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Opus99
Posts: 977
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 2:32 pm

VS11 wrote:
Delta CEO was just on CNBC and he said: We cannot invest more into Virgin Atlantic but there is a need for Virgin Atlantic in the UK and that Virgin Atlantic will emerge from this process even if they have to go through administration.

That’s fair enough but with administration (just as a side note) I’m getting confused when people say things like an airline goes through administration but will come out a very different airline...do they mean significantly smaller or?
 
JibberJim
Posts: 152
Joined: Tue Nov 08, 2016 1:33 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 2:41 pm

Opus99 wrote:
VS11 wrote:
Delta CEO was just on CNBC and he said: We cannot invest more into Virgin Atlantic but there is a need for Virgin Atlantic in the UK and that Virgin Atlantic will emerge from this process even if they have to go through administration.

That’s fair enough but with administration (just as a side note) I’m getting confused when people say things like an airline goes through administration but will come out a very different airline...do they mean significantly smaller or?


If they can't invest more, a through administration Virgin will no longer have any Delta ownership, and given the most profitable bits of VS are leisure travel, it will likely therefore have little or no relationship with Delta at all. Surprised the Delta CEO even bothering to talk about it.
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 2:42 pm

Opus99 wrote:
VS11 wrote:
Delta CEO was just on CNBC and he said: We cannot invest more into Virgin Atlantic but there is a need for Virgin Atlantic in the UK and that Virgin Atlantic will emerge from this process even if they have to go through administration.

That’s fair enough but with administration (just as a side note) I’m getting confused when people say things like an airline goes through administration but will come out a very different airline...do they mean significantly smaller or?


Administration in England and Wales rarely results in survival - it is effectively bankruptcy.
The rules placed on the liquidators are pretty destructive and about recovery of debt , settlement of tax and administrator fees and sod every one else.

Its been said before something a kin to Chapter 11 is needed in England and Wales !

Any sale as a going concern won’t be Virgin Atlantic afterwards
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 3:08 pm

SueD wrote:
Opus99 wrote:
VS11 wrote:
Delta CEO was just on CNBC and he said: We cannot invest more into Virgin Atlantic but there is a need for Virgin Atlantic in the UK and that Virgin Atlantic will emerge from this process even if they have to go through administration.

That’s fair enough but with administration (just as a side note) I’m getting confused when people say things like an airline goes through administration but will come out a very different airline...do they mean significantly smaller or?


Administration in England and Wales rarely results in survival - it is effectively bankruptcy.
The rules placed on the liquidators are pretty destructive and about recovery of debt , settlement of tax and administrator fees and sod every one else.

Its been said before something a kin to Chapter 11 is needed in England and Wales !

Any sale as a going concern won’t be Virgin Atlantic afterwards


To be more accurate, he said the Virgin brand, not Virgin Atlantic - so I guess there could be a new Virgin-branded airline?
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 3:36 pm

That would be down the the beardy one and Virgin Group as co owners of the brand
 
Westerwaelder
Posts: 240
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 4:53 pm

VS11 wrote:
Delta CEO was just on CNBC and he said: We cannot invest more into Virgin Atlantic but there is a need for Virgin Atlantic in the UK and that Virgin Atlantic will emerge from this process even if they have to go through administration.


He would say that. What exactly is the need for Virgin Atlantic in the UK? Other than of course feeding the Delta network in the US? Delta has owned a share of VS for a while now - have they failed to properly capitalise the airline in better times? Now of course their hands are tight. There have been plenty of opportunities to strengthen VS when Delta made $ billions every year.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 6:36 pm

Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.
 
Dmoney
Posts: 134
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Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 6:58 pm

I've facility requests on my desk from lots of businesses. Some will get finance and some won't. I don't have to do any DD to know I'd never give VS additional debt facilities, so why would the government?

Why do you lot all hate unions and the working man but want to give a bailout to rich capitalists?

It wasn't a profitable business going into the crisis, it goes under now. That's capitalism, get over it. Creative destruction. VS isn't profitable, it's the end of the QE road. Get over it.
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 7:33 pm

Flybe was of more importance to the U.K. economy than VS - VS is essentially small boutique airline with a massive marketing budget . It doesn’t do anything that other airlines can’t do . The U.K. tax payer owes it nothing
 
Detroit313
Posts: 544
Joined: Thu Dec 14, 2017 2:56 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 7:36 pm

VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


How are United and Delta JVs with Lufthansa, Air France and KLM which OWN Munich, Frankfurt, Paris and Amsterdam OK but a JV between AA and BA is not OK? Explain please.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 7:51 pm

Detroit313 wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


How are United and Delta JVs with Lufthansa, Air France and KLM which OWN Munich, Frankfurt, Paris and Amsterdam OK but a JV between AA and BA is not OK? Explain please.


It is about the market size and the market share of the relevant parties, and access to the market. AA/BA were already quite dominant in TATL to London. Remove one participant and then AA/BA market share becomes even bigger.
 
Detroit313
Posts: 544
Joined: Thu Dec 14, 2017 2:56 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 7:57 pm

VS11 wrote:
Detroit313 wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


How are United and Delta JVs with Lufthansa, Air France and KLM which OWN Munich, Frankfurt, Paris and Amsterdam OK but a JV between AA and BA is not OK? Explain please.


It is about the market size and the market share of the relevant parties, and access to the market. AA/BA were already quite dominant in TATL to London. Remove one participant and then AA/BA market share becomes even bigger.


And how is Delta with Air France and KLM not dominant when it comes to US - Paris and US - Amsterdam?

Or United/Lufthansa when it comes to US - Munich and US - Frankfurt?
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:01 pm

In the video he is very deliberate in the way he says they need the Virgin brand (rather than saying Virgin Atlantic).

This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.

There is no need for Virgin Atlantic to be a British airline, most of the routes are to the US. They could easily be operated by a wholly owned US subsidiary with Virgin branding and Branson getting a royalty. Even non US routes like HKG and JNB probably have traffic rights to be served through London.

If they have the slots and the brand rights that's all they need.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:16 pm

Detroit313 wrote:
VS11 wrote:
Detroit313 wrote:

How are United and Delta JVs with Lufthansa, Air France and KLM which OWN Munich, Frankfurt, Paris and Amsterdam OK but a JV between AA and BA is not OK? Explain please.


It is about the market size and the market share of the relevant parties, and access to the market. AA/BA were already quite dominant in TATL to London. Remove one participant and then AA/BA market share becomes even bigger.


And how is Delta with Air France and KLM not dominant when it comes to US - Paris and US - Amsterdam?

Or United/Lufthansa when it comes to US - Munich and US - Frankfurt?


Pull out the schedules and capacity before the virus situation and calculate market share - I don't know what the numbers were.
 
onwFan
Posts: 437
Joined: Wed Feb 03, 2016 4:02 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:19 pm

VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.

The same way UA/LH JV between Germany-US should have been in danger when AB collapsed (wait, when AB was swallowed by LH)? Denying an ATI for BA will be the best way of ensuring that many US secondary cities lose their only hope of a resumption of service to Europe post covid - London.
 
fcogafa
Posts: 1273
Joined: Fri May 16, 2008 4:37 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:19 pm

How much did Delta pay for their 49%. Would they lose a lot if VIR folded?
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:24 pm

3AWM wrote:
In the video he is very deliberate in the way he says they need the Virgin brand (rather than saying Virgin Atlantic).

This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.

There is no need for Virgin Atlantic to be a British airline, most of the routes are to the US. They could easily be operated by a wholly owned US subsidiary with Virgin branding and Branson getting a royalty. Even non US routes like HKG and JNB probably have traffic rights to be served through London.

If they have the slots and the brand rights that's all they need.


That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:29 pm

VS11 wrote:

That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


a) why not?
b) why would that matter to Delta buying Virgin's assets out of administration?
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:31 pm

onwFan wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.

The same way UA/LH JV between Germany-US should have been in danger when AB collapsed (wait, when AB was swallowed by LH)? Denying an ATI for BA will be the best way of ensuring that many US secondary cities lose their only hope of a resumption of service to Europe post covid - London.


There are other dimensions to this, and I don't claim to know all of the details. BUT, some of these JV's were under the EU-US Open Skies, and the UK is no longer part of the EU, and last time we heard, they were planning to completely sever ties with EASA so I would not draw any analogies because the legal framework would be different. The UK-US market should be looked at on its own as the stated intention of the UK Government is for it to be a separate market.
 
RexBanner
Posts: 46
Joined: Sun Nov 04, 2007 11:37 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:34 pm

3AWM wrote:
VS11 wrote:

That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


a) why not?
b) why would that matter to Delta buying Virgin's assets out of administration?


Quite simply because any British base is going to have to be crewed by British people.
 
onwFan
Posts: 437
Joined: Wed Feb 03, 2016 4:02 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:35 pm

VS11 wrote:
onwFan wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.

The same way UA/LH JV between Germany-US should have been in danger when AB collapsed (wait, when AB was swallowed by LH)? Denying an ATI for BA will be the best way of ensuring that many US secondary cities lose their only hope of a resumption of service to Europe post covid - London.


There are other dimensions to this, and I don't claim to know all of the details. BUT, some of these JV's were under the EU-US Open Skies, and the UK is no longer part of the EU, and last time we heard, they were planning to completely sever ties with EASA so I would not draw any analogies because the legal framework would be different. The UK-US market should be looked at on its own as the stated intention of the UK Government is for it to be a separate market.

For technicality, let me correct that to ‘transatlantic hub in geographical Europe’ instead of Europe then.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:36 pm

3AWM wrote:
VS11 wrote:

That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


a) why not?
b) why would that matter to Delta buying Virgin's assets out of administration?


a) Can an American carrier hire British flight attendants?
b) The crews are an essential part of the service and service delivery.
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:39 pm

Yes they can. In my experience it's quite common for airlines to have some locally based crew members. They could also have crew bases in the US where the flghts originate from.
 
User avatar
chepos
Posts: 7273
Joined: Sat Dec 02, 2000 9:40 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 8:59 pm

VS11 wrote:
3AWM wrote:
VS11 wrote:

That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


a) why not?
b) why would that matter to Delta buying Virgin's assets out of administration?


a) Can an American carrier hire British flight attendants?
b) The crews are an essential part of the service and service delivery.

UA has a LHR base and they have some British crews who fly out of that base. Not sure the way exact demographics of the base are but I know of a Brit that flies for UA out of LHR.


Sent from my iPhone using Tapatalk
Fly the Flag!!!!
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 9:16 pm

VS11 wrote:
3AWM wrote:
In the video he is very deliberate in the way he says they need the Virgin brand (rather than saying Virgin Atlantic).

This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.

There is no need for Virgin Atlantic to be a British airline, most of the routes are to the US. They could easily be operated by a wholly owned US subsidiary with Virgin branding and Branson getting a royalty. Even non US routes like HKG and JNB probably have traffic rights to be served through London.

If they have the slots and the brand rights that's all they need.


That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


Of course they will. Lots of airlines hired UK based crew to operate from LHR. Currently or in the past, airlines including UA, Qantas, Cathay Pacific, JAL, ANA among others have had crew based and employed in the UK.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 9:30 pm

seansasLCY wrote:
VS11 wrote:
3AWM wrote:
In the video he is very deliberate in the way he says they need the Virgin brand (rather than saying Virgin Atlantic).

This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.

There is no need for Virgin Atlantic to be a British airline, most of the routes are to the US. They could easily be operated by a wholly owned US subsidiary with Virgin branding and Branson getting a royalty. Even non US routes like HKG and JNB probably have traffic rights to be served through London.

If they have the slots and the brand rights that's all they need.


That's very creative but it won't be able to hire the current British crew members, and in a way it is a big deal.


Of course they will. Lots of airlines hired UK based crew to operate from LHR. Currently or in the past, airlines including UA, Qantas, Cathay Pacific, JAL, ANA among others have had crew based and employed in the UK.


Can a US carrier hire all of the FAs for the UK flights to be from the UK? Great, if they can. I thought some union and/or legal restrictions existed.
 
Byrdluvs747
Posts: 2540
Joined: Thu Jul 15, 2004 5:25 am

Re: Virgin Atlantic needs government support?

Wed Apr 22, 2020 11:41 pm

3AWM wrote:

b) why would that matter to Delta buying Virgin's assets out of administration?


If DL has money to buy VS assets then they shouldn't be asking for or receiving taxpayer money.
The 747: The hands who designed it were guided by god.
 
Nicknuzzii
Posts: 1153
Joined: Sat Sep 15, 2018 5:57 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 1:49 am

Anyone have an update on this?
 
Opus99
Posts: 977
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 3:04 am

Just thinking back on how VS is claimed to offer competition as one of the reasons it should stay. This airline couldn’t even make LHR-DXB work. That is the second largest long haul destination from Heathrow all though it’s probably due to connections onto the Far East. BA has about 3 a day. Like DXB is a popular destination on its own how they weren’t even able to make THAT work Because it wasn’t economically viable. It was probably too competitive for them. Of course.
 
Boeing74741R
Posts: 1400
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 8:03 am

Opus99 wrote:
Just thinking back on how VS is claimed to offer competition as one of the reasons it should stay. This airline couldn’t even make LHR-DXB work. That is the second largest long haul destination from Heathrow all though it’s probably due to connections onto the Far East. BA has about 3 a day. Like DXB is a popular destination on its own how they weren’t even able to make THAT work Because it wasn’t economically viable. It was probably too competitive for them. Of course.


Maybe it was felt there were more lucrative uses of that slot and aircraft than DXB? When there's up to 9 flights a day from LHR (6 with EK on A380's, plus up to 3 with BA), plus a further 3 daily from LGW on A380's and up to 2 flights from STN, it's a very well served route, though as you say the majority of that are likely to be connecting onwards. I think I read on here a while ago that VS should fly to SIN, but again I think that route is well served from London as it is and it would have made more sense if SQ still had its stake.

The competition claim is very valid, though I don't think it should extend to every single route out there.

3AWM wrote:
This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.


True. I suspect DL may not have launched the various routes to MAN, GLA and EDI over the last 5 years if they were going it alone, or at least not within the same scale and timeframe. I flew DL MAN-JFK in 2015 and I will happily admit that one reason I chose DL was the fact I could get VS Flying Club miles.

Dmoney wrote:
Why do you lot all hate unions and the working man but want to give a bailout to rich capitalists?


Where have people been bashing unions in this thread? Also, how is a loan a bailout?

The working man claim is valid though seeing as some people on this thread are quite content with letting VS go under along with jobs being lost both directly and within the supply chain.
 
Boeing74741R
Posts: 1400
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 8:05 am

Nicknuzzii wrote:
Anyone have an update on this?


There doesn't seem to be any further news since the government asked VS to redo their plans and SRB's statement at the start of the week. Hopefully something can be worked out soon.
 
Andy33
Posts: 2567
Joined: Tue Sep 15, 2009 9:30 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 8:21 am

Byrdluvs747 wrote:
3AWM wrote:

b) why would that matter to Delta buying Virgin's assets out of administration?


If DL has money to buy VS assets then they shouldn't be asking for or receiving taxpayer money.


What assets are these? Planes that aren't leased have been used as collateral for eartlier commercial loans, LHR, LGW and MAN slots have been used as collateral too. The earlier loans would first need to be paid off before these assets even come under the effective control of the administrator. It would be an interesting accounting challenge to do this without having to pay off all the other creditors.
 
Bhoy
Posts: 548
Joined: Tue Apr 18, 2006 1:50 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 8:50 am

Boeing74741R wrote:
3AWM wrote:
This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.


True. I suspect DL may not have launched the various routes to MAN, GLA and EDI over the last 5 years if they were going it alone, or at least not within the same scale and timeframe. I flew DL MAN-JFK in 2015 and I will happily admit that one reason I chose DL was the fact I could get VS Flying Club miles.


That might work in London and Manchester with VS bases and an incentive to join Flying Club, but how many Flying Club members do you think there are in Scotland, with a single seasonal route from Glasgow to Orlando? (DL flights were probably driven by ability to collect Miles with Flying Blue here due to the amount of people connecting through Amsterdam for work anyway)
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 9:42 am

onwFan wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.

The same way UA/LH JV between Germany-US should have been in danger when AB collapsed (wait, when AB was swallowed by LH)? Denying an ATI for BA will be the best way of ensuring that many US secondary cities lose their only hope of a resumption of service to Europe post covid - London.


So US some town becomes like UK/EU small towns devoid of direct access and the Mega Hubs prevail - This is exactly what the US three want. !
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 9:52 am

Opus99 wrote:
Just thinking back on how VS is claimed to offer competition as one of the reasons it should stay. This airline couldn’t even make LHR-DXB work. That is the second largest long haul destination from Heathrow all though it’s probably due to connections onto the Far East. BA has about 3 a day. Like DXB is a popular destination on its own how they weren’t even able to make THAT work Because it wasn’t economically viable. It was probably too competitive for them. Of course.


Given the immense capacity from the UK under normal circumstance by Emirate 19 day how would ever compete -Daft example
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 9:57 am

Bhoy wrote:
Boeing74741R wrote:
3AWM wrote:
This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.


True. I suspect DL may not have launched the various routes to MAN, GLA and EDI over the last 5 years if they were going it alone, or at least not within the same scale and timeframe. I flew DL MAN-JFK in 2015 and I will happily admit that one reason I chose DL was the fact I could get VS Flying Club miles.


That might work in London and Manchester with VS bases and an incentive to join Flying Club, but how many Flying Club members do you think there are in Scotland, with a single seasonal route from Glasgow to Orlando? (DL flights were probably driven by ability to collect Miles with Flying Blue here due to the amount of people connecting through Amsterdam for work anyway)


Delta serve JFK from both Edinburgh and Glasgow with Virgin codeshare under normal circumstances .
 
Boeing74741R
Posts: 1400
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 10:06 am

Bhoy wrote:
Boeing74741R wrote:
3AWM wrote:
This is really correct as they do need the Virgin brand and it's assets like the FFer comminity to sell tickets to the UK market.


True. I suspect DL may not have launched the various routes to MAN, GLA and EDI over the last 5 years if they were going it alone, or at least not within the same scale and timeframe. I flew DL MAN-JFK in 2015 and I will happily admit that one reason I chose DL was the fact I could get VS Flying Club miles.


That might work in London and Manchester with VS bases and an incentive to join Flying Club, but how many Flying Club members do you think there are in Scotland, with a single seasonal route from Glasgow to Orlando? (DL flights were probably driven by ability to collect Miles with Flying Blue here due to the amount of people connecting through Amsterdam for work anyway)


No idea, but I only mentioned the ability to get FC miles as an example. The codesharing VS do on the Scottish DL flights may also help whether people are in FC or not as they can be booked via the VS website, plus there will always be some who simply see the Virgin Atlantic name or code against a flight and book on it whether it's on VS metal or not (brand awareness). No doubt there are others who book the way they do by seeing the BA name and code, KLM name and code etc. against a flight operated by somebody else.
 
Opus99
Posts: 977
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 10:18 am

SueD wrote:
Opus99 wrote:
Just thinking back on how VS is claimed to offer competition as one of the reasons it should stay. This airline couldn’t even make LHR-DXB work. That is the second largest long haul destination from Heathrow all though it’s probably due to connections onto the Far East. BA has about 3 a day. Like DXB is a popular destination on its own how they weren’t even able to make THAT work Because it wasn’t economically viable. It was probably too competitive for them. Of course.


Given the immense capacity from the UK under normal circumstance by Emirate 19 day how would ever compete -Daft example

BA does though? They still have 3 a day out of LHR. But of course how can they compete. They don’t. Period. You’re making my point for me
 
SueD
Posts: 260
Joined: Sat Jul 27, 2019 11:35 am

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 11:01 am

Opus99 wrote:
SueD wrote:
Opus99 wrote:
Just thinking back on how VS is claimed to offer competition as one of the reasons it should stay. This airline couldn’t even make LHR-DXB work. That is the second largest long haul destination from Heathrow all though it’s probably due to connections onto the Far East. BA has about 3 a day. Like DXB is a popular destination on its own how they weren’t even able to make THAT work Because it wasn’t economically viable. It was probably too competitive for them. Of course.


Given the immense capacity from the UK under normal circumstance by Emirate 19 day how would ever compete -Daft example

BA does though? They still have 3 a day out of LHR. But of course how can they compete. They don’t. Period. You’re making my point for me


BA/AA has a massive TALC connecting network , reasonable cargo uplift and quite few point collectors with access to the rather plush apartment blocks and not forgetting BA World Holidays trade -they do fine .
 
User avatar
Group51
Posts: 42
Joined: Sat Nov 24, 2007 11:10 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 11:10 am

Looks to me, if the owner only wants to offer his hurricane prone island as collateral and there really is nothing left after all the wealth extractions, then that’s just business.

Government should act (and this is Europe where governments intervene) to help the staff. So maybe an publicly owned administration zombie company owning the slots and planes (to sell off) and employ the staff for a year.

I’m sure there will always be room in the market for a Virgin like company that could buy the slots and rehire the staff.

Question to me is, if it isn’t strategic does it matter who owns the airline?
Last edited by Group51 on Thu Apr 23, 2020 11:14 am, edited 2 times in total.
 
Bhoy
Posts: 548
Joined: Tue Apr 18, 2006 1:50 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 11:10 am

SueD wrote:
Bhoy wrote:
Boeing74741R wrote:


True. I suspect DL may not have launched the various routes to MAN, GLA and EDI over the last 5 years if they were going it alone, or at least not within the same scale and timeframe. I flew DL MAN-JFK in 2015 and I will happily admit that one reason I chose DL was the fact I could get VS Flying Club miles.


That might work in London and Manchester with VS bases and an incentive to join Flying Club, but how many Flying Club members do you think there are in Scotland, with a single seasonal route from Glasgow to Orlando? (DL flights were probably driven by ability to collect Miles with Flying Blue here due to the amount of people connecting through Amsterdam for work anyway)


Delta serve JFK from both Edinburgh and Glasgow with Virgin codeshare under normal circumstances .

Yeah I get that (DL also seasonally serve BOS from EDI incidentally), but my point is that DL couldn’t have opened those routes to ‘tap into’ the pre existing Flying Club Membership in that area of the UK - again, many business travellers are used to transferring at AMS due to the amount of KLM feed, so would have been members of Flying Blue. Therefore I’d suggest that DL opening various routes from EDI and GLA were more to tap into those travellers loyal to Skyteam miles than Flying Club miles.
 
tobsw
Posts: 136
Joined: Mon Jul 11, 2011 2:29 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 12:10 pm

Virgin Atlantic Owes Delta $200 Million, Won’t Receive Cash From U.S. Shareholder

"But Delta will not be providing Virgin Atlantic any financial assistance. It is Delta expecting cash: Virgin has to pay Delta $200 million related to their joint-venture, the airlines agreed earlier this year."

forbes.com/sites/willhorton1/2020/04/23/virgin-atlantic-owes-delta-200-million-wont-receive-cash-from-us-shareholder/#db7bf5930d2a

Interesting...
 
GDB
Posts: 13757
Joined: Wed May 23, 2001 6:25 pm

Re: Virgin Atlantic needs government support?

Thu Apr 23, 2020 12:52 pm

Group51 wrote:
Looks to me, if the owner only wants to offer his hurricane prone island as collateral and there really is nothing left after all the wealth extractions, then that’s just business.

Government should act (and this is Europe where governments intervene) to help the staff. So maybe an publicly owned administration zombie company owning the slots and planes (to sell off) and employ the staff for a year.

I’m sure there will always be room in the market for a Virgin like company that could buy the slots and rehire the staff.

Question to me is, if it isn’t strategic does it matter who owns the airline?


While it's true that the current UK government have been forced by the pandemic to throw away, for now, 40 years of doctrine that did not intervene, the fact that they are very cool to say the least on helping VS, seems to point that they are not seen as important to the airline sector, moreover as some of the links posted further up suggest, that the political optics of helping an offshore billionaire is not something they are keen to be doing right now.
Not that they usually are hostile to offshore, tax dodging billionaires, they largely fund the governing party, the papers which give support to them are owned by the same. (IMHO 'Brexit' is and has always been about pleasing them).
We live in strange times.
 
TC957
Posts: 3813
Joined: Wed May 23, 2012 1:12 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 7:51 am

Maybe the UK Govt can bail out VS only to the amount of tax SRB has paid in over the last, say, 5 years.
 
GDB
Posts: 13757
Joined: Wed May 23, 2001 6:25 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 8:26 am

TC957 wrote:
Maybe the UK Govt can bail out VS only to the amount of tax SRB has paid in over the last, say, 5 years.


Nah. The whole 14 years. Plus the money the NHS might have wasted in fighting his lawsuits.
 
BA777FO
Posts: 577
Joined: Sun Apr 22, 2018 2:58 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 8:59 am

GDB wrote:
TC957 wrote:
Maybe the UK Govt can bail out VS only to the amount of tax SRB has paid in over the last, say, 5 years.


Nah. The whole 14 years. Plus the money the NHS might have wasted in fighting his lawsuits.


Virgin Care sued 6 CCGs including NHS England and Surrey County Council over irregularities and illegalities in its procurement process. The matter was settled out of court and Virgin donated all of that money back into the NHS. It wasn't motivated by profit but ensuring future procurement was conducted legally.

As for Branson's personal tax payments - how about the hundreds of millions in income tax, National Insurance, VAT etc. that Virgin employees have paid over the years?
 
JobsaGoodun
Posts: 112
Joined: Tue Nov 16, 2004 6:35 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 9:18 am

Ignoring all the dirt being raked up, true or otherwise, about his personal wealth or litigation involving the NHS (as this really isn't important when making a clinical decision in respect of funding,the decision for Government should be relatively straightforward.

Whether funding comes from the Government or a bank, if money is provided on commercial terms there are surely only two key aspects of importance.
1) What can the funds be secured against in order to protect the lender?
2) What is the ability for the borrower to repay the funds?

If Virgin has sufficient assets, owned aircraft, engines, aircraft spares, office space etc that they own that can be used as collateral for any loan, then I see no reason for the Government not to offer money. It's my personal opinion that any monies received however should be match funded by equity raised by the current owners. So either Richard and Delta pony up a few hundred million or they put the business into administration. They have to have skin in the game and can't expect the UK taxpayer to take all the risk.
 
Opus99
Posts: 977
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 9:37 am

JobsaGoodun wrote:
Ignoring all the dirt being raked up, true or otherwise, about his personal wealth or litigation involving the NHS (as this really isn't important when making a clinical decision in respect of funding,the decision for Government should be relatively straightforward.

Whether funding comes from the Government or a bank, if money is provided on commercial terms there are surely only two key aspects of importance.
1) What can the funds be secured against in order to protect the lender?
2) What is the ability for the borrower to repay the funds?

If Virgin has sufficient assets, owned aircraft, engines, aircraft spares, office space etc that they own that can be used as collateral for any loan, then I see no reason for the Government not to offer money. It's my personal opinion that any monies received however should be match funded by equity raised by the current owners. So either Richard and Delta pony up a few hundred million or they put the business into administration. They have to have skin in the game and can't expect the UK taxpayer to take all the risk.

I really agree with this. like i said i have no issues at all with SRB. but this is a business decision and honestly to answer those questions in my opinion they do not have free nor sufficient assets that the debt can be secured against and their EBITDA (net earnings) to debt ratio is already about 5.8x bear in mind BA is at 1.4, AF-KLM is at about 1.5 so honestly, virgin cannot pay back this loan and they know it so they have to beg. there's zero commercial footing to ask for a loan that size. the loan will take their debt up to about 2 billion pouds while still operating at a loss
 
JobsaGoodun
Posts: 112
Joined: Tue Nov 16, 2004 6:35 pm

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 10:18 am

Take Flybe as the last major casualty in the UK.

Flybe failed because it's shareholders (which included VS) were either unable or unwilling, to inject more funds into the business. In turning to Westminster for help, the Government chose not to lend with reports at the time that there was nothing to anchor the loans against. Flybe had already sold off all its available assets just to get to as far as it did.

It really shouldn't (and I doubt it will) be any different for VS. DL have already stated that they are either unable, or unwilling, to inject more funds into the business so it's down to SRB.

First and foremost, he's a businessman and a shrewd one at that - ask any previous Flybe shareholder....but I'm not sure which side of the fence he'll fall. It's pretty clear that VS is the baby of the Virgin Group (demonstrated by him choosing not to cede control via the recent AF/KLM deal), however if he sees more long term value in putting the business into administration and then establishing a phoenix from the wreckage, I wouldn't put it past him to take this route.

Much as I'd like to buy the #virginfamily guff, I'm not wholly convinced. Business is business after all.
 
umichman
Posts: 141
Joined: Sun Apr 07, 2019 2:42 am

Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 11:10 am

fcogafa wrote:
How much did Delta pay for their 49%. Would they lose a lot if VIR folded?


DL paid Singapore Airlines $360 million for the stake. Singapore originally paid Branson $965 million for it in 2000. As mentioned up thread, VS apparently owes DL $200 million if it goes under, but I doubt DL would get anything close to that. They could maybe try to get some LHR slots in lieu of cash. I doubt they would want any of their aircraft (DL has plenty of their own now parked in the desert). The stake itself would likely be considered worthless.

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