth them trying to invest into VA to keep competition around.

Tourism contributes $12.8 billion directly to the Queensland economy, accounting for 3.9% of Queensland's gross state product (GSP). The industry indirectly contributes an additional $12.5 billion to the state's economy, making the total contribution $25 billion, or 7.8% of total Queensland GSP.
Source: https://www.business.qld.gov.au/industries/invest/tourism-investment/market-profile


Up $25billion an year into the Queensland economy is pretty big, and right now those figures will be taking an massive hit.


There's an airline called Alliance Airlines with a market capitalization of $254 million. It is already doing a fair amount of Virgin's Queensland regional flying.

Don't want to be a cynic, but considering this airline is already Queensland based and has the infrastructure and management expertise to grow the airline, if the Queensland government wants to hand out black cheques, maybe it should be a little more targeted and put its $200 million elsewhere.

From where I sit, with the bulk of the Queensland airline market based around recreation, tourism and mining, a smaller, more nimble and relatively debt free airline could offer benefits (lower fares) that a revitalised Virgin Australia can't.

I think we can live without a Virgin Australia, especially when we consider we don't even know what a VA mark 2 will or won't actually be.


Probably more worth QLD Government acquiring part of Alliance Airlines then? along then maybe with the Assets and AOC of VARA, then sift the assets to QLD.
 
redroo
Posts: 570
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:22 am

Both qantas and virgin are going to have to seriously shrink to survive.

If lockdown gets lifted tomorrow, there will be no return to hourly flights between the capital cities. The demand will not be there. People will be very cautious about flying, particularly interstate. Businesses will be even more cautious ... no interstate meetings, conferences, training, etc for a long time. The airlines will gradually increase supply in line with demand... but until they do they have huge fixed costs that need to be paid for.

Flights to the Gold Coast and other vacation destinations will be a mixed bag. We are entering a bad recession that will impact a lot of people. They will hunker down. Discretionary spending will be cut. Weekends in Byron and the Goldie will be limited. Domestic vacation will get an uplift from the lack of international travel, but it wont be across the board.

International is screwed. The government is not going to let COVID back into the country, so international flying will be curtailed for a long time. When it does open up again it’s likely you’ll have to isolate for two weeks after you return. Vacations to Bali will be out - thats if Indonesia gets a health pass in the first place. There’s a fleet of A380s, 747s, 777, A330s and B787s that are going to significantly under-utilised for a long time. I cant see any international flying this calendar year, and certainly curtailed significantly next calendar year as well.

So... Virgin are going to need to significantly resize to meet demand. The 777 and A330s are going to be barely used. Their usage wont cover their lease payments or cost of capital. Can you see 80 737s being used? Not likely. Maybe half that. Half the 737s are leased and the other half are owned. The leases need to be paid and there is probably still debt on the owned ones. Given their debt, the balance sheet, the lack of profits, their cost base.... they are screwed.

A bailout does not address the problem. It only burns more cash.

Qantas are not coming out of this unscathed either... but they are starting from a significantly better position.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:27 am

Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?
 
a19901213
Posts: 179
Joined: Sat Feb 23, 2013 10:38 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:33 am

I wonder what would happen to VA’s HND slot if they collapse.

Should QF receive that extra slot I wonder if they’re gonna make it double daily HND-SYD given the demand would be so low post-coronavirus period.
 
User avatar
RyanairGuru
Posts: 8264
Joined: Wed Nov 01, 2006 3:59 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:36 am

CraigAnderson wrote:
Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?


Condor, United and Delta (non-scheduled flights) are three more that come to mind that have operated outbound repatriation flights.

Inbound we've had Nepal Airlines, Qatar, Lion Air, Latam, HiFly, and probably several more.
Worked Hard, Flew Right
 
Ishrion
Posts: 2653
Joined: Mon Feb 04, 2019 6:17 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:41 am

CraigAnderson wrote:
Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?


- Lufthansa?
- LOT
- Edelweiss
- Condor
- Nepal Airlines
- EL AL
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:43 am

redroo wrote:
So... Virgin are going to need to significantly resize to meet demand. The 777 and A330s are going to be barely used. Their usage wont cover their lease payments or cost of capital. Can you see 80 737s being used? Not likely. Maybe half that. Half the 737s are leased and the other half are owned. The leases need to be paid and there is probably still debt on the owned ones. Given their debt, the balance sheet, the lack of profits, their cost base.... they are screwed.A bailout does not address the problem. It only burns more cash.


Your whole post provided an excellent summary and analysis of how this 'recovery' will look. Definitely domestic first, then probably AU-NZ if we both track the same success and open our borders to one another without needed a 14 day isolation period at the end of the trip. You'd have to be made to go anywhere near Bali for a long time. Singapore would probably be a safer bet also because it's been able to cut itself off and the latest 'circuit breaker' measures are the same as what we have in AU, although the high number of cases reported among foreign workers housed in dormitories worries me, they need to get that under control.

Anyway back to your quoted post above. An administrator wields incredible power in most circumstances but if Virgin Australia goes into administration then it's clearly due to COVID19 which in turn lets the administrator invoke the 'force majeure' clause which could be used to break every lease agreement. So yes, a bailout isn't the answer here.

If Scurrah had his hands completely untied he would probably want to do what COVID19 has already made necessary such as closing the NZ crew base and pushing Tiger away, and voluntary admin would take this to the next level and let the airline go right back to basics and yes, even shed a lot of staff in the process, not ideal but it's all about 'rebooting' Virgin in the right shape for these times. So the administrator can break the A330 leases, break half the 737 leases, force the sale of the B777s, cut staff and basically ensure that the money which investors pour into 'Virgin 2.0' is all properly spent, not wasted on the current outdated model. I also hope that means a cleanout of a lot of the upper management, too.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:47 am

Ishrion wrote:
CraigAnderson wrote:
Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?


- Lufthansa?
- LOT
- Edelweiss
- Condor
- Nepal Airlines
- EL AL


Oh, I missed Lufthansa, would have been nice to see the crane back here :(
 
Ishrion
Posts: 2653
Joined: Mon Feb 04, 2019 6:17 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:52 am

CraigAnderson wrote:
Ishrion wrote:
CraigAnderson wrote:
Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?


- Lufthansa?
- LOT
- Edelweiss
- Condor
- Nepal Airlines
- EL AL


Oh, I missed Lufthansa, would have been nice to see the crane back here :(


Actually not 100% sure on that. I don't think Lufthansa had any repatriation flights in Australia? I put the question mark there for verification
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:59 am

a19901213 wrote:
I wonder what would happen to VA’s HND slot if they collapse. Should QF receive that extra slot I wonder if they’re gonna make it double daily HND-SYD given the demand would be so low post-coronavirus period.


Yes, everything has changed since those slots and flights were announced! It's incredible, isn't it!

I would expect QF to jump in and request the slot so they can lock it away but also explain they don't have demand right now and hold off the launch of a second SYD-HND until much later. QF originally planned to retire the current B747 on this route and apparently this flight has consistently high loads, so swapping those for a double-daily A330 with one service in the day and another in the night, like ANA planned, would be good.

An alternative utilisation would be to immediately swap BNE-NRT for BNE-HND as soon as the flights resume.
 
User avatar
RyanairGuru
Posts: 8264
Joined: Wed Nov 01, 2006 3:59 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 1:59 am

Ishrion wrote:
CraigAnderson wrote:
Ishrion wrote:

- Lufthansa?
- LOT
- Edelweiss
- Condor
- Nepal Airlines
- EL AL


Oh, I missed Lufthansa, would have been nice to see the crane back here :(


Actually not 100% sure on that. I don't think Lufthansa had any repatriation flights in Australia? I put the question mark there for verification


No Lufthansa, unless you count an A380 or 747 passing overhead at 39,000 feet. They operated 10 (?) repatriation flights to New Zealand but none to Australia.
Worked Hard, Flew Right
 
eamondzhang
Posts: 1714
Joined: Thu Sep 23, 2010 8:23 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:00 am

IndianicWorld wrote:
I tend to think many have short memories really about DJ/VA.

Back when it made the decision to move to its VA full service model, it was lauded as a great idea as the hybrid space that DJ had seemed to gravitate to was seen as a confusing brand position.

There were numerous comments at the time suggesting there was no value in what DJ were offering, with no clear understanding of what they were aiming for. This gave QF and JQ a chance to squeeze them from both sides, leaving them with a very limited corporate travel appeal and a leisure market that was moving away to JQ. It was t a move they made lightly.

The purchase of TT also was seen as a good move by most at the time as it gave VA a chance to focus on its key market position goals, but somehow They were unable to find a balance that worked.

Honestly I still think the original idea of moving up VA to FSNC level and using TT as a LCC backup is good - but the execution of the plan is done so poorly which leads to the states VA is currently in

I just flew them in February, and they're still confusing as hell on cabin services provided (yes for flights during meal time) - if you want to be a FSNC competing with Qantas, make sure you offer FSNC services!

I think some points from my view that they completely missed the boat -
- Still charging for baggage and drink onboard (I know baggage charge was removed probably 2 years ago but it was confusing enough)
- Completely ballooned their cost base while unable to achieve their yield potential - I wuold attribute part of the yield problem to their confusing stand on where they are
- A couple bad fleet decisions like ATR saga is not helping their financials in any way
- If international was a loss leader, then cut it, instead they kept it for ages
- The DPS saga between VA and TT is just one thing in to show what a complete mess VA is
- IMHO Tiger brand should've ditched a while ago and replaced with something else - the brand itself is not doing any good to anybody

Michael
 
JQ321
Posts: 147
Joined: Mon Jan 14, 2019 12:40 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:01 am

CraigAnderson wrote:
Government won't block potential foreign Virgin buyer

The Morrison government will not stand in the way of a foreign white knight saving Virgin Australia, given the importance of maintaining two domestic airlines.


https://www.afr.com/companies/transport ... 417-p54kpr

This seems very hypocritical if the "foreign white knight" is Chinese.

As per the article:

Three weeks ago, Mr Frydenberg lowered the dollar value of every foreign investment bid that would trigger scrutiny by the FIRB and then, ultimately, by him to zero. The move was designed in large part to counter concerns Chinese interests would snap up distressed Australian companies and assets amid the coronavirus-induced downturn.


So three weeks ago the Govt was so concerned about 'the Chinese' snapping up distressed Aussie companies, but now it would be okay if the Chinese snapped up a distressed Virgin Australia?

I suppose the Govt's justification would be that this keeps a second airline flying, and they could also crow about having been proven right that there was a 'market solution' out there, but a buyout by a Chinese airline or conglomerate would certainly be super-controversial, as would the Govt permitting it.

I hope this is just Plan C after the Plan A of Govt bailout, which looks very unlikely to happen, and Plan B of private equity investment and takeover, mainly using AU interests and money, which seems the way things are headed.

Virgin isn't really an Aussie company. I think he means Australian owned companies which VA really isn't.
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:10 am

JQ321 wrote:
CraigAnderson wrote:
Government won't block potential foreign Virgin buyer

The Morrison government will not stand in the way of a foreign white knight saving Virgin Australia, given the importance of maintaining two domestic airlines.


https://www.afr.com/companies/transport ... 417-p54kpr

This seems very hypocritical if the "foreign white knight" is Chinese.

As per the article:

Three weeks ago, Mr Frydenberg lowered the dollar value of every foreign investment bid that would trigger scrutiny by the FIRB and then, ultimately, by him to zero. The move was designed in large part to counter concerns Chinese interests would snap up distressed Australian companies and assets amid the coronavirus-induced downturn.


So three weeks ago the Govt was so concerned about 'the Chinese' snapping up distressed Aussie companies, but now it would be okay if the Chinese snapped up a distressed Virgin Australia?

I suppose the Govt's justification would be that this keeps a second airline flying, and they could also crow about having been proven right that there was a 'market solution' out there, but a buyout by a Chinese airline or conglomerate would certainly be super-controversial, as would the Govt permitting it.

I hope this is just Plan C after the Plan A of Govt bailout, which looks very unlikely to happen, and Plan B of private equity investment and takeover, mainly using AU interests and money, which seems the way things are headed.

Virgin isn't really an Aussie company. I think he means Australian owned companies which VA really isn't.


Precisely. Not many Australians (especially the armchair commentators on other websites outside of a.net) are going to be up in arms if the (unlikely) case of one of the Chinese carriers purchases the VAH assets.

If anything it'll just swear those armchair commentators to not fly them otherwise, on top of the perception that the "new VA mk 2" is owned by the Chinese if the News Corp report had any legs.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:12 am

a36001 wrote:
Well the QLD government blinked first to VA's threat of moving head office to Melbourne by giving them $200 million of Queensland tax payers money. Not that that amount will do anything to help the airline. They have asked (some might say demanded) the other states "tip in" and help save the airline.
Of course this strategy was manipulated by VA in the media and the QLD government fell for it, I just don't like how VA are threatning the goverment with this talk of monopoly's and Qantas will run wild charging $1000 for one way Syd>CBR and the government must save us!


100% agree. I am sure this was barely considered in the boardroom and was just floated and then handed to a journalist to write up as a 'scoop' so they could pressure the QLD government, and obviously it worked. Easiest $200 million that the airline ever made! Whoever thought this up and 'leaked' it to the journalist should charge the airline a 1% commission and retire with his or her $2m cut!
 
Fuling
Posts: 276
Joined: Sun Apr 10, 2011 4:41 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:18 am

CraigAnderson wrote:
Ishrion wrote:
CraigAnderson wrote:
Does anybody know where there's a list of all the foreign airlines which have done repatriation flights from Australia? I think so far we have seen Austrian and KLM but there would surely have been more?


- Lufthansa?
- LOT
- Edelweiss
- Condor
- Nepal Airlines
- EL AL


Oh, I missed Lufthansa, would have been nice to see the crane back here :(


Yesterday, Iberia posted on their social media about a repatriation flight to Sydney sometime in April. I couldn't find any details about dates or type, but definitely keep an eye out for that.
 
Aviator34ID
Posts: 69
Joined: Mon Jan 27, 2020 7:34 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:19 am

As I read the Australian article (rather than just the headline), the offer is conditional on the federal government and other states joining in. So it seems it is just a fluff offer.
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:24 am

This report from The Age (Nine Media Co - formerly Fairfax) suggests that the 'interested' parties in VAH's assets are just there to wait for VAH to fall over (read: file Voluntary Administration) so they can pick up the 'carcass' (assets) and start up again afresh.

It's been reported elsewhere that one of the interested parties - BGH Capital supposedly has a record of 'downsizing' and asset stripping other companies as well.

Quoted introduction from the article below

As Virgin Australia scrambles to stay intact and afloat, more than a dozen private equity funds are hovering in the hope the airline will call it a day so they can pick up the carcass on the cheap.

The Australian Financial Review revealed on Friday that two private consortia, including BGH Capital, a private equity operator run by Ben Gray, were doing the numbers on the airline.

The newspaper said their interest would take the pressure off the government to provide a $1.4 billion loan to the struggling airline. However, The Age and The Sydney Morning Herald can reveal that numerous private equity operators and hedge funds would be interested in buying the airline if it was put into administration.


https://www.theage.com.au/business/comp ... 54kw6.html
 
eamondzhang
Posts: 1714
Joined: Thu Sep 23, 2010 8:23 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:31 am

SCFlyer wrote:
This report from The Age (Nine Media Co - formerly Fairfax) suggests that the 'interested' parties in VAH's assets are just there to wait for VAH to fall over (read: file Voluntary Administration) so they can pick up the 'carcass' (assets) and start up again afresh.

It's been reported elsewhere that one of the interested parties - BGH Capital supposedly has a record of 'downsizing' and asset stripping other companies as well.

Quoted introduction from the article below

As Virgin Australia scrambles to stay intact and afloat, more than a dozen private equity funds are hovering in the hope the airline will call it a day so they can pick up the carcass on the cheap.

The Australian Financial Review revealed on Friday that two private consortia, including BGH Capital, a private equity operator run by Ben Gray, were doing the numbers on the airline.

The newspaper said their interest would take the pressure off the government to provide a $1.4 billion loan to the struggling airline. However, The Age and The Sydney Morning Herald can reveal that numerous private equity operators and hedge funds would be interested in buying the airline if it was put into administration.


https://www.theage.com.au/business/comp ... 54kw6.html

I'm honestly not surprised by this kind of move. IMHO VA's days are doomed from the outbreak of this pandamic.

Michael
 
dredgy
Posts: 488
Joined: Fri Jun 16, 2017 5:13 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 2:48 am

moa999 wrote:
Velocity only has value with an airline supporting it and providing access to a small number of cheap seats at marginal prices that can be purchased by the Velocity customer for a good $/point ration.
Buying a toaster for 1c/point doesn't have the same interest levels.

And arguably less value if the underlying airline doesn't have Business/Premium seats

From the previous structure (prior to the Virgin purchase) I understood Velocity sat within a trust and had about $500m of cash which was there to offset it's points liability


Eh there have been successful loyalty programs without airlines, but the airline doesn’t have to be virgin. If Velocity is spun off, And has an Australian exclusivity agreement won’t Virgin, it can approach other international partners that aren’t in Virgins interest and can therefore *maybe* compete with QFF, so long as there’s enough retail and credit card partners on board.
 
tullamarine
Posts: 2472
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 3:07 am

Any buyer from this point on will only be interested in the company after it has first been through administration. Following the administration process much of the debt (up to 50% probaby) will have been extinguished with bondholders and aircraft lessors principally taking the loss. Administration would basically create a good company / bad company split so the good company can re-emerge and the bad company along with unwanted assets can be liquidated.

There will be plenty of interest for the good company that re-emerges particularly if the structure allows the existing tax losses to be carried into the continuing business. The rumoured Chinese airlines and the private equity businesses are just two. I would expect that Australian industry funds led by TWU Super will also put their hand up at some point though more as a member of a consortium than a sole purchaser.

As to the type of airline that re-emerges, it is just speculation. A due diligence process will allow any acquisitor to assess the model that may work. Talk about alliance memberships is complete rubbish; global alliances were an outdated construct before COVID, now they are likely to be a quaint novelty with every airline struggling to regain its own profitability and not worrying about a bloated add-on that provides little to the bottom line.

Talk about business names is also just speculation too. A complete rebrand is very expensive once the task of building brand awareness is considered. It may be cheaper to just put the pressure on SRB for a licensing discount and continue with existing branding
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
 
DavidByrne
Posts: 1644
Joined: Mon Sep 10, 2007 4:42 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 3:08 am

I'm interested to understand why VA had no success with the ATR-72 as an aircraft. It's ideal for short-haul operations, and reportedly burns significantly less fuel than the Q400 (though is slower). NZ uses them highly successfully on many of its regional domestic operations on stage lengths up to two hours, and has expanded its fleet to 29 aircraft. It even uses them on the trunk route from WLG-CHC, where they are preferred to A320s because of the short distance involved. Why couldn't VA find a way of making them useful and profitable?
This is not my beautiful house . . . This is not my beautiful wife
 
tullamarine
Posts: 2472
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 3:15 am

DavidByrne wrote:
I'm interested to understand why VA had no success with the ATR-72 as an aircraft. It's ideal for short-haul operations, and reportedly burns significantly less fuel than the Q400 (though is slower). NZ uses them highly successfully on many of its regional domestic operations on stage lengths up to two hours, and has expanded its fleet to 29 aircraft. It even uses them on the trunk route from WLG-CHC, where they are preferred to A320s because of the short distance involved. Why couldn't VA find a way of making them useful and profitable?

It was more a matter of poor timing. Just as the aircraft were introduced, the mining boom finished so towns such as Townsville, Gladstone and Mackay all went into recession. Given population volumes and greater distances in Australia compared with NZ, the ATR was never really an option for trunk routes except SYD-CBR.
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
 
zkncj
Posts: 3802
Joined: Wed Nov 09, 2005 4:57 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 3:36 am

tullamarine wrote:
DavidByrne wrote:
I'm interested to understand why VA had no success with the ATR-72 as an aircraft. It's ideal for short-haul operations, and reportedly burns significantly less fuel than the Q400 (though is slower). NZ uses them highly successfully on many of its regional domestic operations on stage lengths up to two hours, and has expanded its fleet to 29 aircraft. It even uses them on the trunk route from WLG-CHC, where they are preferred to A320s because of the short distance involved. Why couldn't VA find a way of making them useful and profitable?

It was more a matter of poor timing. Just as the aircraft were introduced, the mining boom finished so towns such as Townsville, Gladstone and Mackay all went into recession. Given population volumes and greater distances in Australia compared with NZ, the ATR was never really an option for trunk routes except SYD-CBR.


Also the Australian market is capacity, over frequency you'll tend to find an regional port will get an jet service 1-2x daily instead of props every 1-2hours to key regional ports. Where as in New Zealand is all about the frequency.

If the East Coast regional routes we're about high frequency the ATR's should of been able to make an decent profit.
 
redroo
Posts: 570
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 4:10 am

tullamarine wrote:
Any buyer from this point on will only be interested in the company after it has first been through administration. Following the administration process much of the debt (up to 50% probaby) will have been extinguished with bondholders and aircraft lessors principally taking the loss. Administration would basically create a good company / bad company split so the good company can re-emerge and the bad company along with unwanted assets can be liquidated.

There will be plenty of interest for the good company that re-emerges particularly if the structure allows the existing tax losses to be carried into the continuing business. The rumoured Chinese airlines and the private equity businesses are just two. I would expect that Australian industry funds led by TWU Super will also put their hand up at some point though more as a member of a consortium than a sole purchaser.

As to the type of airline that re-emerges, it is just speculation. A due diligence process will allow any acquisitor to assess the model that may work. Talk about alliance memberships is complete rubbish; global alliances were an outdated construct before COVID, now they are likely to be a quaint novelty with every airline struggling to regain its own profitability and not worrying about a bloated add-on that provides little to the bottom line.

Talk about business names is also just speculation too. A complete rebrand is very expensive once the task of building brand awareness is considered. It may be cheaper to just put the pressure on SRB for a licensing discount and continue with existing branding


Agree. There is just too much debt to take on with a rescue. Better to let the house of cards fall and pick up the good pieces afterwards.
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 4:21 am

Overall at this stage, As much as it may seem "interesting" to speculate at times. IMO it's best to sit back and watch the VA "restructure" and path the restructure administrators plan to take. For example, if it's been officially decided that Voluntary Administration is the path VAH will be taking, so be it.

The 'speculative' news articles such as the "ZOMG CHINESE TAKEOVER" doesn't help though, IMO.
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 5:21 am

ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards VA.

Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)

He also suggested ANA and a certain Pom were interested in some of partnership along with private equity.

And he said China Eastern was also making expressions of interests.

Looks like the market based solution is shaping up well.

Horton wrote an article on this a few days back- obviously his radio appearance this morning was more up to date.

https://www.forbes.com/sites/willhorton ... 0403413ffc
 
JQ321
Posts: 147
Joined: Mon Jan 14, 2019 12:40 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 6:38 am

Morrofinch wrote:
ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards VA.

Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)

He also suggested ANA and a certain Pom were interested in some of partnership along with private equity.

And he said China Eastern was also making expressions of interests.

Looks like the market based solution is shaping up well.

Horton wrote an article on this a few days back- obviously his radio appearance this morning was more up to date.

https://www.forbes.com/sites/willhorton ... 0403413ffc

Annoy QANTAS is probably an understatement, screw them would be more accurate.
 
User avatar
SQ22
Moderator
Posts: 1851
Joined: Sat Feb 25, 2012 9:29 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 6:56 am

May I remind you to keep politics out of this thread? If you are interested in discussing any specific subject with respect to politics, feel free to open a thread in Non-Aviation forum. Thanks.
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 7:18 am

Morrofinch wrote:
ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards Virgin Australia.
Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)


I honestly don't know how some 'reporters' claim to get inside information like this, it's not as if QR goes around saying this, sounds more like a bit of speculative "fake news" to me.

But if for argument's sake QR did buy into Virgin, surely that would spell an end to its membership of OneWorld? OneWorld airlines do form alliances with airlines outside the family, eg CX and NZ, but to enter the home market of a BIG OneWorld member like Qantas as the owner or backer of its sole competitor, that's got to be grounds for divorce!
 
User avatar
CraigAnderson
Posts: 535
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 7:20 am

Another airline we never see in Australia is headed this way

Iberia mounts Sydney-Madrid repatriation flight for Spanish nationals

https://www.executivetraveller.com/news ... rid-flight

It's a SYD-BKK-MAD flight, departing SYD on April 30, doesn't mention type of aircraft but you'd assume A350?
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 7:37 am

There are more than two equity investors interested in VA.

This proposal from this investor (a 2-class Domestic Carrier) is dependent on VAH filing administration and proposes using the VAI AOC to form the new carrier. It will also be dependent on being at least 51% owned by Australian investors.

This is because this operator is open to the suggestion of retaining the owned 77Ws to operate to LAX only as VA's "only" international destination in the existing partnership with DL. All other international would be closed entirely and some rouites such as NZ would be open to discussions with SIA to take over.

IMO, I find this proposal overall unlikely. Although moving to the VAi AOC also simplifies the fleet and ensures that a "VA mk II" is 51% Australian owned.

As stated previously, LAX was the only International destination making money for VAi before COVID.

Quoted relevant bits.

"Strip it back to .. a domestic operator... a full-service airline focused on key routes and simplify the aircraft and staff arrangements." -Private equity operator
Contracts could also be rewritten, including the $15 million a year in payments to Branson for use of the Virgin name and logo.

The spectre of this playing out will undoubtedly focus any negotiations it is having with its current debt holders about restructuring the debt to stave off administrators taking control of the situation. It would put a question mark over the credit notes and vouchers offered to customers when most of Virgin's flights were cancelled due to the coronavirus pandemic.

In terms of how the operation would look, the likely playbook would turn it into a domestic operator. One private equity operator's suggestion would be to "strip it back to what it started as, a domestic operator, but not a low-cost carrier, a full-service airline focused on key routes and simplify the aircraft and staff arrangements".

Internationally, it would likely close its international arm and do a deal with the government to allow Singapore Airlines to step into the breach but Virgin keep three wide-body planes and continue to run the lucrative Australia to the United States route.


https://www.theage.com.au/business/comp ... 54kw6.html
 
JQ321
Posts: 147
Joined: Mon Jan 14, 2019 12:40 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 7:44 am

CraigAnderson wrote:
Morrofinch wrote:
ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards Virgin Australia.
Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)


I honestly don't know how some 'reporters' claim to get inside information like this, it's not as if QR goes around saying this, sounds more like a bit of speculative "fake news" to me.

But if for argument's sake QR did buy into Virgin, surely that would spell an end to its membership of OneWorld? OneWorld airlines do form alliances with airlines outside the family, eg CX and NZ, but to enter the home market of a BIG OneWorld member like Qantas as the owner or backer of its sole competitor, that's got to be grounds for divorce!

Probably the end of QF in oneworld not the otherway around as Qatar owns a lot of IAG so BA and Iberia.
 
Bluebell
Posts: 3
Joined: Sun Nov 24, 2019 7:01 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 8:23 am

CraigAnderson wrote:
Morrofinch wrote:
ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards Virgin Australia.
Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)


I honestly don't know how some 'reporters' claim to get inside information like this, it's not as if QR goes around saying this, sounds more like a bit of speculative "fake news" to me.

But if for argument's sake QR did buy into Virgin, surely that would spell an end to its membership of OneWorld? OneWorld airlines do form alliances with airlines outside the family, eg CX and NZ, but to enter the home market of a BIG OneWorld member like Qantas as the owner or backer of its sole competitor, that's got to be grounds for divorce!


Well Denis Shanihan also suggested it this morning on 2gb/4bc from an inside source so there is something to it, he also indicated that Singapore Airlines are cashed up and ready to “rock and roll” (RAR)
 
SYDSpotter
Posts: 882
Joined: Tue Oct 30, 2012 9:10 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 8:40 am

CraigAnderson wrote:

So three weeks ago the Govt was so concerned about 'the Chinese' snapping up distressed Aussie companies, but now it would be okay if the Chinese snapped up a distressed Virgin Australia?

I suppose the Govt's justification would be that this keeps a second airline flying, and they could also crow about having been proven right that there was a 'market solution' out there, but a buyout by a Chinese airline or conglomerate would certainly be super-controversial, as would the Govt permitting it.


I think the Government said that there would only be increased scrutiny of any takeovers of those Australian companies who were actually profitable, so VA wouldn't fall under that category :duck:

But in all seriousness, a Chinese takeover of an airline is going to be significantly less controversial than say a Chinese takeover of a manufacturer or those companies that own Australian property. The fear (rightly or wrongly) is that a Chinese takeover of a manufacturer would mean those manufactured goods (e.g. baby milk formulation) would be diverted entirely for export. Or in the case of Australian property (infrastructure assets, property, ports etc), the argument is that Chinese companies are buying up at assets that don't reflect true value.

But in the case of VA, they are a service provider (i.e. fly people from place A to place B), this is not something you can 'export' per se and even if the company decided to send all of VA's planes to China, those planes can easily be replaced, whereas it is difficult to replace a gas pipeline for example.

In the longer term, a hypothetical Chinese takeover of VA which results in prolonged price war that results in a severely weakened QF would then start be to be controversial, because there would be an argument that QF provides a strategic civilian airlift capability in any times of crisis (e.g. COVID 19 flights), whereas there would be an argument made that a Chinese owned airline would be a less reliable source.

Edit- One of the complications of a full takeover of VA is that domestic operations are fair game, but if a foreign company wanted to acquire VA with the hope of starting international operations, then they'd need to comply with the requirement to have at least 50% of the international business being Australian owned. This could only be done if they left the current opaque VA International structure as is, but hard to know how that would look like given the initial VA International structure is complex at best.
319_320_321_332_333_359_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
User avatar
SCFlyer
Posts: 576
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 9:00 am

Bluebell wrote:
CraigAnderson wrote:
Morrofinch wrote:
ABC Radio ran a segment on VA this morning with Will Horton being interviewed. They were saying that apparently Etihad and Singapore have come to a mutual agreement that neither will make any sort of move towards Virgin Australia.
Also said that Akbar Al Baker of Qatar Airways has expressed interest in a full takeover of VA. (I would imagine this would be as a way to increase rights into AUS and annoy QF)


I honestly don't know how some 'reporters' claim to get inside information like this, it's not as if QR goes around saying this, sounds more like a bit of speculative "fake news" to me.

But if for argument's sake QR did buy into Virgin, surely that would spell an end to its membership of OneWorld? OneWorld airlines do form alliances with airlines outside the family, eg CX and NZ, but to enter the home market of a BIG OneWorld member like Qantas as the owner or backer of its sole competitor, that's got to be grounds for divorce!


Well Denis Shanihan also suggested it this morning on 2gb/4bc from an inside source so there is something to it, he also indicated that Singapore Airlines are cashed up and ready to “rock and roll” (RAR)


SQ has a technical "Government Bailout".
SIA raised $14B from their state owned parent company Tesamek. They also have a $6B loan from the Singaporean banks to ride out the current crisis

Saying that, SQ is a "Rudd" in regards to the VA topic. There's an annual "SQ to take over VA" article at least once every year, which of course the "SQ takeover" news article fizzles out as "fake news" as always.
 
User avatar
a36001
Posts: 355
Joined: Sun Sep 09, 2012 2:47 am

Re: Australian Aviation Thread - April 2020

Sat Apr 18, 2020 9:04 am

SQ22 wrote:
May I remind you to keep politics out of this thread? If you are interested in discussing any specific subject with respect to politics, feel free to open a thread in Non-Aviation forum. Thanks.


Sorry but how is this possible when the very airline this thread is basically about has asked the federal government for money and now a state government has come up with a plan to help the said airline. We might as well stop the thread here and discuss daffodils!

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos