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USAirKid
Posts: 623
Joined: Mon Jun 13, 2016 5:42 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 12:50 am

RetroRoo wrote:
Here's a great piece on why the Australian government isn't racing to bail out Virgin Australia before this period of administration: https://www.smh.com.au/politics/federal ... 54ljq.html


I agree with this. As a citizen of the US, I was annoyed that we bailed out the automobile companies without forcing them to file bankruptcy first. (Banks cannot file bankruptcy in the US.) I'd think that the Australian federal and state governments could buy VA out of administration or something of the like, forcing the bondholders and shareholders to eat the losses they were already about ready to eat.
 
Sydscott
Posts: 3513
Joined: Thu Oct 30, 2003 11:50 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 12:58 am

FSDan wrote:
BNEFlyer wrote:
VA have announced they've gone into Voluntary Administration. They're not in liquidation, they haven't collapsed, no one has lost their job today, planes are still flying, Velocity points and travel bank credits are still there to be used.


For those of us not familiar with the Australian system, is Voluntary Administration similar to U.S. Chapter 11? Have any airlines previously gone through this process and emerged successful on the other side?


Australia doesn't have an equivalent to Chapter 11 Bankruptcy.

The Australian process of appointing an Administrator to a business is the first official step in re-structuring. Effectively the appointment of an Administrator means that the Company can delay payments to Creditors etc and it buys them breathing time that they wouldn't otherwise get to do a deal with Creditors / secure new funding.

https://gettingthedealthrough.com/area/ ... australia/ scroll down to Voluntary Administration which explains it quite well.

The most recent Australian example of a business to emerge from Administration is Channel 10 which was re-capitalised and acquired by CBS.

The biggest thing here will be for the Administrator to do a deal with the Companies Creditors. It is they who will emerge as the largest shareholders in any new business along with anyone other investors who want to offer $$$.
 
benjjk
Posts: 388
Joined: Fri Aug 08, 2014 4:29 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 1:55 am

Blerg wrote:
If Qantas is left as the only domestic player, why not cap the price of tickets?


Imposing a fare cap can actually increase the average fare cost, because the discounted sales go away to make up the shortfall. They tried it in Indonesia: https://www.reuters.com/article/us-indo ... SKCN1U6031
 
benjjk
Posts: 388
Joined: Fri Aug 08, 2014 4:29 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 2:01 am

Watching the press conferences this morning from the government and VA, they are definitely pushing a positive message. The administrator said there are over 10 parties who have expressed an interest in a possible takeover. He said they wouldn't have a solid plan for 2-3 months, so presumably they will keep flying their (very limited) network until then?

I think there will still be an airline left after this - clearly there needs to be big changes, and it's a terrible time for the employees - but I think there is still something to hold on to.
 
ABpositive
Posts: 201
Joined: Mon Nov 07, 2005 2:36 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 2:19 am

Would there be an synergies between REX and a new Virgin establishing an alliance, so that the new Virgin can focus on profitable routes and code-share on the regional routes where it has been loosing money, at the same time being a feeder for REX?
 
NZ516
Posts: 424
Joined: Thu Aug 29, 2019 12:21 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 3:11 am

zkncj wrote:

And its sad to think again SQ and NZ we're both involved in the current mess, although at-least NZ jumped sold its close to 30% two years ago and got out while they could walk away with some cash from the saga.

For a good couple of years recently NZ was the as the largest share-hold in VA, until they sold their shares to Chinese investors.

It's been an mess of an airline for years NZ,SQ,EH we're not the best mix of shareholders to have around the board table, NZ want VA to be an LCC and follow its on LCC styled product on short-haul. EH/SQ want to VA to be an full service an compete with QF.

VA or as it was then DJ did pretty well as an LCC, until they started to go up market an compete with Qantas.


Air NZ didn't gain any cash from the saga at all. They sold their shares in VA for a substantial loss over $100 million. Along with having to fund their share of VAs annual operating losses amounted to over another $100 million while it had its stake in VA. So lucky they cut their loses and ran while they did and not throw more money down the drain by holding onto their investment in VA any longer.
 
eamondzhang
Posts: 1731
Joined: Thu Sep 23, 2010 8:23 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 3:22 am

zkncj wrote:
That awkward moment when the Chief Revenue Officer of NZ was farewelling VA on twitter already, pre any offical announcements.

"A very sad day for the people @VirginAustralia and also for Australasian tourism. @FlyAirNZ
has been competitors, JV partners and shareholders over the past decade. We always had constructive engagement with leaders like Judith C, Rob S, Jane Mc and many other classy people https://twitter.com/CamWallace_NZ/status/1252311373368844288


I'm guessing they we're given an heads up last night, and maybe an offered an last minute deal?

It's all over Australian media as of 5pm last night about VA's immitment administration so nothing surprising.

Michael
 
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SCFlyer
Posts: 578
Joined: Tue Oct 23, 2018 11:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 3:53 am

https://www.executivetraveller.com/news ... -the-table

Including the obvious stuff such as reduced fleet, most firms had varying "domestic-only" proposals such as 1-class LCC, 1-class Hybrid, and the odd proposal or two had a 2-class domestic carrier with only one international destination (usually LAX or AKL).

Scurrah who will remain CEO during the administration has not ruled out "limited" international flying (e.g VAi will be gutted - but what form it'll take - whether if it's axed entirely, or reduced to one, maybe two destinations is yet to be seen).
 
Gemuser
Posts: 5079
Joined: Mon Nov 24, 2003 12:07 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:16 am

NTLDaz wrote:
Gemuser wrote:
Blerg wrote:
If Qantas is left as the only domestic player, why not cap the price of tickets?

Because the Australian Government does NOT have the power to fix prices! That power is reserved to the states and it is debatable if the state governments can use that power to directly control interstate airfares.

Gemuser


IMO it would.be almost impossible for State governments to control fares between states. Has High Court challenge written all over it.


You are probably right but for all its simple wording Sec 92 is the most ligatgated section of the constitution, there are some twists & turns in that story. thats why I said its "debatable"

gemuser
 
zkncj
Posts: 3816
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Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:25 am

SCFlyer wrote:
https://www.executivetraveller.com/news/virgin-australia-mk-ii-everything-is-on-the-table

Including the obvious stuff such as reduced fleet, most firms had varying "domestic-only" proposals such as 1-class LCC, 1-class Hybrid, and the odd proposal or two had a 2-class domestic carrier with only one international destination (usually LAX or AKL).

Scurrah who will remain CEO during the administration has not ruled out "limited" international flying (e.g VAi will be gutted - but what form it'll take - whether if it's axed entirely, or reduced to one, maybe two destinations is yet to be seen).


In some sense the Virgin Blue LCC model, should be able to work on the Tasman and make an profit (just look at how bad of an product NZ offers on the Tasman).

Would be good see VA MK2 keep some form of Tasman flying, that targets the non business travel market.

I’ve always found BNE-AKL to have an reasonable load on VA, but then I’ve been on AKl-SYD flights with 30-40 people on them.

An daily BNE-AKL-OOL-AKL-BNE run should an profit maker if they went after the LCC market.
 
Kiwirob
Posts: 12856
Joined: Mon Jun 13, 2005 2:16 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:28 am

Breathe wrote:
ben175 wrote:
Kiwirob wrote:

It’s not really a horrible day, it’s been expected for the better part of the last decade, eventually the money tap was going to turned off.


It's a damn horrible day for the 10,000+ staff members who will probably wake up unemployed.

I was about to say the same thing.

Terrible news for all the staff.


Granted it was but you’d have to be a pretty ignorant staff member to not see this coming.
 
Sydscott
Posts: 3513
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Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:33 am

zkncj wrote:
SCFlyer wrote:
https://www.executivetraveller.com/news/virgin-australia-mk-ii-everything-is-on-the-table

Including the obvious stuff such as reduced fleet, most firms had varying "domestic-only" proposals such as 1-class LCC, 1-class Hybrid, and the odd proposal or two had a 2-class domestic carrier with only one international destination (usually LAX or AKL).

Scurrah who will remain CEO during the administration has not ruled out "limited" international flying (e.g VAi will be gutted - but what form it'll take - whether if it's axed entirely, or reduced to one, maybe two destinations is yet to be seen).


In some sense the Virgin Blue LCC model, should be able to work on the Tasman and make an profit (just look at how bad of an product NZ offers on the Tasman).

Would be good see VA MK2 keep some form of Tasman flying, that targets the non business travel market.

I’ve always found BNE-AKL to have an reasonable load on VA, but then I’ve been on AKl-SYD flights with 30-40 people on them.

An daily BNE-AKL-OOL-AKL-BNE run should an profit maker if they went after the LCC market.


New Zealand, Bali and the Pacific Islands would be the core routes for a re-born Virgin if you're talking international. Anything that can be done with a 737 effectively.

For domestic they'd be wise to centralise around the 737 again. The A330's are all leased and realistically, given what Virgin was doing with them pre-Covid aren't necessary for a domestic focused operation. The 777 is a harder problem. VAI was onto a good thing with Delta on the Pacific so that provides some hope for the 77W fleet. The alternative, a tie-up with Star Alliance and United, would mean the same. So either way there is potentially room for the 77W if the business plan that emerges envisages maintaining US services which by all accounts were profitable or at least paying their way.
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:43 am

Sydscott wrote:
zkncj wrote:
SCFlyer wrote:
https://www.executivetraveller.com/news/virgin-australia-mk-ii-everything-is-on-the-table

Including the obvious stuff such as reduced fleet, most firms had varying "domestic-only" proposals such as 1-class LCC, 1-class Hybrid, and the odd proposal or two had a 2-class domestic carrier with only one international destination (usually LAX or AKL).

Scurrah who will remain CEO during the administration has not ruled out "limited" international flying (e.g VAi will be gutted - but what form it'll take - whether if it's axed entirely, or reduced to one, maybe two destinations is yet to be seen).


In some sense the Virgin Blue LCC model, should be able to work on the Tasman and make an profit (just look at how bad of an product NZ offers on the Tasman).

Would be good see VA MK2 keep some form of Tasman flying, that targets the non business travel market.

I’ve always found BNE-AKL to have an reasonable load on VA, but then I’ve been on AKl-SYD flights with 30-40 people on them.

An daily BNE-AKL-OOL-AKL-BNE run should an profit maker if they went after the LCC market.


New Zealand, Bali and the Pacific Islands would be the core routes for a re-born Virgin if you're talking international. Anything that can be done with a 737 effectively.

For domestic they'd be wise to centralise around the 737 again. The A330's are all leased and realistically, given what Virgin was doing with them pre-Covid aren't necessary for a domestic focused operation. The 777 is a harder problem. VAI was onto a good thing with Delta on the Pacific so that provides some hope for the 77W fleet. The alternative, a tie-up with Star Alliance and United, would mean the same. So either way there is potentially room for the 77W if the business plan that emerges envisages maintaining US services which by all accounts were profitable or at least paying their way.



I wouldn't be shocked if we saw all planes sold off to pay bond holders (so they get full ownership not some bondholder equity) and the new Airline owner is given a chance to create their own fleet especially given the fact that there will be no shortage of aircraft available.
 
zkncj
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Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:45 am

Has anyone had any luck with credit card charge backs for canceled Virgin Australia flights? and now that Virgin Australia is voluntary administration, would they be an better chance of these getting credited by the credit card providers?

I've got an bunch of booking by Virgin Australia Christchurch NZL on my credit card, that they refused to refund for flights VA is no longer operating
https://www.consumer.org.nz/articles/credit-card-chargebacks
 
fkfnz
Posts: 18
Joined: Fri Jun 19, 2015 1:51 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 4:59 am

zkncj wrote:
Has anyone had any luck with credit card charge backs for canceled Virgin Australia flights? and now that Virgin Australia is voluntary administration, would they be an better chance of these getting credited by the credit card providers?


I've currently got a claim in with my CC provider, should hear something back in the next few days. It's only around $1600NZ but given there were previously only 3 VA flights a week to my nearest airport, and probably zero anytime soon, a travel credit isn't going to be useful to me.
 
zkncj
Posts: 3816
Joined: Wed Nov 09, 2005 4:57 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 5:00 am

fkfnz wrote:
zkncj wrote:
Has anyone had any luck with credit card charge backs for canceled Virgin Australia flights? and now that Virgin Australia is voluntary administration, would they be an better chance of these getting credited by the credit card providers?


I've currently got a claim in with my CC provider, should hear something back in the next few days. It's only around $1600NZ but given there were previously only 3 VA flights a week to my nearest airport, and probably zero anytime soon, a travel credit isn't going to be useful to me.


Was this within 30days of the credit card statement?
 
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qf2220
Posts: 1947
Joined: Fri Aug 16, 2013 9:16 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 5:30 am

PANAMsterdam wrote:
I'm stunned by the unwillingness of the Australian government to help Virgin, reminds me of Ansett's demise. I admit that both companies weren't doing great before their respective major crises (9/11 and Covid19) but leaving the entire Australian aviation market in the hands of Qantas is not a very great competitive way of doing business.


The unwillingness of the current shareholders to invest more should temper your stunnedness....
 
NTLDaz
Posts: 465
Joined: Sun Aug 21, 2011 7:56 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 5:51 am

Gemuser wrote:
NTLDaz wrote:
Gemuser wrote:
Because the Australian Government does NOT have the power to fix prices! That power is reserved to the states and it is debatable if the state governments can use that power to directly control interstate airfares.

Gemuser


IMO it would.be almost impossible for State governments to control fares between states. Has High Court challenge written all over it.


You are probably right but for all its simple wording Sec 92 is the most ligatgated section of the constitution, there are some twists & turns in that story. thats why I said its "debatable"

gemuser


It is shockingly worded if one is after certainty that's for sure with all the talk of intercourse. In the unfortunate event of QF group having a monopoly it wouldn't shock me to see intra state fares regulated.
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 6:53 am

I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?
 
dredgy
Posts: 488
Joined: Fri Jun 16, 2017 5:13 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 7:09 am

swissair111 wrote:
BNEFlyer wrote:
VA have announced they've gone into Voluntary Administration. They're not in liquidation, they haven't collapsed, no one has lost their job today, planes are still flying, Velocity points and travel bank credits are still there to be used.

It would be great if people didn't take such joy in seeing VA go through what they are, and essentially try to will them into collapsing. They won't. They might look different at the end but they'll still be around. And you can guarantee that if it was QF in this position, the language being used and the tone of peoples posts (on every forum/group) would be very different.


Agreed-this is a necessary step to sort out the shareholders who won’t provide further funds.
Two points to note-first administration enables the administrator to disclaim onerous contracts,which includes the aircraft leases and the licence to use the Virgin name.Second,if the airline can emerge from administration,it is almost certain it will be renamed-why pay Branson a licence fee?Could we see the rebirth of Australian National Airways?


I think it’s probably not a stupid idea to keep the name, public sentiment towards Virgin is pretty positive but I also don’t know wha the license fees are. If it was to change it would be something new, Australiair or something like that.
 
tullamarine
Posts: 2485
Joined: Thu Aug 05, 1999 1:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 7:11 am

Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?

They have slightly different goals but they do intersect. Scurrah wants the best outcome for his business and for his employees. By definition, Deloittes wants the best outcome for the business but it also has to maximise the return for the creditors. Chances are, finding a buyer will produce a much better outcome for creditors than liquidation which at the same time coincides with Scurrah's goals.
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tullamarine
Posts: 2485
Joined: Thu Aug 05, 1999 1:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 7:14 am

dredgy wrote:
swissair111 wrote:
BNEFlyer wrote:
VA have announced they've gone into Voluntary Administration. They're not in liquidation, they haven't collapsed, no one has lost their job today, planes are still flying, Velocity points and travel bank credits are still there to be used.

It would be great if people didn't take such joy in seeing VA go through what they are, and essentially try to will them into collapsing. They won't. They might look different at the end but they'll still be around. And you can guarantee that if it was QF in this position, the language being used and the tone of peoples posts (on every forum/group) would be very different.


Agreed-this is a necessary step to sort out the shareholders who won’t provide further funds.
Two points to note-first administration enables the administrator to disclaim onerous contracts,which includes the aircraft leases and the licence to use the Virgin name.Second,if the airline can emerge from administration,it is almost certain it will be renamed-why pay Branson a licence fee?Could we see the rebirth of Australian National Airways?


I think it’s probably not a stupid idea to keep the name, public sentiment towards Virgin is pretty positive but I also don’t know wha the license fees are. If it was to change it would be something new, Australiair or something like that.

Rebranding is also expensive from both branding/livery changes as well as building awareness of a new brand. Getting a licensing discount from SRB may be the cheaper outcome
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sierrakilo44
Posts: 331
Joined: Tue Dec 13, 2011 1:38 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 7:27 am

Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?


Refocus on the core aspects of the business. Go back to a hybrid carrier that it was as Virgin Blue not Qantas lite which John Borghetti tried to turn it into when he got passed over for the top job at QF in favour of Alan Joyce. Two full sized premium airline groups will never work in a country as small as Australia.
They've already done something right by winding up Tigerair.
30-40 737's running core capital city routes. Australian domestic market is the profitable one. It's boring flying only Syd-Mel-Bne-Per but that's where the money is made.
Get rid of the ATRs. Regional routes aren't as profitable
Get rid of the 777s
Get rid of the 330s
Cancel (or at least defer) the MAX orders until the core operation is profitable again.
Get rid of premium classes for the time being.
Stop International flying with the exception of trans tasman flying if it's profitable.

Once the core business is profitable again for several years then consider branching out into some more short haul regional flying or consider replacing or supplementing the 738s with 737 MAX but again ONLY after the core business is profitable.

And of course rebrand to stop having to pay the bearded one $100m per year in licencing fees. Something uniquely Australian again. Suggestions?:
Ansett
Compass Mk 3
ANA (Australian National Airways)?
Australian Airlines?
V Australia?
Ozjet?
Air Australia?

I'm not too creative so maybe others can come up with better names.
 
Gemuser
Posts: 5079
Joined: Mon Nov 24, 2003 12:07 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 7:40 am

NTLDaz wrote:
Gemuser wrote:
NTLDaz wrote:

IMO it would.be almost impossible for State governments to control fares between states. Has High Court challenge written all over it.


You are probably right but for all its simple wording Sec 92 is the most ligatgated section of the constitution, there are some twists & turns in that story. thats why I said its "debatable"

gemuser


It is shockingly worded if one is after certainty that's for sure with all the talk of intercourse. In the unfortunate event of QF group having a monopoly it wouldn't shock me to see intra state fares regulated.

It is exactly and precisely worded for the intension of the time, ie there were to be NO barries between the states in any area! One meaning of intercourse refers to "conversation and social activity between people" although it has been drowned out in the last 50/60 years by the sexual meaning. Remember our constitution was written between 1890 & 1898, so over about 130 years ago when the social activity definision was the one in regular use. But even with that intension there has still been some twisting around over the words.

In this line: "event of QF group having a monopoly it wouldn't shock me to see intra state fares regulated" I assume you ment inter state airfares. Intra state airfares were regulated in many states well in to the 1990 and still are but by means of subsidy contracts.

Gemuser
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:01 am

Big update: https://www.smh.com.au/business/compani ... 54lv1.html

Most interesting line "Budget airline group Arizona-based Indigo Partners is another speculated to have registered "

Second most interesting line "although according to insiders this number has swollen closer to 20 as new expressions of interest came through on Monday night. Although a portion will be tyre kickers, the level of confidence displayed by Strawbridge about finding a suitable bid was unusually high for day one of corporate administration."
Last edited by Morrofinch on Tue Apr 21, 2020 8:09 am, edited 1 time in total.
 
Arniepie
Posts: 1454
Joined: Thu Aug 04, 2005 11:00 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:07 am

The aviation market worldwide shrunk so much the past couple of months that supporting companies with government money
won't make any kind of sense.
If they are afraid of a monopolized market there are other things they can do.
For instance, pull Jetstar out of the QF group and make it an independent company and let it compete with QF.
They have a sizeable modern narrowbody fleet and a limited but modern widebody fleet that might be economical enough to run profitably.
That way you keep competition alive in Australia, you don't have to spend billions to keep a private company alive and you trim total
capacity on the market enough to keep 2 viable companies.
Maybe Tigerair might make it too restarting with a 20-30 narrowbody fleet pulling the best 737's out of virgin.
[edit post]
 
sierrakilo44
Posts: 331
Joined: Tue Dec 13, 2011 1:38 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:21 am

Arniepie wrote:
The aviation market worldwide shrunk so much the past couple of months that supporting companies with government money
won't make any kind of sense.
If they are afraid of a monopolized market there are other things they can do.
For instance, pull Jetstar out of the QF group and make it an independent company and let it compete with QF.
They have a sizeable modern narrowbody fleet and a limited but modern widebody fleet that might be economical enough to run profitably.
That way you keep competition alive in Australia, you don't have to spend billions to keep a private company alive and you trim total
capacity on the market enough to keep 2 viable companies.
Maybe Tigerair might make it too restarting with a 20-30 narrowbody fleet pulling the best 737's out of virgin.


First off who is "they" who will force QF to sell off Jetstar and compete against it? The current Australian government is totally anti market intervention (hence why they aren't supporting VA) and AJ will fight tooth and nail to not let his baby go if they tried it. JQ survives in a way in it's relationship with QF. The JQ International operation is unprofitable and they were looking at selling the 787s to begin with.
It's far more likely for just the QF group to survive with a scaled down VA for competition on core routes.
 
anstar
Posts: 3264
Joined: Sun Nov 23, 2003 3:49 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:32 am

Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?


Go back to being a 737 only operator. Focus on Aus domestic which is profitable and drop the Virgin licensing. Potentially rebrand to Velocity Airways or something that has some brand resemblance without the huge fees. What you save on licensing fees in 6 months will pay for the rebrand.
 
DanielK
Posts: 139
Joined: Sat Dec 17, 2016 7:33 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:38 am

Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?

- Sell all ATR 72s
- Sell all Airbus A330-200s
- Sell all Boeing 777-300ERs
- Remove all Boeing 737-800s which are leased, (Boeing 737-800s which are owned will remain)
- Cancel all Boeing 737-800 MAX orders
- Rename away from Virgin branding

I would also drop all international services, focusing on operating key domestic routes which are profitable.
 
tullamarine
Posts: 2485
Joined: Thu Aug 05, 1999 1:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:45 am

And of course rebrand to stop having to pay the bearded one $100m per year in licencing fees. Something uniquely Australian again. Suggestions?:

We've had this furphy before. The annual licensing fee was $10M, not a small amount but a long way from $100M.

I'd sell all ATR 72s, Airbus A330-200s and Boeing 777-300ERs. Also get rid of all their leased Boeing 737-800s, which leaves them with only Boeing 737-800s which they "own". I'd also remove all international services, and only focus on key domestic routes which can earn profits. Maybe also a rebranding of naming too.

The A330s and ATRs are leased not owned. There is no market for secondhand 77Ws at the moment and won't be for years with lots more for sale than there are buyers. Realistically the 77Ws will either be used for a continuing LAX operation or parked in the desert.
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QF742
Posts: 200
Joined: Sat Aug 18, 2018 1:00 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:52 am

Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?


If I was Scurrah (not so much Deloitte) I would:
- get rid of the A330s
- if LAX is profitable with DL JV then I would deploy the 77Ws to MEL and BNE and let DL do SYD (or any other variation such that they only have combined 3 daily to control yield and possibly remove leased 77Ws)
- cut all non profitable international routes and probably those that are break even
- scrap tiger and VARA (but possibly keep some sort of separate AOC to run mining charters, if profitable)
- remove as many leased 738s
- with the remaining 738s keep to core domestic business and leisure routes
- slowly convert to 1 class with some economy extra seats at the front
- create a consist product for baggage, food and beverage etc that is cost effective

Then I would just go on a general crusade to reduce costs wherever possible in a manner that keeps a good brand, but not one that is burdened with huge overheads.

Once that’s under control, I would spend money on retaining or hiring good people and spend on creating a brand that adds value, is unique and finds its own place in the Australian aviation sector.
 
Sparker
Posts: 32
Joined: Tue Jan 30, 2018 11:54 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 8:58 am

Gemuser wrote:
NTLDaz wrote:
Gemuser wrote:
Because the Australian Government does NOT have the power to fix prices! That power is reserved to the states and it is debatable if the state governments can use that power to directly control interstate airfares.

Gemuser


IMO it would.be almost impossible for State governments to control fares between states. Has High Court challenge written all over it.


You are probably right but for all its simple wording Sec 92 is the most ligatgated section of the constitution, there are some twists & turns in that story. thats why I said its "debatable"

gemuser


The Commonwealth absolutely can regulate prices, and does so in many contexts - health insurance premiums, fixed line telecommunications, and the just-announced rules on online advertising fees for news sites. Price controls can be challenged on s 92 grounds, but they are lawful in many cases - especially where it relates to the regulation of a monopoly.
 
UAL777UK
Posts: 2367
Joined: Sun Nov 20, 2005 1:16 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:07 am

Really sad news to wake up to this but why am I not surprised. The company has been bleeding money for years and these unprecedented times are picking off companies of this ilk (ala Flybe over here) who have not been making money for years as a result of poor management. I really hope they can rise again and a lot of jobs are saved but i fear its going to get worse before it gets better.
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:22 am

JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.
 
Flyingsottsman
Posts: 798
Joined: Mon Oct 25, 2010 12:32 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:23 am

Its a sad day for the employees of VA, great airline friendly FA's yes badly ran through the JB years. I don't know the ins and outs or running a business let alone an airline but by a lot of the posts on here seems like a lot of people are glad that VA is going down. Going by the news tonight it sounds like they are not gone yet, saw an interview on Sky News this afternoon with Kerin Gibert interviewing PS and he was saying that they will reorganise and come out a smaller airline. There is a thread about Delta doing the same thing, so lets hope that VA can survive this, if they come out a smaller airline so be it at least they will still be flying. The thing I fear is a Qantas monopoly putting airfares out of reach of Australian family's going back to being Sydney centric. As I type this I am watching an interview with Paul Scurrah on A Current Affair and he is confident that they will be flying again although a lot smaller but will be flying, and lets hope so. I really don't think a QF/JQ monopoly for the Australia flying public is or would be a god thing.
 
User avatar
SCFlyer
Posts: 578
Joined: Tue Oct 23, 2018 11:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:24 am

Morrofinch wrote:
JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.


What source or news show?
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:25 am

SCFlyer wrote:
Morrofinch wrote:
JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.


What source or news show?


ABC Radio
 
Morrofinch
Posts: 71
Joined: Mon Feb 11, 2019 5:15 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:25 am

Flyingsottsman wrote:
Its a sad day for the employees of VA, great airline friendly FA's yes badly ran through the JB years. I don't know the ins and outs or running a business let alone an airline but by a lot of the posts on here seems like a lot of people are glad that VA is going down. Going by the news tonight it sounds like they are not gone yet, saw an interview on Sky News this afternoon with Kerin Gibert interviewing PS and he was saying that they will reorganise and come out a smaller airline. There is a thread about Delta doing the same thing, so lets hope that VA can survive this, if they come out a smaller airline so be it at least they will still be flying. The thing I fear is a Qantas monopoly putting airfares out of reach of Australian family's going back to being Sydney centric. As I type this I am watching an interview with Paul Scurrah on A Current Affair and he is confident that they will be flying again although a lot smaller but will be flying, and lets hope so. I really don't think a QF/JQ monopoly for the Australia flying public is or would be a god thing.


The size of the airline depends on the buyer. Scurrah and the board has been reported to favour a bigger airline owner as they are more likely to keep VA at a larger size than say Westfarmers.
 
Flyingsottsman
Posts: 798
Joined: Mon Oct 25, 2010 12:32 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:26 am

Morrofinch wrote:
JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.


Lets hope! ANA had their problems a few years back and got through it , they would have to be much better than the Etihad/Singapore/HNA partners.
 
User avatar
PepeTheFrog
Posts: 389
Joined: Mon Dec 16, 2019 10:38 pm

Virgin Australia to rejig 737 MAX order

Tue Apr 21, 2020 9:32 am

As Virgin Australia goes into administration, the next subject of debate is its 737 MAX order:

Virgin Australia will revisit its orders for the Boeing 737 MAX as the airline seeks to right-size itself out of administration and back into the air.

Virgin has signed up for 25 of the top-end 737 MAX 10 with deliveries from July 2021, and 23 of the entry-level 737 MAX 8s from February 2025, in a deal worth US$6.17 billion at current list prices – although airlines typically enjoy a steep discount of 40-60%.


Full story @ Virgin Australia rethinks Boeing 737 MAX
Good moaning!
 
User avatar
SCFlyer
Posts: 578
Joined: Tue Oct 23, 2018 11:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:33 am

I would guess ANA would want VAH to keep the HND slot 'if' that reported rumor eventuates.

Trans-Pacific would be another issue entirely if NH emerges as (one) of the post-administration 'VA mk II' owners. VA's current JV partner and 'best-bud' DL are currently co-operating on that corridor.

NH are best buds with UA (and both are in the same global alliance), and as we know all of the US3 (AA, DL and UA) are looking at downsizing post-COVID 19, which includes their international operations.
 
zkncj
Posts: 3816
Joined: Wed Nov 09, 2005 4:57 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 9:40 am

Morrofinch wrote:
JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.


Finally VA to join *A...... :D
Morrofinch wrote:
The size of the airline depends on the buyer. Scurrah and the board has been reported to favour a bigger airline owner as they are more likely to keep VA at a larger size than say Westfarmers.


Wesfarmers aren’t shy on big box retail, just trying to image what Coles Air, Bunnings Airways or Air Kmart would be like to fly with....
 
ABpositive
Posts: 201
Joined: Mon Nov 07, 2005 2:36 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 10:00 am

zkncj wrote:

Wesfarmers aren’t shy on big box retail, just trying to image what Coles Air, Bunnings Airways or Air Kmart would be like to fly with....


Maybe not such a bad idea, use the flights as a new retail outlet with a captive audience and unify reward programs!
 
Gemuser
Posts: 5079
Joined: Mon Nov 24, 2003 12:07 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 10:05 am

Sparker wrote:
Gemuser wrote:
NTLDaz wrote:

IMO it would.be almost impossible for State governments to control fares between states. Has High Court challenge written all over it.


You are probably right but for all its simple wording Sec 92 is the most ligatgated section of the constitution, there are some twists & turns in that story. thats why I said its "debatable"

gemuser


The Commonwealth absolutely can regulate prices, and does so in many contexts - health insurance premiums, fixed line telecommunications, and the just-announced rules on online advertising fees for news sites. Price controls can be challenged on s 92 grounds, but they are lawful in many cases - especially where it relates to the regulation of a monopoly.

Belive it or not those are not regulated prices, in all case I know of they are fixed by agreement [with the Government having a big stick of somekind]. Exactly how depends on the specific sitution. health funds are controlled by the amount of subsidy, keep your preimums to $X for you to qualifyfor $Y subsidy. Legally that's not price control that is contract provisions.
It hard to imagine something like that working for air fares, but who knows?

Gemuser
 
User avatar
SCFlyer
Posts: 578
Joined: Tue Oct 23, 2018 11:14 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 10:20 am

Westfarmers (Coles) and Macquarie Group reported to throw their hats in the ring for VAH.

https://www.smh.com.au/business/compani ... 54lv1.html
 
BNEFlyer
Posts: 245
Joined: Fri Oct 27, 2006 6:41 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 10:34 am

DanielK wrote:
Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?

- Sell all ATR 72s
- Sell all Airbus A330-200s
- Sell all Boeing 777-300ERs
- Remove all Boeing 737-800s which are leased, (Boeing 737-800s which are owned will remain)
- Cancel all Boeing 737-800 MAX orders
- Rename away from Virgin branding

I would also drop all international services, focusing on operating key domestic routes which are profitable.

So you would shut down the airline then?
 
BNEFlyer
Posts: 245
Joined: Fri Oct 27, 2006 6:41 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 10:37 am

zkncj wrote:
Has anyone had any luck with credit card charge backs for canceled Virgin Australia flights? and now that Virgin Australia is voluntary administration, would they be an better chance of these getting credited by the credit card providers?

I've got an bunch of booking by Virgin Australia Christchurch NZL on my credit card, that they refused to refund for flights VA is no longer operating
https://www.consumer.org.nz/articles/credit-card-chargebacks

I would expect a chargeback to be knocked back. VA have offered travel bank credits for non-cancellable/refundable fares that can be used within 12 months. While they haven't provided the flight you booked, they're offering an alternative.
 
NiuginiF28
Posts: 2
Joined: Tue Apr 21, 2020 10:21 am

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 11:01 am

Thoughts are with the Virgin Australia employees at this time, I am sure Virgin Australia will come out of this stronger. Have to admit, Paul Scurrah seems like the right person to get the business through this - I wonder how AJ or JB would handle a similar situation?

The term 'full service airline' get thrown around a lot on here but what really is the definition in this age? To me, a full service airline is a carrier which offers higher frequencies, has a frequent flyer program, offers the ability to book/check-in/tag bags for connecting flights, has some lounges, on-board WiFi, and maybe business class on certain routes. Based on this, I don't understand the rubbish about Australia not having room for two full service carriers. Seemed like VA domestic was actually making some money there...

PXF28.
 
cam747
Posts: 68
Joined: Thu Sep 15, 2011 12:25 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 11:16 am

sierrakilo44 wrote:
Morrofinch wrote:
I have a question for everyone. If you were in Scurrah/Deloitte shoes, which direction would you take?


Refocus on the core aspects of the business. Go back to a hybrid carrier that it was as Virgin Blue not Qantas lite which John Borghetti tried to turn it into when he got passed over for the top job at QF in favour of Alan Joyce. Two full sized premium airline groups will never work in a country as small as Australia.
They've already done something right by winding up Tigerair.
30-40 737's running core capital city routes. Australian domestic market is the profitable one. It's boring flying only Syd-Mel-Bne-Per but that's where the money is made.
Get rid of the ATRs. Regional routes aren't as profitable
Get rid of the 777s
Get rid of the 330s
Cancel (or at least defer) the MAX orders until the core operation is profitable again.
Get rid of premium classes for the time being.
Stop International flying with the exception of trans tasman flying if it's profitable.

Once the core business is profitable again for several years then consider branching out into some more short haul regional flying or consider replacing or supplementing the 738s with 737 MAX but again ONLY after the core business is profitable.

And of course rebrand to stop having to pay the bearded one $100m per year in licencing fees. Something uniquely Australian again. Suggestions?:
Ansett
Compass Mk 3
ANA (Australian National Airways)?
Australian Airlines?
V Australia?
Ozjet?
Air Australia?

I'm not too creative so maybe others can come up with better names.


The licensing fee to “the bearded one” is between $10-$15m per year.
 
User avatar
VirginFlyer
Posts: 5574
Joined: Sun Sep 10, 2000 12:27 pm

Re: Virgin Australia to enter voluntary administration

Tue Apr 21, 2020 12:08 pm

Morrofinch wrote:
JUST IN: It has been reported that NH is the preferred choice by Scurrah and the board.

Back to the future in a weird way with the name ANA...



V/F
It is not for him to pride himself who loveth his own country, but rather for him who loveth the whole world. The earth is but one country, and mankind its citizens. —Bahá'u'lláh
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