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onwFan
Posts: 434
Joined: Wed Feb 03, 2016 4:02 am

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:49 pm

seansasLCY wrote:
https://www.telegraph.co.uk/business/2020/04/25/branson-races-find-virgin-atlantic-buyer/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1587846955

According to the Telegraph:
“ Sir Richard Branson is seeking a buyer for Virgin Atlantic and has set an end-of-May deadline to save the airline from collapse after a taxpayer bailout proved beyond his reach.

The Sunday Telegraph has learnt that the pursuit of a £500m government package has been effectively shelved and that the airline is now focused on securing new private investment in the shadow of potential insolvency.”

“ Those interested in rescuing Virgin Atlantic are understood to include Lansdowne Partners, the hedge fund founded by George Osborne’s best man Peter Davies, Singapore sovereign wealth fund Temasek and Northill Capital, the fund that is backed by Italian-born Swiss Ernesto Bertarelli.”

Yeah, best time to sell an airline.
 
tphuang
Posts: 5184
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:53 pm

They have enough cash to last until end of May? That’s surprising.
 
winginit
Posts: 2851
Joined: Sat Feb 23, 2013 9:23 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 10:09 pm

tphuang wrote:
They have enough cash to last until end of May? That’s surprising.


Very surprising, but I believe it's because all employees are going without pay for eight weeks.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 10:29 pm

So since clearly any state aid is basically off the table. Will virgin get the private investment it’s looking for? Do take note administration of the airline is also on the table but of course to bring it out of administration ASAP
 
Geoff1947
Posts: 628
Joined: Thu Jun 16, 2016 11:28 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 10:57 pm

seansasLCY wrote:
https://www.telegraph.co.uk/business/2020/04/25/branson-races-find-virgin-atlantic-buyer/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1587846955

According to the Telegraph:
“ Sir Richard Branson is seeking a buyer for Virgin Atlantic and has set an end-of-May deadline to save the airline from collapse after a taxpayer bailout proved beyond his reach.

The Sunday Telegraph has learnt that the pursuit of a £500m government package has been effectively shelved and that the airline is now focused on securing new private investment in the shadow of potential insolvency.”

“ Those interested in rescuing Virgin Atlantic are understood to include Lansdowne Partners, the hedge fund founded by George Osborne’s best man Peter Davies, Singapore sovereign wealth fund Temasek and Northill Capital, the fund that is backed by Italian-born Swiss Ernesto Bertarelli.”


The vultures are circling ......
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:19 am

Great sell it to O’Leary for £500m ... Branson Cleary has no idea how to run an airline, yet another failed enterprise from Branson ...
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:28 am

DobboDobbo wrote:
Galwayman wrote:
At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .


An embarrassingly inaccurate statement...


Bransons desperate to sell it now . But of course it’s not investment level standard , it’s really just a basket case - good riddance ....
 
davidjohnson6
Posts: 851
Joined: Mon Jun 20, 2016 10:10 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:31 am

It would be a sad moment if VS collapsed. They have provided ample competition over the years to transatlantic travel, breaking up what was something close to a cartel. I don't believe there is room long term for what is a financially weak player in the market (JetBlue is a different story), but "Good riddance" is a harsh way of describing their situation
 
Arion640
Posts: 3060
Joined: Fri Mar 31, 2017 5:15 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:09 am

Temasek is the Investment arm of Singapore who i believe also own SQ. the investment will have gone full circle, except it would also be part owned by delta. As bizarre set up.
 
Arion640
Posts: 3060
Joined: Fri Mar 31, 2017 5:15 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:12 am

Galwayman wrote:
tobsw wrote:
a350lover wrote:
Virgin is the second legacy player in the UK, they are milles away from BA in terms of connectivity and I'd say the same when it comes to compare the number of Virgin employees or passengers. Before coronavirus, it was already a very challenging time for those "second players" in Europe. Now it's almost impossible to remain competitive with the current scenario, and I'd say all Governments are going to provide the industry with some indirect benefits but they won't help all airlines in the same level. I can't think of any EU country with more than just one "legacy" carrier. Is there any other example nearby?

I can think of Air Europa in Spain, which isn't exactly a legacy carrier, but still offers full-service so competes pretty much in the same league as Iberia. If IAG hand't shown interest for them before this crisis, they would be now in pretty much the same situation Virgin is.


There's a massive difference between Air Europa and Virgin Altantic. Air Europa has been consistently profitable in the last decade. Virgin Atlantic, not.


Well said .

There is no way on Earth that VS comes close to the success and importance of Air Europa- The Virgin marketing machine has a massive ego and considers it’s self way more significant and important than it is .

At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .


Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.
 
Boof02671
Posts: 2095
Joined: Sun Jul 10, 2016 12:15 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:14 am

Galwayman wrote:
Great sell it to O’Leary for £500m ... Branson Cleary has no idea how to run an airline, yet another failed enterprise from Branson ...

No one could have planned or prepared for a global pandemic
 
winginit
Posts: 2851
Joined: Sat Feb 23, 2013 9:23 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:27 am

Arion640 wrote:
Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


How is it that Delta would lose their slot influence? They'll maintain a 49% stake and board seats regardless of what happens to the other 51% (unless they're planning to sell their stake, which seems unlikely). Additionally, it's unlikely that any buyer or group of buyers would want to stir the pot with Delta.
 
umichman
Posts: 141
Joined: Sun Apr 07, 2019 2:42 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:08 am

Arion640 wrote:
Galwayman wrote:
tobsw wrote:

There's a massive difference between Air Europa and Virgin Altantic. Air Europa has been consistently profitable in the last decade. Virgin Atlantic, not.


Well said .

There is no way on Earth that VS comes close to the success and importance of Air Europa- The Virgin marketing machine has a massive ego and considers it’s self way more significant and important than it is .

At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .


Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


DL has stated that VS owes it $200 million as part of joint venture contract if they exit. Presumably, any buyer would need to make good on that. At any rate, DL has been losing more than that amount of money in a week, so it's a fairly minor concern at this point. It's hard to assess what the VS LHR slots are actually worth these days. Certainly far less than they used to be. I suspect that DL feels it's existing LHR slots will be more than sufficient for some time to come.
 
Andy33
Posts: 2567
Joined: Tue Sep 15, 2009 9:30 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 6:07 am

umichman wrote:
It's hard to assess what the VS LHR slots are actually worth these days. Certainly far less than they used to be. I suspect that DL feels it's existing LHR slots will be more than sufficient for some time to come.

As they stand the VS slots are worthless in this context because they were used some 5 years ago as collateral on a commercial loan which is still running, and so cannot be traded. If VS is sold as a going concern, and the new owner is able to pay off the loan, then the slots become available to be traded at that point. If VS defaults on the loan, the slots fall under the control of the company that made the loan, which could then sell them as it wishes. In either case Delta has little influence over the outcome.

Losers here are always going to be VS's employees and suppliers, and Delta.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 7:52 am

Wouldn't Non-EU buyers be off the table unless Delta is going to sell some of its holding due to the 49% rule?
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 8:09 am

Galwayman wrote:
DobboDobbo wrote:
Galwayman wrote:
At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .


An embarrassingly inaccurate statement...


Bransons desperate to sell it now . But of course it’s not investment level standard , it’s really just a basket case - good riddance ....


Do you realise what impact Coronavirus is having (and will continue to have) on the industry?

Name me an airline, any airline, and I’ll show you a basket case ...
 
f4f3a
Posts: 611
Joined: Thu Jul 29, 2004 4:07 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 8:22 am

They Def should get a bail out . Af is getting bln of euros so is alitalia why shouldn't virgin . They are more of a British airline than wizz air who have secured 300m . Hopefully virgin will find a buyer . I think in the long run they should do well
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 8:24 am

jomur wrote:
DobboDobbo wrote:
Opus99 wrote:
This is reaching. Nobody is accepting economic hardship. The airline has not been struggling for years even at aviations peak and you want to throw money at it now? If virgin asked you to invest in it now, would you? Please. This business is weak and everyone knows it. It was viable the government would not have sent them back after being unimpressed by their bid


If you let businesses fail because of Covid-19, you are accepting that there will be significant and painful economic hardship.

The relevant question is whether it is viable in the long run, in a non Covid world. That is what the government will be assessing, and that is what VS will have to demonstrate. The government plainly think it is viable, otherwise they would have not told them to come back.

Realistically, if any airline asked me to invest now, I wouldn’t do it unless it had state backing.


If the Government thought Virgin would make money and repay a loan they would have given them one already. Virgin hasn't ticked all the boxes so the Government said basically go and revise your plans and they want Virgin to be realistic in it's forecasts, Virgin still reckoned they could make a profit next year even now according to rumours.


I agree with this.

There are certainly challenges VS have to overcome (and today’s papers suggest that they cannot overcome them with the present ownership) but there is little reasonable doubt that the tipping point for this is Coronavirus and governments around the world telling their people not to travel...
 
JibberJim
Posts: 152
Joined: Tue Nov 08, 2016 1:33 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 8:57 am

winginit wrote:
Arion640 wrote:
Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


How is it that Delta would lose their slot influence? They'll maintain a 49% stake and board seats regardless of what happens to the other 51% (unless they're planning to sell their stake, which seems unlikely). Additionally, it's unlikely that any buyer or group of buyers would want to stir the pot with Delta.


Delta would not maintain it's stake, the business needs cash, so a new investor as well as having to buy out Branson's share (I imagine for no more than a pound) would also need to capitalise the business. There is absolutely no way any investor would capitalise the business without Delta also putting in or diluting its stake - indeed I cannot imagine any scenario where Delta's stake isn't also sold for another pound to the other investor, they might get a fraction of that 200 million owed, but even that's unlikely, probably the price of keeping a future relationship at all.

Reality is there's almost no chance of a new investment without administration, there's no reason for an investor to invest without the debt holders also taking a share of the pain and in that situation obviously Delta is gone.
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:26 am

Lol at the crocodile tears for the poor pilots. You are asking for a bailout for a billionaire. You must be high if you think people would fall for that.

It's a unprofitable non-viable airline during the boom years let alone the lean next 3 years. There might be a smaller viable company inside but you'd need to let it go under and see if anyone wants to take a pint. There is no way it survives with its current debt load over the next three years.

Equity gets whiped out, junior and unsecured aswell and you try work something out with senior debt, maybe. You lose the leg to maybe save the patient. Clearly the brand means something to you lot.
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:34 am

People need to understand the concept of what a capital stack is, what's the difference between debt and equity and how secured lending works. Equity is a residual claim, you get what's left after everyone else has had their bite. If there isn't enough food for everyone then equity goes hungry first and you work your way down the stack.
 
Arion640
Posts: 3060
Joined: Fri Mar 31, 2017 5:15 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:44 am

winginit wrote:
Arion640 wrote:
Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


How is it that Delta would lose their slot influence? They'll maintain a 49% stake and board seats regardless of what happens to the other 51% (unless they're planning to sell their stake, which seems unlikely). Additionally, it's unlikely that any buyer or group of buyers would want to stir the pot with Delta.


This was Said in the scenario that Virgin goes bankrupt and ceases to exist. Currently Delta and Virgin swop slots at Heathrow to suite schedules I believe. If Virgin goes under there’s all those slot pairs delta can no longer influence at LHR, as they’d just go back into the slot pool.

In the event Virgin survives, Deltas stake has the potential to be diluted.
 
sevenheavy
Posts: 969
Joined: Tue Mar 23, 2004 3:30 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:47 am

Opus99 wrote:
https://www.bloomberg.com/news/articles/2020-04-25/richard-branson-seeking-buyer-for-virgin-atlantic-telegraph

Well would you look at that. If by the end of May they don’t secure something. Virgin is done...according to Branson


Nowhere in the article does it say that VS are ‘done’ without a buyer by the end of May. What it actually says is that the end of May is simply the deadline for private investment talks.

Regardless, Reuters has issued a clarification from VS which says there is no fixed deadline, and also that government talks are still ongoing.

https://uk.reuters.com/article/us-healt ... KKCN22801J

Given that any government assistance is an absolute last resort (as previously reported) it would make sense that the exploration of private investment is part of that process.

winginit wrote:
tphuang wrote:
They have enough cash to last until end of May? That’s surprising.


Very surprising, but I believe it's because all employees are going without pay for eight weeks.


Again, not true. The majority of VS staff are on the government’s furlough scheme. Just the same as BA, EZY, etc. Those that are still required to work are being paid to do so.
So long 701, it was nice knowing you.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:53 am

Dmoney wrote:
It's a unprofitable non-viable airline during the boom years let alone the lean next 3 years.


Profitability has been up and down, the bit about viability is only true because of Coronavirus.

If you apply that criteria then the MEB3, US3, EU3, IAG (and any other airline you care to mention) are almost certainly also ”non-viable” without state aid.
 
User avatar
vhtje
Posts: 1198
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 10:45 am

bennett123 wrote:
Not disputing what Mr Farajallah says, but let us not forget that he is not an impartial witness.


That was my thought, too, and I was going to add that to my post. But, actually, he is - he left FlyBe in 2018, long before VS got involved with them.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 11:20 am

sevenheavy wrote:
Opus99 wrote:
https://www.bloomberg.com/news/articles/2020-04-25/richard-branson-seeking-buyer-for-virgin-atlantic-telegraph

Well would you look at that. If by the end of May they don’t secure something. Virgin is done...according to Branson


Nowhere in the article does it say that VS are ‘done’ without a buyer by the end of May. What it actually says is that the end of May is simply the deadline for private investment talks.

Regardless, Reuters has issued a clarification from VS which says there is no fixed deadline, and also that government talks are still ongoing.

https://uk.reuters.com/article/us-healt ... KKCN22801J

Given that any government assistance is an absolute last resort (as previously reported) it would make sense that the exploration of private investment is part of that process.


If the government wanted to give virgin that money. They would’ve given them. Let’s be real. Apologies because the article does not say that anywhere you’re right.

VS has said a lot of confusing things in this time, like they said government talks were progressing but the next day they were sent back by the government. Then VS says without government backing it will fail now they’re up for sale. I mean...
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 11:23 am

Over recent years Virgin Atlantic has made money for it's shareholders but not profit to the Ltd co.

SRB has made money through royalty on ticket sales which has probably gone to a BVI holding co.

Delta have made profits through ticket sales on it's flights.

Under normal circumstances this would continue. Right now there are no ticket sales just $millions in lease costs which is unsustainable. It needs considerable investment from somewhere with limited prospects for return.

Ed Bastion has indicated there is value in the brand, which is true. Virgin Ltd could go into administration and SRB could give the brand rights to another airline.

The mention of Temasek is interesting as the current open skies would allow a Singapore based airline to operate UK-US flights.

Not saying this will happen but it says to Delta they aren't the only game in town. The value of Virgin isn't just in the brand but the IP that is tied to the brand. The thing about that structuring it that way is it's really flexible.

For eg you could split the current business in 2 and have Virgin Atlantic serving the US and Virgin Asia flying to India, Singapore & Hong Kong.

No airline is viable right now but these could be viable structures in the future and FFers wouldn't be able to tell the difference.
 
Boof02671
Posts: 2095
Joined: Sun Jul 10, 2016 12:15 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 11:45 am

JibberJim wrote:
winginit wrote:
Arion640 wrote:
Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


How is it that Delta would lose their slot influence? They'll maintain a 49% stake and board seats regardless of what happens to the other 51% (unless they're planning to sell their stake, which seems unlikely). Additionally, it's unlikely that any buyer or group of buyers would want to stir the pot with Delta.


Delta would not maintain it's stake, the business needs cash, so a new investor as well as having to buy out Branson's share (I imagine for no more than a pound) would also need to capitalise the business. There is absolutely no way any investor would capitalise the business without Delta also putting in or diluting its stake - indeed I cannot imagine any scenario where Delta's stake isn't also sold for another pound to the other investor, they might get a fraction of that 200 million owed, but even that's unlikely, probably the price of keeping a future relationship at all.

Reality is there's almost no chance of a new investment without administration, there's no reason for an investor to invest without the debt holders also taking a share of the pain and in that situation obviously Delta is gone.

Delta is losing $50 million a day. They are taking out loans and getting a federal bailout, asking employees to take leaves of absences and cut ground workers hours by 25%. They can’t bailout nor invest more money into Virgin. The US government and tax payers won’t allow it.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:25 pm

f4f3a wrote:
They Def should get a bail out . Af is getting bln of euros so is alitalia why shouldn't virgin . They are more of a British airline than wizz air who have secured 300m . Hopefully virgin will find a buyer . I think in the long run they should do well


Just to be clear the UK Governmemt IS NOT bailing out any airline, it is lending them money on commercial terms which the other airlines you mentioned happen to be able to meet.

As to the Virgin brand, I think it will be tainted if associated with another airline in the future with 2 high profile collapses if VS goes under.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:34 pm

3AWM wrote:
Over recent years Virgin Atlantic has made money for it's shareholders but not profit to the Ltd co.

SRB has made money through royalty on ticket sales which has probably gone to a BVI holding co.

Delta have made profits through ticket sales on it's flights.

Under normal circumstances this would continue. Right now there are no ticket sales just $millions in lease costs which is unsustainable. It needs considerable investment from somewhere with limited prospects for return.

Ed Bastion has indicated there is value in the brand, which is true. Virgin Ltd could go into administration and SRB could give the brand rights to another airline.

The mention of Temasek is interesting as the current open skies would allow a Singapore based airline to operate UK-US flights.

Not saying this will happen but it says to Delta they aren't the only game in town. The value of Virgin isn't just in the brand but the IP that is tied to the brand. The thing about that structuring it that way is it's really flexible.

For eg you could split the current business in 2 and have Virgin Atlantic serving the US and Virgin Asia flying to India, Singapore & Hong Kong.

No airline is viable right now but these could be viable structures in the future and FFers wouldn't be able to tell the difference.


This is spot on - thanks to 3AWM for some sensible and accurate analysis as opposed to the bizarre and circular rants that appear in here.
 
BrianDromey
Posts: 2709
Joined: Sun Dec 10, 2006 2:23 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:38 pm

winginit wrote:
Arion640 wrote:
Haha tell that to Deltas shareholders who's £224 million investment in VS is down the tubes. Who will also be losing influence over slot pairs at the worlds premier airport. Virgin is far more than “marginal” interest.


How is it that Delta would lose their slot influence? They'll maintain a 49% stake and board seats regardless of what happens to the other 51% (unless they're planning to sell their stake, which seems unlikely). Additionally, it's unlikely that any buyer or group of buyers would want to stir the pot with Delta.


If VS goes into administration the current shareholders loose all their equity, unless they form some sort of consortium to buy the airline out of administration. It might be that the debts owed to DL for some sort of equity swap in the successor company to whatever VS2 might be. What is clear is that VS has mortgaged or borrowed against most of their assets. The reduction in cashflow has resulted in them being unable to service that debt, in the short term. Furlough scenes and suspension of flying has bought them some time. On the positive side they have a good brand, a competitive product, a strong parter over the Atlantic with a strong US point of sale. In the UK they have a strong holiday business with only TUI as direct competition. The model seems viable, but the 2020 reshaping of the airline industry might well mean that VS emerges as a high-density 747 operator for Virgin Holidays and A330 operator for DL and little else. I accept that anything could happen, but in an era of cheap fuel, depressed and demand, low-capital older frames might be a better option.
 
sevenheavy
Posts: 969
Joined: Tue Mar 23, 2004 3:30 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:48 pm

Opus99 wrote:
sevenheavy wrote:
Opus99 wrote:
https://www.bloomberg.com/news/articles/2020-04-25/richard-branson-seeking-buyer-for-virgin-atlantic-telegraph

Well would you look at that. If by the end of May they don’t secure something. Virgin is done...according to Branson


Nowhere in the article does it say that VS are ‘done’ without a buyer by the end of May. What it actually says is that the end of May is simply the deadline for private investment talks.

Regardless, Reuters has issued a clarification from VS which says there is no fixed deadline, and also that government talks are still ongoing.

https://uk.reuters.com/article/us-healt ... KKCN22801J

Given that any government assistance is an absolute last resort (as previously reported) it would make sense that the exploration of private investment is part of that process.


If the government wanted to give virgin that money. They would’ve given them. Let’s be real. Apologies because the article does not say that anywhere you’re right.

VS has said a lot of confusing things in this time, like they said government talks were progressing but the next day they were sent back by the government. Then VS says without government backing it will fail now they’re up for sale. I mean...


Of course there will be lots of conflicting information. Most of the articles and reports are pure speculation and supposition. Very few people are privy to the real content of the discussions and I’m pretty sure they aren’t talking to anyone, much less us!

I’d actually argue that this all fits a logical series of events. It’s widely reported that the government wouldn’t commit to the initial request for funds and asked VS to go back and ensure every other avenue had been explored. It looks like that’s exactly what they’re doing now whilst talks with the government continue?

No one knows what the outcome will be but to me the sequence of events makes sense
So long 701, it was nice knowing you.
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:51 pm

TBH right now is the ideal time to go into administration. It can be done without any tangible impact on ticket sales or disruption of service. Most crew salaries will also be covered by the furlough scheme in the short term. Consumers may not even notice it happens.

The only value in Virgin the corporate entity is the (rights to operate) the slots and neither shareholder stands to lose much by winding it up. Post covid19 getting slots at LHR may not be a problem anyway and may even present an opportunity to grow share in the long term without onerous commitments to leases on widebodies.

BA have not asked for government assistance but if the current crisis goes on for a long time they surely would need it. Their position reminds me of this old joke:

Two men were walking through the woods when a large bear walked out into the clearing no more than 50 feet in front of them. The first man dropped his backpack and dug out a pair of running shoes, then began to furiously attempt to lace them up as the bear slowly approached them. The second man looked at the first, confused, and said, "What are you doing? Running shoes aren't going to help, you can't outrun that bear." "I don't need to," said the first man, "I just need to outrun you."
Last edited by 3AWM on Sun Apr 26, 2020 12:52 pm, edited 1 time in total.
 
tphuang
Posts: 5184
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 12:51 pm

At this point, I think the most likely scenario is ba taking over virgin. All these private equity guys are just vultures. To think they want to actually go in and fix the airlines with millions of their own money is laughable. Srb would be wise to swallow his pride and see what he can get from ba. I am sure ba is willing to pay off a portion of their debts to take over all those slots at lhr and lgw.
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:02 pm

But why catch a falling knife .... it makes much more sense for BA to watch and let it collapse , it’s not a viable business and the slots etc can be picked up for nothing In a few months .

The important thing is that government must not intervene or be scammed by SRB.
 
davidjohnson6
Posts: 851
Joined: Mon Jun 20, 2016 10:10 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:04 pm

While LHR slots will be of interest to BA, they wouldbe much more interested in the possibility of taking out a competitor in the long haul market from London, and leaving Delta/Skyteam in a very weak position in the UK-US market
 
goosebayguy
Posts: 705
Joined: Fri Sep 25, 2009 1:12 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:10 pm

The reason no one will buy VS is bacause there are no assets and the debt pile is £1.5bn. It will go into receivership and then possibly emerge with a few less aircraft and routes if a buyer can be found. Branson and Delta will lose everything.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:12 pm

I for one are of the idea that the UK government would’ve given VS this loan if they wanted to and that’s just facts. They keep giving them excuses when they come back. Think about it. They’re the ones that came and ask for 7.5 Bill for the industry they said no…they came back AGAIN they sent them back saying they were not impressed with their bid and they need to try harder to raise funds. If the government really wanted to give them that money they would’ve given it to them. Didn’t they bail out Flybe and then refused to publish the terms of the bailout because even though it doesn’t make sense if the government wants to bail you out it will even if your request is not that strong. That’s the way I see it at least. The government is not telling them no but it’s not telling them yes I think they just want to drag it out till they actually fall under. How can the government send you back into the market knowing IN THIS CLIMATE how difficult that will be. I mean obviously no other airline but of course distressed security hedge funds are swooping in.

That’s just the way I see it
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:13 pm

For BA buying VS would be the dumbest thing ever. All they would acquire would be the obligation to pay leases on 40 aircraft.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:23 pm

Galwayman wrote:
The important thing is that government must not intervene or be scammed by SRB.


I can understand why the government must not be scammed by SRB - and I wholeheartedly agree with that.

I cannot possibly fathom why anyone would legitimately say the government must not intervene. There is government intervention in airlines the world over at the moment ... Delta, United, American, Emirates, Qatar, Etihad, Singapore, Air France, KLM, Lufthansa
 
tphuang
Posts: 5184
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 1:53 pm

I don't know the UK bankruptcy laws, so this is probably nonsense. BA doesn't buy VS at current state. Too much debt. They wait for it to go into administration, they pay some money to get whatever part of their fleet they want and a large portion of slots. Not everyone lose their jobs. Maybe the British gov't put some money in to encourage BA to do this. The rest gets put up for auction in a few months when there is demand to fly again. DL can get some of the slots that way and pay it with the money VS owes them. All of the creditors get a fraction of money that's owed to them.
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:14 pm

tphuang wrote:
I don't know the UK bankruptcy laws, so this is probably nonsense. BA doesn't buy VS at current state. Too much debt. They wait for it to go into administration, they pay some money to get whatever part of their fleet they want and a large portion of slots. Not everyone lose their jobs. Maybe the British gov't put some money in to encourage BA to do this. The rest gets put up for auction in a few months when there is demand to fly again. DL can get some of the slots that way and pay it with the money VS owes them. All of the creditors get a fraction of money that's owed to them.


I thought VS has no unencumbered assets? Is that not the main reason they can't get a loan, commercial or otherwise? There will be nothing to pick over in that case. The brand is owned by the Virgin group so not even that is freely available in administration. It would take a very brave (or foolish) investor to take on this company as it is in an industry that'll come out of this quite a bit smaller depending on who you listen too
 
LHRFlyer
Posts: 1040
Joined: Sun Apr 11, 2010 12:50 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:15 pm

Unless competition regulators were prepared to waive it through, BA buying VS would only mean it would have to forfeit a lot of the LHR slots on overlapping routes to competitor airlines.

Also don't forget there is huge personal animosity between Willie Walsh and Richard Branson. Willie wouldn't be prepared to hand over a penny to SRB.
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:18 pm

DobboDobbo wrote:
Galwayman wrote:
The important thing is that government must not intervene or be scammed by SRB.


I can understand why the government must not be scammed by SRB - and I wholeheartedly agree with that.

I cannot possibly fathom why anyone would legitimately say the government must not intervene. There is government intervention in airlines the world over at the moment ... Delta, United, American, Emirates, Qatar, Etihad, Singapore, Air France, KLM, Lufthansa


The British government is taking a much more free market approach than most others. The US is similar but has most of its airlines crying for help. The UK has their biggest airline saying they are fine at the moment. Support an already weak organisation and thereby weakening a stronger one? As sad as all of this is, aviation jobs will have to go in the immediate aftermath of Covid-19 and letting VS fail might be the best course of action.
 
f4f3a
Posts: 611
Joined: Thu Jul 29, 2004 4:07 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:24 pm

It's s long shot but if it goes to admin . Could JetBlue plus investors buy the bits that are left and start a UK division to do Atlantic routes ?
 
User avatar
flee
Posts: 1280
Joined: Mon Oct 12, 2009 8:14 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:26 pm

If VS collapses, it will be good news for BA. If BA then cuts its losses (this year) as a result of a lack of competition from VS, it is good for the British taxpayer. Helping to prop up VS does not give the British taxpayer a value proposition. Boris should just let market forces dictate and not intervene. The whole world is affected by Corvid-19 and all economies will slow down no matter what we do. Now is the time those highly paid executives have to earn their money, for once. Let them do their work!
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:41 pm

Virgin Atlantic is a worthy investment for investors who can afford a longer investment horizon. It is probably a good thing that investment banks are involved as advisors and that sovereign wealth funds are considered. I find it somewhat surprising that the Bank of England hasn't followed yet the US Federal Reserve in buying high-yield corporate bonds. At the end of they day, the enemy here is not Richard Branson, it is a decade-long economic depression. Looks like many people still have not grasped the enormity of the situation.
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:48 pm

VS11 wrote:
Virgin Atlantic is a worthy investment for investors who can afford a longer investment horizon. It is probably a good thing that investment banks are involved as advisors and that sovereign wealth funds are considered. I find it somewhat surprising that the Bank of England hasn't followed yet the US Federal Reserve in buying high-yield corporate bonds. At the end of they day, the enemy here is not Richard Branson, it is a decade-long economic depression. Looks like many people still have not grasped the enormity of the situation.


It would be good if you could provide the numbers to back up the notion that VS is a good long term investment. All we hear is about a company with more debt than assets, in a shrinking industry with strong competitors.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 2:53 pm

https://twitter.com/winglets747/status/ ... 27712?s=20

This Tweet sums up exactly the difference between a viable business and a non viable business and people dare to call Virgin Atlantic competition.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:06 pm

Westerwaelder wrote:
VS11 wrote:
Virgin Atlantic is a worthy investment for investors who can afford a longer investment horizon. It is probably a good thing that investment banks are involved as advisors and that sovereign wealth funds are considered. I find it somewhat surprising that the Bank of England hasn't followed yet the US Federal Reserve in buying high-yield corporate bonds. At the end of they day, the enemy here is not Richard Branson, it is a decade-long economic depression. Looks like many people still have not grasped the enormity of the situation.


It would be good if you could provide the numbers to back up the notion that VS is a good long term investment. All we hear is about a company with more debt than assets, in a shrinking industry with strong competitors.


None of the competition is strong now or will be in the near future. The major factor that has hurt VS in past was global alliances and JV's and the fact that VS stayed out of them for many years. There is absolutely nothing to suggest that VS is a non-viable business as many haters here claim.

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