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Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:12 pm

Virgin atlantic's business model is not even viable. How many SOLELY long-haul carriers do you know in this industry? Usually you build strong domestic and intra-european presence and build a strong customer base around the continent that will support you when you decide to launch long haul. Look at Jet blue, they've built a strong american presence albeit moreso on the east coast but a very strong customer base nonetheless and once they launch transatlantic best believe their customers will be right behind them. I just don't see how operating long-haul only can be sustainable and clearly it hasn't. Even ME3 that focus on long haul connectivity need the support of their domestic base. see what happened to Qatar when they were shut off from the rest of the middle east.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:17 pm

Opus99 wrote:
Virgin atlantic's business model is not even viable.


Yes because for 36 years Richard Branson has been just pouring money and losing it for the fun of it.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:27 pm

VS11 wrote:
Opus99 wrote:
Virgin atlantic's business model is not even viable.


Yes because for 36 years Richard Branson has been just pouring money and losing it for the fun of it.


Might as well have been. The business has been edging along for years. The model is no longer viable clearly. Even if at some point it might have been. But if the business cannot even enjoy its profits then what is the point? Because you’re edging does not mean you’re viable. For the past 10 years it has not been viable. So please
 
gunnerman
Posts: 1143
Joined: Fri May 19, 2017 7:55 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:29 pm

I see several posts about BA buying (or not buying) VS, the assumption is that BA is going to be around to make that decision. Can I just remind you that all airlines are in dire straits if this crisis continues for a long time and will go bust without help from governments or shareholders. All you have to do is look at LH which is due to run out of cash by the end of May and is trying to get a €10Bn rescue package consisting of state-guaranteed loans from Germany and debt supplied by Austria, Switzerland and Belgium. Or what about AF-KLM which is also negotiating their own €10Bn rescue package from the Dutch and French governments. Or what about the ME3 who certainly won't go under as they are owned by their governments. I could go on but I think you should get the point.

These are not normal times and normal rules of bailouts don't necessarily apply. The UK government is quite right in insisting that VS must exhaust all other financing options before getting a government loan, but the government must also take into account that if VS can put together a credible business plan with DL to return to profitability in the medium term then there must be a case to help a company which not only employs many highly-skilled people but also supports the jobs of such people in its airports and suppliers. And in case if anyone thinks that I have a VS bias, I can say that for every VS flight I've probably had 10 BA flights, I need BA to survive more than VS but I'd hate to see reputable airline go under if it can be saved.
Last edited by gunnerman on Sun Apr 26, 2020 3:33 pm, edited 1 time in total.
 
tphuang
Posts: 5183
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:29 pm

flee wrote:
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!


VS collapsing really only gives BA monopoly in one decent sized market (MIA-LHR). BA is still facing a lot of competition in the current environment. And it will likely face more competition as VS slots get auctioned off.

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.

Even if what you say is true, try finding an investor in the current environment with that kind of cash, patience and risk tolerance.
Based on the people that "are interested", VS will be divided up by vultures.
There is not a single airline group that can invest in VS at the moment.

VS has not made money in 7 out of past 10 years when airline industry as a whole has been doing well. Who in their right mind it going to take on the debt and lose year for another 10 years? Terrible investment idea.
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 3:49 pm

VS11 wrote:
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.


Got any analysts to back this up? Would be good otherwise it's "in my opinion". If Virgin is only viable in one of the big JVs then many of the critics on here are right it it not worth saving. None of the three big transatlantic JVs are currently in danger - with our without VS.

None of the competition is strong is correct but two UK carriers have assets to see them part of the way. VS seemed to buckle straight away.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:08 pm

Westerwaelder wrote:
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.


It is true that the UK government seems to be taking a laissez faire attitude to the aviation sector.

However, the UK government cannot arbitrarily decide not to help VS but help BA when it’s time comes. If it does, the taxpayer would likely be faced with the unenviable position of facing a claim from the shareholders of VS, but without the benefit to UK society of VS remaining a going concern.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:09 pm

tphuang wrote:
Even if what you say is true, try finding an investor in the current environment with that kind of cash, patience and risk tolerance.
Based on the people that "are interested", VS will be divided up by vultures.
There is not a single airline group that can invest in VS at the moment.

VS has not made money in 7 out of past 10 years when airline industry as a whole has been doing well. Who in their right mind it going to take on the debt and lose year for another 10 years? Terrible investment idea.


Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:12 pm

Opus99 wrote:
VS11 wrote:
Opus99 wrote:
Virgin atlantic's business model is not even viable.


Yes because for 36 years Richard Branson has been just pouring money and losing it for the fun of it.


Might as well have been. The business has been edging along for years. The model is no longer viable clearly. Even if at some point it might have been. But if the business cannot even enjoy its profits then what is the point? Because you’re edging does not mean you’re viable. For the past 10 years it has not been viable. So please


Opus, your posts suggest you don’t understand the difference between how and why a company returns value to its shareholders and turns a profit.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:19 pm

3AWM wrote:
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."


I think this is another bang on post.

The way UK insolvency law works is not kind to airlines. Administration is the process that is supposed to enable companies to emerge from the process as a going concern - during the process they continue trading.

As I understand it, the CAA do not permit administrators to operate using the airline in administration’s operating certificate - which means that they cannot continue trading and they inevitably cannot emerge as a going concern.

However, at present no airline can trade with anything approaching normality, so if there was ever a time for a speedy or pre-packed administration process for a UK airline - I agree there may not be a better time than now.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:25 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.


If that was the case the they would already have the money and would not be after a Government loan...
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:25 pm

DobboDobbo wrote:
Opus99 wrote:
VS11 wrote:

Yes because for 36 years Richard Branson has been just pouring money and losing it for the fun of it.


Might as well have been. The business has been edging along for years. The model is no longer viable clearly. Even if at some point it might have been. But if the business cannot even enjoy its profits then what is the point? Because you’re edging does not mean you’re viable. For the past 10 years it has not been viable. So please


Opus, your posts suggest you don’t understand the difference between how and why a company returns value to its shareholders and turns a profit.

I dont literally mean 'enjoy' it. the whole idea of making profit is maximising shareholder return and organic growth where it can be achieved. and in many ways that takes time. The business is established no doubt but its no longer viable in today's market and its financials show so very clearly. I mean it must've been in a relatively good cash position because in a lot of ways cash is king but at the same time if you have made a profit only 3 times in 10 years and your so-called direct competitor has made 11 billion in that same time, something must be wrong. If its not the viability of the business then tell me what the issue is with VS. Because every point against VS's viability has been argued then why is it constantly making a loss? Can someone actually tell us what the problem is
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:27 pm

DobboDobbo wrote:
Westerwaelder wrote:
DobboDobbo wrote:

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.


It is true that the UK government seems to be taking a laissez faire attitude to the aviation sector.

However, the UK government cannot arbitrarily decide not to help VS but help BA when it’s time comes. If it does, the taxpayer would likely be faced with the unenviable position of facing a claim from the shareholders of VS, but without the benefit to UK society of VS remaining a going concern.[/quotel]

I would not consider it arbitrary if one company with assets gets a loan against these as security and another company with no assets available to be used as security does not receive a loan. It's just good business sense. One loan is secure, the other one is a pure risk.
 
tphuang
Posts: 5183
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:31 pm

VS11 wrote:
tphuang wrote:
Even if what you say is true, try finding an investor in the current environment with that kind of cash, patience and risk tolerance.
Based on the people that "are interested", VS will be divided up by vultures.
There is not a single airline group that can invest in VS at the moment.

VS has not made money in 7 out of past 10 years when airline industry as a whole has been doing well. Who in their right mind it going to take on the debt and lose year for another 10 years? Terrible investment idea.


Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.


for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:31 pm

If Virgin Atlantic goes into to administration then it will be the end, all flying will be stopped and its AOC suspended.. The administrators would try and sell it as a going concern first to pay of its debts, highly unlikely to find someone or it would already have happened. Next the adminsttators will sell any assets to raise funds, so end of the airline.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:39 pm

Westerwaelder wrote:
DobboDobbo wrote:
Westerwaelder wrote:

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.


It is true that the UK government seems to be taking a laissez faire attitude to the aviation sector.

However, the UK government cannot arbitrarily decide not to help VS but help BA when it’s time comes. If it does, the taxpayer would likely be faced with the unenviable position of facing a claim from the shareholders of VS, but without the benefit to UK society of VS remaining a going concern.[/quotel]

I would not consider it arbitrary if one company with assets gets a loan against these as security and another company with no assets available to be used as security does not receive a loan. It's just good business sense. One loan is secure, the other one is a pure risk.


The UK Government will apply the same rules to BA as it is has for VS. Its not BA fault if they qualify and Virgin don't.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:40 pm

tphuang wrote:
VS11 wrote:
tphuang wrote:
Even if what you say is true, try finding an investor in the current environment with that kind of cash, patience and risk tolerance.
Based on the people that "are interested", VS will be divided up by vultures.
There is not a single airline group that can invest in VS at the moment.

VS has not made money in 7 out of past 10 years when airline industry as a whole has been doing well. Who in their right mind it going to take on the debt and lose year for another 10 years? Terrible investment idea.


Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.


for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.


1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.
2) VS is now part of JV so yes it benefits them now but not in the past.
3) Yes it makes sense because without pre-packaged bankruptcy DL/NW, CO/UA, AA/US would not have happened and TATL market would have been very different for the past 15 years.
 
sevenheavy
Posts: 969
Joined: Tue Mar 23, 2004 3:30 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:46 pm

Opus99 wrote:
Virgin atlantic's business model is not even viable. How many SOLELY long-haul carriers do you know in this industry? Usually you build strong domestic and intra-european presence and build a strong customer base around the continent that will support you when you decide to launch long haul. Look at Jet blue, they've built a strong american presence albeit moreso on the east coast but a very strong customer base nonetheless and once they launch transatlantic best believe their customers will be right behind them. I just don't see how operating long-haul only can be sustainable and clearly it hasn't. Even ME3 that focus on long haul connectivity need the support of their domestic base. see what happened to Qatar when they were shut off from the rest of the middle east.


DL found it sufficiently viable to not just invest, but embark on a significant profit and cost sharing JV. What analysis do you have that DL didn’t? Genuine question. Merely looking at publicly released profit and loss statements from the past few years is not the only indicator of viability. Saying their business model isn't even viable (they have been in business for 36 years) Based on the current situation driven by a once in a lifetime global pandemic doesn’t represent the current trading environment all airlines find themselves in

VS employ many thousands of people, all paying tax (and some of them lots of it) in addition to providing long haul growth at a number of regional airports like MAN, GLA and BFS and during the last 8 years alone taken delivery of 31 new aircraft (all with U.K. built engines). They are also the second largest long haul holiday provider via Virgin Holidays

I don’t claim to have access to detailed financial information either but too much on here is being quoted as detail and analysis driven fact, based on nothing more than (often later corrected or clarified) media reports and speculation. Fine. This is a discussion board after all, but that’s all it is
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 4:52 pm

jomur wrote:
Westerwaelder wrote:
DobboDobbo wrote:


It is true that the UK government seems to be taking a laissez faire attitude to the aviation sector.

However, the UK government cannot arbitrarily decide not to help VS but help BA when it’s time comes. If it does, the taxpayer would likely be faced with the unenviable position of facing a claim from the shareholders of VS, but without the benefit to UK society of VS remaining a going concern.[/quotel]

I would not consider it arbitrary if one company with assets gets a loan against these as security and another company with no assets available to be used as security does not receive a loan. It's just good business sense. One loan is secure, the other one is a pure risk.


The UK Government will apply the same rules to BA as it is has for VS. Its not BA fault if they qualify and Virgin don't.


We don’t know what the government will or won’t do in the future, or how it will be justified. It is plainly not easy, and I struggle to see how it can be undertaken without political and legal risk.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 4:57 pm

sevenheavy wrote:
Opus99 wrote:
Virgin atlantic's business model is not even viable. How many SOLELY long-haul carriers do you know in this industry? Usually you build strong domestic and intra-european presence and build a strong customer base around the continent that will support you when you decide to launch long haul. Look at Jet blue, they've built a strong american presence albeit moreso on the east coast but a very strong customer base nonetheless and once they launch transatlantic best believe their customers will be right behind them. I just don't see how operating long-haul only can be sustainable and clearly it hasn't. Even ME3 that focus on long haul connectivity need the support of their domestic base. see what happened to Qatar when they were shut off from the rest of the middle east.


DL found it sufficiently viable to not just invest, but embark on a significant profit and cost sharing JV. What analysis do you have that DL didn’t? Genuine question. Merely looking at publicly released profit and loss statements from the past few years is not the only indicator of viability. Saying their business model isn't even viable (they have been in business for 36 years) Based on the current situation driven by a once in a lifetime global pandemic doesn’t represent the current trading environment all airlines find themselves in

VS employ many thousands of people, all paying tax (and some of them lots of it) in addition to providing long haul growth at a number of regional airports like MAN, GLA and BFS and during the last 8 years alone taken delivery of 31 new aircraft (all with U.K. built engines). They are also the second largest long haul holiday provider via Virgin Holidays

I don’t claim to have access to detailed financial information either but too much on here is being quoted as detail and analysis driven fact, based on nothing more than (often later corrected or clarified) media reports and speculation. Fine. This is a discussion board after all, but that’s all it is

Why have they made a profit 3 times in 10 years? since DL invested in 2013 they've made a profit twice in the last 7 years. The model for the most part was viable but its clearly been struggling the past decade at least. every one arguing in favour of the businesses viability is yet to identify why the business has been loss making for 10 years
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:01 pm

VS11 wrote:
tphuang wrote:
VS11 wrote:

Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.


for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.


1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.
2) VS is now part of JV so yes it benefits them now but not in the past.
3) Yes it makes sense because without pre-packaged bankruptcy DL/NW, CO/UA, AA/US would not have happened and TATL market would have been very different for the past 15 years.

this slot argument. they want more slots the ones they have already they can't turn a profit yet they want more...I don't understand the logic. and this argument of fly planes profitably how can you do that if you're making an operating loss?

Looking at VS history, they were actually making money pre-2010 so their model is probably viable apologies on that but there are still some questions that need to be answered on why it has failed to make profits over the last 10 years
 
tphuang
Posts: 5183
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:06 pm

VS11 wrote:
tphuang wrote:
VS11 wrote:

Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.


for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.


1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.
2) VS is now part of JV so yes it benefits them now but not in the past.
3) Yes it makes sense because without pre-packaged bankruptcy DL/NW, CO/UA, AA/US would not have happened and TATL market would have been very different for the past 15 years.

There are many other airlines that should get lhr slots before vs. they have been paying more and being on the list longer. And again, being in one of the largest jv means they bring minimal benefit in terms of competition. Give those slots to new entrants. That will actually bring competition.

Your response seems to complain about things 10 or 15 years ago. We are at a different era now.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:06 pm

skipness1E wrote:
What routes will BA(/AA) have to themselves if Virgin collapse? Only LHR-MIA I think? The rest all have some serious competition.


Various Caribbean routes from LGW would be a BA monopoly except for any that TUI also operate as charters.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:10 pm

jomur wrote:
I wonder if SRB remembers 2008/9 when he said the UK Government should not bail out BA when they where losing money? He basically said it should just fail. Maybe he should follow his own words now....


Like I said on Friday before my post was deleted, when BA did what they did in the Dirty Tricks scandal it’s unsurprising these things aren’t forgotten about on a personal level.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:14 pm

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 ...


Eh? If COVID-19 hadn’t bitten, we wouldn’t be having this conversation right now. It’s also premature to talk about VS being “another failed enterprise from Branson” when it’s still very much in business. Come back if it actually goes under and we can have that conversation then.
 
VS11
Posts: 1661
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:27 pm

Opus99 wrote:
this slot argument. they want more slots the ones they have already they can't turn a profit yet they want more...I don't understand the logic. and this argument of fly planes profitably how can you do that if you're making an operating loss?


What is so difficult to understand about the slots? BA got them for free and BA's competitors have to chip in tens of millions per slot just for a start. It is a cost that the business has to recover, a cost that BA does not have. It is pretty simple. In a market where frequency is important, this is a big deal - it amounts to hundreds of millions of dollars.

Opus99 wrote:
Looking at VS history, they were actually making money pre-2010 so their model is probably viable apologies on that but there are still some questions that need to be answered on why it has failed to make profits over the last 10 years


It is the market dynamics after the EU-US Open Skies and the 2008 financial crisis. After the agreement, lots of US carriers started flying to LHR. Problem was the 6 US legacies became 3 larger and stronger competitors and on top of it BA was in bed with AA. So VS had to compete with very strong competitors with deeper pockets and VS was hurting after the 2008 financial crisis.

Branson wanted to stay independent until he realized that VS won't survive as an independent carrier. This resulted in change of strategy and the Delta hookup and subsequent AF/KL/DL JV. Then things improved and AF/KL were going to be come investors in VS but then Brexit happened and Branson kept his 51%. And now Covid is happening.
 
VS11
Posts: 1661
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:37 pm

tphuang wrote:
There are many other airlines that should get lhr slots before vs. they have been paying more and being on the list longer. And again, being in one of the largest jv means they bring minimal benefit in terms of competition. Give those slots to new entrants. That will actually bring competition.


Sure, I agree. Slots are an artificial barrier to entry and prevent competition.

tphuang wrote:
Your response seems to complain about things 10 or 15 years ago. We are at a different era now.


I am not complaining. It is just a fact. The aggregation of 6 US carriers into 3 carriers is an event that changed the industry domestically and internationally. It made these 3 carriers stronger and more difficult to compete against. The current era is a direct result of these 3 mergers.
 
3AWM
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:41 pm

FYI a pre-pack administration is where the owners of an existing business buy selected assets from a failing business leave and certain liabilities behind. It's basically an overnight thing with the structure already agreed before the company goes into administration and the new trading entity able to begin trading the straight away.

Virgin already have a subsidiary with a 2nd AOC so getting the AOC cancelled is not an obstacle to that.

If UK gov lent Virgin £500m how would that have been spent? Paying leases on aircraft that are sitting on the ground for 6 months. I wouldn't make sense. Aircraft lessors are the end of the line.
 
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adambrau
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:49 pm

VS11 wrote:

1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.



Actually United bought Pan Am's London routes for $400 million in 1990 and American bought TWA's London routes in 1991 for $445 million.
JFK Friendly
 
GDB
Posts: 13740
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:52 pm

jomur wrote:
Westerwaelder wrote:
DobboDobbo wrote:


It is true that the UK government seems to be taking a laissez faire attitude to the aviation sector.

However, the UK government cannot arbitrarily decide not to help VS but help BA when it’s time comes. If it does, the taxpayer would likely be faced with the unenviable position of facing a claim from the shareholders of VS, but without the benefit to UK society of VS remaining a going concern.[/quotel]

I would not consider it arbitrary if one company with assets gets a loan against these as security and another company with no assets available to be used as security does not receive a loan. It's just good business sense. One loan is secure, the other one is a pure risk.


The UK Government will apply the same rules to BA as it is has for VS. Its not BA fault if they qualify and Virgin don't.


Spot on. BA/IAG will have told the government they have cash reserves to last, worst case, for months.
HM Government also do not give a flying one about the events of the 1990's at least with VS vs BA..
As I mentioned in that also deleted post, SRB found out what 'dirty tricks' really were when he was setting up Virgin USA. Just like we thought at the time, at least those of us who do not view SRB as some kind of messiah.

You can only be a (tabloid) media darling for so long.

The only 'bail out' BA are getting, is like most businesses, the government furlough scheme, which is lucky too for VS staff, who deserve the same, especially after SRB initially was going to send them off for 2 months unpaid. From his tax haven.
Also, like it or not, BA are seen by the government as an important national asset. With most importantly a viable plan to hopefully ride this out.
Last edited by GDB on Sun Apr 26, 2020 5:54 pm, edited 1 time in total.
 
BealineV953
Posts: 186
Joined: Fri Jul 26, 2019 10:00 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:53 pm

VS11 wrote:
Opus99 wrote:
this slot argument. they want more slots the ones they have already they can't turn a profit yet they want more...I don't understand the logic. and this argument of fly planes profitably how can you do that if you're making an operating loss?


BA got them for free and BA's competitors have to chip in tens of millions per slot just for a start. It is a cost that the business has to recover, a cost that BA does not have.

Opus99 wrote:
Looking at VS history, they were actually making money pre-2010 so their model is probably viable apologies on that but there are still some questions that need to be answered on why it has failed to make profits over the last 10 years


Branson wanted to stay independent until he realized that VS won't survive as an independent carrier. This resulted in change of strategy and the Delta hookup and subsequent AF/KL/DL JV. Then things improved and AF/KL were going to be come investors in VS but then Brexit happened and Branson kept his 51%. And now Covid is happening.


Many of the slots BA has were allocated to them many, many years ago. In that sense, yes, they were free. That is how the industry works. However, BA has also paid for many of the slots it has in a variety of ways, for example, by buying bmi.

Before nearly half of Virgin was owned by Delta, it was owned by Singapore Airlines. Before Delta, it already wasn't independent
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
Boeing74741R
Posts: 1398
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:56 pm

tphuang wrote:
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.


I can’t see BA, or more strictly speaking IAG, mounting a takeover bid, otherwise they would probably be forced to give up slots at LHR like when they took over bmi. Similar at LGW I suspect despite VS gradually reducing their presence there over the years. I also think IAG are too busy trying to complete the Air Europa sale and ensuring their airlines come out the other side.
 
seansasLCY
Posts: 1097
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 5:59 pm

VS11 wrote:
tphuang wrote:
VS11 wrote:

Currently, governments can and do support many other airlines, companies and consumers not because they are excellent investments but because they are trying to prevent the total collapse of the economy as we know it. The flow of money is the overaching objective here.

But if you and many others here want to focus on the past 10 years of VS and the TATL market, you have to start on macro level and acknowledge:
1. The completely structurally distorted market that LHR is with BA controlling access to the market
2. The truly anti-competitive nature of the TATL JV's
3. The fact that US and EU/UK legislation are not on par when it comes down to solvency and bankruptcy protection, which plays to the benefit of the US carriers competing internationally.

In fact, #3 is the most important factor here because without US Chapter 11 many of the present-day US carriers wouldn't be here today and the entire competitive landscape would be different. Also because of 3. VS has no recourse the way its US competitors have.

On a micro level, VS has been an exemplary business that constantly focuses on its people, service and innovation. The issue for many independent players in the past 30 years has been that due to unrestricted capital flows, companies have been growing through M&A instead of organically and the smaller players have been artificially squeezed out. This is true not just for aviation but it is more painful there as it is truly global in nature without the global level playing field.


for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.


1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.
2) VS is now part of JV so yes it benefits them now but not in the past.


You keep speaking as though Virgin has never done anything wrong. Let’s not forget they have been involved in price fixing on a number of occasions, including colluding with BA to price fix on surcharges.

https://www.independent.co.uk/news/busi ... 6.html?amp

https://www.thisismoney.co.uk/money/new ... posed.html

As for part 2, you can’t complain that JV work better for other airlines and VS was loss making because it chose not to create one. If the opportunity to do so was equal then that’s virgin’s problem. It’s like me complaining that it’s hard for me to buy a house because I’m alone but a married couple can earn more and buy quicker.

Virgin wasn’t independent before Delta came along. It was owned in part by Singapore Airlines although it seems they also had a barely workable partnership and SQ lost on their investment.

BA has also paid a lot of slots. Granted it got many through grandfathering them but then so have most European majors at their hubs. However when BMI went up for sale, Virgin made a lot of fuss and then didn’t bid enough, and when remedy slots are available, Virgin couldn’t viably use them and ended up withdrawing.
 
Geoff1947
Posts: 628
Joined: Thu Jun 16, 2016 11:28 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 6:21 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.


This is completely wrong , if VS goes bankrupt DL as 49% owners stand to lose most if not all the assets.

Geoff
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 6:22 pm

seansasLCY wrote:
VS11 wrote:
tphuang wrote:

for 1) nothing will change even if they survive, so their business model is clearly unsustainable. A lot of airlines like Easyjet and Ryanair have done great and being really successful without LHR slots.
2) the anti-competitive TATL JVs favors VS since they are in one of them. What it's truly unfair for is DY and B6.
3) That makes no sense since US carriers are not close to bankruptcy and were all profitable before this.


1) On the contrary, they have proven they can fly planes profitably. If only their competition didn't get artificial sweeteners in terms of free LHR slots and collusion immunity.
2) VS is now part of JV so yes it benefits them now but not in the past.


You keep speaking as though Virgin has never done anything wrong. Let’s not forget they have been involved in price fixing on a number of occasions, including colluding with BA to price fix on surcharges.

https://www.independent.co.uk/news/busi ... 6.html?amp

https://www.thisismoney.co.uk/money/new ... posed.html

As for part 2, you can’t complain that JV work better for other airlines and VS was loss making because it chose not to create one. If the opportunity to do so was equal then that’s virgin’s problem. It’s like me complaining that it’s hard for me to buy a house because I’m alone but a married couple can earn more and buy quicker.

Virgin wasn’t independent before Delta came along. It was owned in part by Singapore Airlines although it seems they also had a barely workable partnership and SQ lost on their investment.

BA has also paid a lot of slots. Granted it got many through grandfathering them but then so have most European majors at their hubs. However when BMI went up for sale, Virgin made a lot of fuss and then didn’t bid enough, and when remedy slots are available, Virgin couldn’t viably use them and ended up withdrawing.


I am not complaining about anything. I am just pointing to the market dynamics. And by independent I meant not being part of a JV or alliance. Even during SQ times I don't think VS was part of Star Alliance.
 
winginit
Posts: 2851
Joined: Sat Feb 23, 2013 9:23 pm

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 6:35 pm

Geoff1947 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.


This is completely wrong , if VS goes bankrupt DL as 49% owners stand to lose most if not all the assets.

Geoff


Yes obviously. I was referring to the outcome if Branson was able to sell the 51% to a different owner, and understood that even in that scenario Delta's share would likely be diluted. I should have made that clearer.
 
Junglejames
Posts: 69
Joined: Sat Jan 05, 2019 4:07 am

Re: Virgin Atlantic facing collapse

Sun Apr 26, 2020 6:58 pm

JannEejit wrote:
Armodeen wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating.


Yes but unfortunately in terms of UK taxpaying public, this is the perception that most will adhere too, come the final reckoning. I think SRB (the public face of Virgin) has created negative headlines in the UK in recent times, especially around his percieved personal wealth, his attempts to sue the NHS and walking away from a new Virgin Trains operator contract because of his unwillingness to underpin the staff pensions scheme associated with the West Coast line franchise renewal.

It may be about to become the world's most expensive case of 'the boy who cried wolf' ?
Please, just a quick request.
If you don't know what happened with the West Coast Mainline franchise renewal, then please don't go spouting pure rumours or guestimates.

The operating company that put in a bid to operate the next franchise (owned partly by Virgin, Stagecoach and SNCF) put in its own fair bid. It differed slightly from the DfT requirements, in that it did not fully cover the expected pension shortfall.
The DfT had requested companies to bid based on propping up past and future pension shortfalls to an unknown amount. This is quite clearly not feasible. Why would you prop up old and future shortfalls (which you had nothing to do with) to an unspecified amount? (government would have plucked a figure out of thin air at later date).

At the same time, the DfTs requirements were at the time being reviewed, and nothing was set in stone. It is quite possible the government may still have to prop the pension pot up.

So with these Things completely up in the air, and with how unfeasible a request it was, the new prospective operating company put in a bid that differed slightly. They informed the DfT beforehand that the bid would differ, and nothing was said. They were made to believe all would be fine (It later turned out the DfT kept quiet for a reason- they didn't want the other bidders to know it was essentially a 2 horse race, and so they allowed the prospective operator to keep spending millions of pounds on the bid).

It was not until late in the day, that the DfT turned round and said the bid was non compliant, and that Stagecoach (They were the ones dead against propping up the pension pot, not Virgin) were chucked out of another 2 bids for other franchises.

It has to be remembered, that the Virgin Trains that refused to prop up the pension pot was partly owned by 3 companies, and they were in effect, a different company to the one already operating the West Coast franchise, and they were bidding for a different operation (The new operation includes preparing for HS2).







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DL777200LR
Posts: 151
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 7:17 pm

https://www.forbes.com/sites/willhorton ... 3973d6ea2f

Didn’t see this posted, but looks like Branson is finally giving up hope on acquiring a loan from the UK government.
Nothing better than the sound of a 77W GE90-115B on engine start.
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:10 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!
 
Galwayman
Posts: 901
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Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:19 pm

Dmoney 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!


Spot on . It’s unworthy of any investment . Even Branson won’t put any of his own money into it . And that says it all really ...
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:27 pm

Or Branson whining like a little girl that it's unreasonable to ask him to liquidate assets in a distressed market. Turns out the chap is broke. Because being ACTUALLY rich means you are liquid. If you aren't rich enough to have 200 million in liquid securities then your just another leveraged liar fronting you have money when you don't?

Also where is the incentive to run a conservative balance sheet if you can't pickup cheap assets and companies during a downturn because they get bailed out?
 
anstar
Posts: 3274
Joined: Sun Nov 23, 2003 3:49 am

Re: Virgin Atlantic needs government support?

Sun Apr 26, 2020 9:54 pm

Opus99 wrote:
Looking at VS history, they were actually making money pre-2010 so their model is probably viable apologies on that but there are still some questions that need to be answered on why it has failed to make profits over the last 10 years


VS have struggled ever since they faced more competition at LHR when Bermuda II was scrapped in 2007.
 
Opus99
Posts: 968
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 12:39 am

https://www.thetimes.co.uk/article/sir- ... -22rnbkrzb

The times is reporting that a VS Spokesman says the virgin group does not intend on selling the business?

A spokesman said: “Virgin Group is providing liquidity to help support its companies and save jobs. Richard and the Virgin Group are committed to the airline and are not looking to sell Virgin Atlantic.”
 
skipness1E
Posts: 4813
Joined: Sun Aug 19, 2007 9:18 am

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 1:38 am

Context, context, context.
Virgin’s major problem was not having a partner as SRB saw the rise of alliances as a cartel. He was eventually talked round and the business was well back on track partnering with Delta. That alone means a corner had been turned and the future was brighter. And then along came the Dreamliner engine fiasco and then Coronavirus.

And can our American friend all please stop assuming the rest of the airline business works the same way as it does in the US? It really doesn’t! More importantly, for political as well as geographical reasons, it really can’t.
 
skipness1E
Posts: 4813
Joined: Sun Aug 19, 2007 9:18 am

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 1:46 am

Dmoney 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!

The voice of corporate finance, and you seem like great fun at parties by the way, misses out that the taxpayer has to pick up the bill for all those unemployed staff as we have a different view of social security. Fabulous use of “dirt poor British”, I don’t imagine they let you anywhere near comms?
There’s a lot of loud opinions on here just desperate for VS to fail. Half of them can’t even tell VA from VS.
Now in normal trading, those 8500 unemployed staff would have a fighting chance of another job. Today most of them will never fly as cabin crew again if VS fold. The pilots won’t be bouncing back anytime soon either. This is no longer analogous to Thomas Cook or Flybe, if HMG lets VS fail, and they might, those people are lost forever to the industry, and the economy isn’t in any shape to help them into new careers. But yeah, let’s bow down before corporate finance, three cheers for the team that gave us Fred Goodwin.
 
jetwet1
Posts: 3220
Joined: Thu Jun 14, 2007 4:42 am

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 3:25 am

Does anyone know if VS pays the Virgin Group a fee like every other non wholly owned Virgin company ?
 
jetwet1
Posts: 3220
Joined: Thu Jun 14, 2007 4:42 am

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 3:30 am

Dmoney wrote:

I work in corporate finance.


Okay, I am shattered and heading to bed, if you get bored, take a look through the VS 2018 annual report, see if you can find an expense of around 160m pounds.
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 6:39 am

Dmoney 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!


Absolutely right. I still haven't seen anything that says they are a worthy investment. Only (false) ramblings about free slots and connectivity for Delta
 
Westerwaelder
Posts: 237
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 6:51 am

skipness1E wrote:
Dmoney 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!

The voice of corporate finance, and you seem like great fun at parties by the way, misses out that the taxpayer has to pick up the bill for all those unemployed staff as we have a different view of social security. Fabulous use of “dirt poor British”, I don’t imagine they let you anywhere near comms?
There’s a lot of loud opinions on here just desperate for VS to fail. Half of them can’t even tell VA from VS.
Now in normal trading, those 8500 unemployed staff would have a fighting chance of another job. Today most of them will never fly as cabin crew again if VS fold. The pilots won’t be bouncing back anytime soon either. This is no longer analogous to Thomas Cook or Flybe, if HMG lets VS fail, and they might, those people are lost forever to the industry, and the economy isn’t in any shape to help them into new careers. But yeah, let’s bow down before corporate finance, three cheers for the team that gave us Fred Goodwin.


As sad as this is, many cabin crew for a lot of airlines will never work in those roles again. If you look at the numbers, the airline industry will be a lot smaller after the crisis - meaning a lot fewer jobs. VS are no exception. Demand will be lower and every VS job you artificially maintain through a non asset backed loan, you will take from someone at another airline.
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Mon Apr 27, 2020 8:09 am

skipness1E wrote:
Dmoney 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.



You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people. VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.

I work in corporate finance. Equity has to stump up here. They take the pain here.

Anyway reality will smack you in the face at some point. Nobody is giving VS a dime because they don't want to appear before a select committee explaining why they gave cash to a firm when every reasonable projection showed it wasn't coming back!

The voice of corporate finance, and you seem like great fun at parties by the way, misses out that the taxpayer has to pick up the bill for all those unemployed staff as we have a different view of social security. Fabulous use of “dirt poor British”, I don’t imagine they let you anywhere near comms?
There’s a lot of loud opinions on here just desperate for VS to fail. Half of them can’t even tell VA from VS.
Now in normal trading, those 8500 unemployed staff would have a fighting chance of another job. Today most of them will never fly as cabin crew again if VS fold. The pilots won’t be bouncing back anytime soon either. This is no longer analogous to Thomas Cook or Flybe, if HMG lets VS fail, and they might, those people are lost forever to the industry, and the economy isn’t in any shape to help them into new careers. But yeah, let’s bow down before corporate finance, three cheers for the team that gave us Fred Goodwin.



Lad, I'm an jeffing Fabian. But we live in the world we live in..... Just don't ask me to bailout rich people with my taxes using crocodile tears about the working man. On both counts you've not got a leg to stand on.

The rich shouldn't bailout to the poor. Branson should pay for it. If you've been to places like Hull recently, the UK has seriously deprived area.

If you want be a businessman and a capitalist instead of a bleeding heart socialist like myself. Learn about a effing capital stack. Either equity recapitalizes the business, you do a debt equity swap or you go into administration and have a bidder rescue the viable bits (unlikely given all the assets are borrowed against). The government doesn't give free money to a company which can never afford to repay it while equity sponsors retains control? That's not how finance works!

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