Virgin Australia to enter voluntary administration

NYCVIE · Mon Apr 20, 2020 3:17 pm

After failing to secure funding from the government, VA is expected to announce it will enter voluntary administration tomorrow morning after the board had an emergency meeting to determine VA's future. It doesn't necessarily mean the airline will not fly again, but the future is bleak with the airline's shareholders refusing to fund it further.

Sad news....

https://news.yahoo.com/virgin-australia ... 55106.html

ben175 · Mon Apr 20, 2020 3:35 pm

Really horrible day for Australian aviation. Hoping there may be some light at the end of the tunnel, I have many friends who are proud VA workers that are incredibly sad to see this happen.

PANAMsterdam · Mon Apr 20, 2020 3:45 pm

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.

chonetsao · Mon Apr 20, 2020 3:49 pm

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.

I don't think that will be true. When Virgin fail, there would be another airline coming to life in Australian market later when condition is right. Whether it is supported by SQ or another sovereign fund remain to be seen. But, monopoly in a country the size of Australia create chances for smaller and new entrant. Plus, with so many second hand aircrafts around, it will be really cost competitive to set up a new airline.

ben175 · Mon Apr 20, 2020 3:51 pm

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 main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

Westerwaelder · Mon Apr 20, 2020 3:53 pm

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.

As sad as this is for the employees, aviation is only one of many industries heavily impacted by Covid-19. If Virgin had any meaningful collateral against which to make a loan, the situation would be different. As it is, providing an unsecured loan to a business already in trouble before this crisis just makes no sense. Not for the Australian government. Not for any government. Clearly none of the shareholders view it as a reasonable investment either (I know, the airline shareholders need to shore up their own finances but if you dig a bit deeper, SQ has just secured a massive cash boost for itself...)

gdg9 · Mon Apr 20, 2020 3:56 pm

I don't see why the Australian government, or any government, would bail out an airline that was majority foreign owned?

PANAMsterdam · Mon Apr 20, 2020 3:58 pm

ben175 wrote:
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 main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

Named: Virgin Ansett Australian Airlines :bigthumbsup:

Yeah, it's true that Virgin is 90% owned by foreign companies, but over 10.000 people would lose their jobs and I assume most of those 10.000 folks are Australians. This is a cry for help due to an unprecedented crisis. Corona is not something you can blame Virgin for of course

Edit: also, local governments of Australia were willing to help (see article), but only A$200m not the A$1.4b Virgin asked for from the federal government.

ben175 · Mon Apr 20, 2020 4:02 pm

PANAMsterdam wrote:
ben175 wrote:
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 main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

Named: Virgin Ansett Australian Airlines

Yeah, it's true that Virgin is 90% owned by foreign companies, but over 10.000 people would lose their jobs and I assume most of those 10.000 folks are Australians. This is a cry for help due to an unprecedented crisis. Corona is not something you can blame Virgin for of course

Edit: also, local governments of Australia were willing to help (see article), but only A$200m not the A$1.4b Virgin asked for from the federal government.

Virgin is definitely not to blame for corona, but unfortunately the airline was already floundering before this pandemic.

JCK98 · Mon Apr 20, 2020 4:13 pm

ben175 wrote:
The main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

A Virgin Blue if you will.

MIflyer12 · Mon Apr 20, 2020 4:20 pm

gdg9 wrote:
I don't see why the Australian government, or any government, would bail out an airline that was majority foreign owned?

For competition, and to minimize job losses.

MIflyer12 · Mon Apr 20, 2020 4:29 pm

chonetsao wrote:
When Virgin fail, there would be another airline coming to life in Australian market later when condition is right.

The conditions aren't ever going to be right. It's a relatively small, geographically isolated domestic market with a lot of geographical dispersion - it's worse than Canada, which in spite of prosperity, stability, and a very large market next door hasn't really been able to support even two full national carriers.

https://data.worldbank.org/indicator/is ... _desc=true

eta unknown · Mon Apr 20, 2020 4:32 pm

PANAMsterdam wrote:
ben175 wrote:
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 main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

Named: Virgin Ansett Australian Airlines

Yeah, it's true that Virgin is 90% owned by foreign companies, but over 10.000 people would lose their jobs and I assume most of those 10.000 folks are Australians. This is a cry for help due to an unprecedented crisis. Corona is not something you can blame Virgin for of course

Edit: also, local governments of Australia were willing to help (see article), but only A$200m not the A$1.4b Virgin asked for from the federal government.

Your govt. assistance argument ignores VA's $5B debt. That is another piece of the puzzle. Then imagine the optics- how will the govt. keep QF happy as they will say "you bailed out our competitor to compete against us".
Secondly, the govt. always said no one particular company will receive assistance (there are too many companies hurting now) and any help will be on an industry basis, not company specific.

ben175 · Mon Apr 20, 2020 4:37 pm

MIflyer12 wrote:
chonetsao wrote:
When Virgin fail, there would be another airline coming to life in Australian market later when condition is right.

The conditions aren't ever going to be right. It's a relatively small, geographically isolated domestic market with a lot of geographical dispersion - it's worse than Canada, which in spite of prosperity, stability, and a very large market next door hasn't really been able to support even two full national carriers.

https://data.worldbank.org/indicator/is ... _desc=true

There is most definitely room for two national carriers, but probably not two full service airlines.
Australians are some of the most well-travelled people in the world, and it is not uncommon for the average Joe to take a domestic and an overseas trip every year. SYD-MEL and SYD-BNE in particular are ginormous markets that will skyrocket in average fares if QF doesn't have any competition. Don't even get me started on the transcons, which are already ludicrous prices during peak periods. On occasion it's been cheaper for me to get to Europe than it is to get to Perth from Melbourne.

aemoreira1981 · Mon Apr 20, 2020 4:41 pm

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.

Australia does need a second carrier to keep Qantas honest. However, Virgin Australia was not well managed and would have faced problems being a going concern even if this didn't happen. They need to be a lot leaner. You can have a regional carrier with just an A320/A321-style fleet and limited international travel (i.e., trans-Tasman). A plane like the A321XLR could in the future be what does SYD-SIN or something like SYD-DPS or MEL-DPS, but that's as far as is needed. To do routes to China could involve an alliance with one like China Southern, and one could partner with Emirates to feed their flights for Europe, and interline with Delta or United for USA travel.

Blerg · Mon Apr 20, 2020 4:43 pm

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

eta unknown · Mon Apr 20, 2020 4:47 pm

There are still 2 carriers: they just both happen to be part of QF.
As for keeping QF honest, considering the grand scheme of things in the world right now, having an airline monopoly is only important to people on this site- for everyone else it will be a temporary inconvenience.

Kiwirob · Mon Apr 20, 2020 4:56 pm

ben175 wrote:
Really horrible day for Australian aviation. Hoping there may be some light at the end of the tunnel, I have many friends who are proud VA workers that are incredibly sad to see this happen.

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.

eta unknown · Mon Apr 20, 2020 5:00 pm

Re money tap: when you consider just how many capital injections VA kept asking for year after year after year it's a miracle they lasted as long as they did. VA in its current firm isn't sustainable.

ben175 · Mon Apr 20, 2020 5:31 pm

Kiwirob wrote:
ben175 wrote:
Really horrible day for Australian aviation. Hoping there may be some light at the end of the tunnel, I have many friends who are proud VA workers that are incredibly sad to see this happen.

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.

zkncj · Mon Apr 20, 2020 6:29 pm

NZ might of just finally got there dreams to start an Australian domestic airline, just 30 years later an two failed airlines later....

If VA was to stop flying, I wonder if in the short term they make an bid for say the mining contracts.

DDR · Mon Apr 20, 2020 6:36 pm

I don't know very much about Virgin Australia, but why, prior to the corona virus, were they unprofitable? Hasn't every major airline that competed with QANTAS failed? I'm honestly asking, I don't know. Is there really room for two full service airlines in relation to the Aussie population?

Kiwiandrew · Mon Apr 20, 2020 7:39 pm

DDR wrote:
I don't know very much about Virgin Australia, but why, prior to the corona virus, were they unprofitable? Hasn't every major airline that competed with QANTAS failed? I'm honestly asking, I don't know. Is there really room for two full service airlines in relation to the Aussie population?

A valid point... to the best of my knowledge. the only time two "full service" airlines thrived was during the era of 'two airline policy' when fares were incredibly high, flights from each airline departed at pretty much the same time to the same destination, the airlines were 'permitted' ( due to import licensing at the time) to order equal numbers of identical aircraft, and ( IIRC) the two carriers were actually 'guaranteed' a minimum of 48% of the domestic trunk market each, so they only 'competed' for the difference.

As soon as the artificial protection of the two airline policy was scrapped, Ansett entered its long, slow decline ( not helped by the reckless stupidity of Air NZ management at the time, who bit off way more than they could chew by acquiring Ansett ... incredibly they were so desperate to stop SQ from grabbing the other 50% of AN that they failed to do basic due diligence and only found out far too late what a mistake they had made ) .

Had DJ stuck to being 'Virgin Blue' rather than trying to be 'Qantas Lite' , I suspect they would have been in pretty good shape (pre-Covid) , relatively speaking

LaunchDetected · Mon Apr 20, 2020 7:39 pm

Sad news for the people involved, hope they will find somewhere to work. Still convinced that it's a good move from the Australian government.

Exeiowa · Mon Apr 20, 2020 7:40 pm

Well the problem is, the companies problem is not that it ran out of money to pay the staff, but ran out of money to pay the bond holders. Any airline getting bailed out using the employees as hostages needs the money to service its debts. Better for the government to directly assist the employees than pay off the debts, because you know that most of the money will go to the holders of debt and then they will do over the employees anyway.

81819 · Mon Apr 20, 2020 7:51 pm

DDR wrote:
I don't know very much about Virgin Australia, but why, prior to the corona virus, were they unprofitable? Hasn't every major airline that competed with QANTAS failed? I'm honestly asking, I don't know. Is there really room for two full service airlines in relation to the Aussie population?

VA burnt a lot of cash starting a new regional airline with 32 aircraft and than shutting it down six years latter.

Virgin’s international losses have always been a drain on revenues.

VA currently has interest expense on unsecured loans in the region of $200 million per year.

My numbers suggest VA would be approximately $2.5 billion better off today, if it had concentrated on simply being a single type 737 operator.

As such the argument for an Australian second airline shouldn’t revolve around it being a FSC or LCC, but what would be the airlines natural size.

From this perspective, maybe a third airline would be a good idea. One that targets regional Queensland (a large market) and Northern NSW and than the major Interstate trunk routes from Queensland’s major city centres.

zkncj · Mon Apr 20, 2020 8:17 pm

Kiwiandrew wrote:
DDR wrote:
I don't know very much about Virgin Australia, but why, prior to the corona virus, were they unprofitable? Hasn't every major airline that competed with QANTAS failed? I'm honestly asking, I don't know. Is there really room for two full service airlines in relation to the Aussie population?

A valid point... to the best of my knowledge. the only time two "full service" airlines thrived was during the era of 'two airline policy' when fares were incredibly high, flights from each airline departed at pretty much the same time to the same destination, the airlines were 'permitted' ( due to import licensing at the time) to order equal numbers of identical aircraft, and ( IIRC) the two carriers were actually 'guaranteed' a minimum of 48% of the domestic trunk market each, so they only 'competed' for the difference.

As soon as the artificial protection of the two airline policy was scrapped, Ansett entered its long, slow decline ( not helped by the reckless stupidity of Air NZ management at the time, who bit off way more than they could chew by acquiring Ansett ... incredibly they were so desperate to stop SQ from grabbing the other 50% of AN that they failed to do basic due diligence and only found out far too late what a mistake they had made ) .

Had DJ stuck to being 'Virgin Blue' rather than trying to be 'Qantas Lite' , I suspect they would have been in pretty good shape (pre-Covid) , relatively speaking

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.

PepeTheFrog · Mon Apr 20, 2020 8:23 pm

ben175 wrote:
Really horrible day for Australian aviation.

A horrible time for the entire aviation industry.

More airlines will fade away in the coming months.

cam747 · Mon Apr 20, 2020 8:32 pm

zkncj wrote:
NZ might of just finally got there dreams to start an Australian domestic airline, just 30 years later an two failed airlines later....

If VA was to stop flying, I wonder if in the short term they make an bid for say the mining contracts.

As has been explained by many in the Australian Aviation thread, this won't happen.

a) it has no money to invest
b) NZ's own balance sheet was only slightly better than VA's prior to Govt bailout
c) A NZ spokesman actually came out last week and stated they have "no interest" in Australian domestic services.

onwFan · Mon Apr 20, 2020 8:35 pm

zkncj wrote:
Kiwiandrew wrote:
DDR wrote:
I don't know very much about Virgin Australia, but why, prior to the corona virus, were they unprofitable? Hasn't every major airline that competed with QANTAS failed? I'm honestly asking, I don't know. Is there really room for two full service airlines in relation to the Aussie population?

A valid point... to the best of my knowledge. the only time two "full service" airlines thrived was during the era of 'two airline policy' when fares were incredibly high, flights from each airline departed at pretty much the same time to the same destination, the airlines were 'permitted' ( due to import licensing at the time) to order equal numbers of identical aircraft, and ( IIRC) the two carriers were actually 'guaranteed' a minimum of 48% of the domestic trunk market each, so they only 'competed' for the difference.

As soon as the artificial protection of the two airline policy was scrapped, Ansett entered its long, slow decline ( not helped by the reckless stupidity of Air NZ management at the time, who bit off way more than they could chew by acquiring Ansett ... incredibly they were so desperate to stop SQ from grabbing the other 50% of AN that they failed to do basic due diligence and only found out far too late what a mistake they had made ) .

Had DJ stuck to being 'Virgin Blue' rather than trying to be 'Qantas Lite' , I suspect they would have been in pretty good shape (pre-Covid) , relatively speaking

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.

The issue is that SQ, EY, HU were all competitors with no unified vision for VA. They just used VA to achieve their own goals and get feed. Come on, VA doesn’t even fly to SIN, AUH or China. The whole thing was a joke...

And they also clearly excluded VA from partnering with other carriers in the region. VA flew a slew of flights to DPS but didnt partner with GA. I wonder if VA was better off just offering feed to more international carriers in Star and SkyTeam like TG, GA, VN, NH, KE, CA, BR, etc...

anstar · Mon Apr 20, 2020 8:52 pm

The government have thrown money at them. There was the $750 million package in March for air nz charges etc, then there was the $150million in underwriting a domestic network for 8 weeks and then the underwriting of some international flights. Then there is job keeper which would also of subsidised those working on the skeleton staff. All these things would help a healthy company get through... but they were on the brink long before COVID.

zkncj · Mon Apr 20, 2020 10:24 pm

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?

VHOGU · Mon Apr 20, 2020 10:41 pm

This is so devastating. Just when everyone was seeing light at the end of the tunnel with the new CEO. I hope someone comes in and buys the airline. It truly is an incredible place to work. So many happy people at Virgin are now so heartbroken.

Breathe · Mon Apr 20, 2020 10:43 pm

ben175 wrote:
Kiwirob wrote:
ben175 wrote:
Really horrible day for Australian aviation. Hoping there may be some light at the end of the tunnel, I have many friends who are proud VA workers that are incredibly sad to see this happen.

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.

VS11 · Mon Apr 20, 2020 10:43 pm

JCK98 wrote:
ben175 wrote:
The main argument at play here is "why should the Australian government bail out Virgin if it's 90% foreign-owned".

I'm really hoping someone buys them out and restructures the airline into a smaller, domestic-only "Jetblue" hybrid style carrier.
A 737-only fleet, with a subfleet of 6-8 fitted with Business for the transcons to PER.

A Virgin Blue if you will.

Very clever and appropriate :lol:

RJMAZ · Mon Apr 20, 2020 10:45 pm

PANAMsterdam wrote:
I'm stunned by the unwillingness of the Australian government to help Virgin.

Ease up. The Virgin Australia board of directors have a net worth of $7 billion. They simply do not want to tap into their personal wealth.

Good riddance I say.

Australia has the biggest COVID19 assistance package per head of population on the planet and Virgin Australia was not willing to accept anything besides cold hard cash. They said no to loans and rejected our jobkeeper program where they would get paid $1500 per fortnight per employee. Virgin would then have to pay the difference between their normal wages while the business could operate.

With high freight prices they could simply do belly cargo their loss would be a fraction of leaving everything grounded.

cam747 · Mon Apr 20, 2020 11:06 pm

RJMAZ wrote:
PANAMsterdam wrote:
I'm stunned by the unwillingness of the Australian government to help Virgin.

Ease up. The Virgin Australia board of directors have a net worth of $7 billion. They simply do not want to tap into their personal wealth.

Good riddance I say.

Australia has the biggest COVID19 assistance package per head of population on the planet and Virgin Australia was not willing to accept anything besides cold hard cash. They said no to loans and rejected our jobkeeper program where they would get paid $1500 per fortnight per employee. Virgin would then have to pay the difference between their normal wages while the business could operate.

With high freight prices they could simply do belly cargo their loss would be a fraction of leaving everything grounded.

Whilst I agree the Govt should not bail them out, my thoughts today are with the thousands of Virgin staff who are uncertain about their futures, and have likely lost a job they love and an employer who, by most accounts, was great to work for.

Some of them probably read these forums, and statements like 'good riddance' whilst I'm sure not meant personally, is incredibly insensitive.

VHOGU · Mon Apr 20, 2020 11:19 pm

RJMAZ wrote:
PANAMsterdam wrote:
I'm stunned by the unwillingness of the Australian government to help Virgin.

Ease up. The Virgin Australia board of directors have a net worth of $7 billion. They simply do not want to tap into their personal wealth.

Good riddance I say.

Australia has the biggest COVID19 assistance package per head of population on the planet and Virgin Australia was not willing to accept anything besides cold hard cash. They said no to loans and rejected our jobkeeper program where they would get paid $1500 per fortnight per employee. Virgin would then have to pay the difference between their normal wages while the business could operate.

With high freight prices they could simply do belly cargo their loss would be a fraction of leaving everything grounded.

What they have asked for they intended to repay the government. Where are you getting your information from in relation to job keeper? If you’re saying Virgin employees aren’t receiving it you don’t have a clue what you’re talking about. They are.

BNEFlyer · Mon Apr 20, 2020 11:28 pm

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.

Pi7472000 · Mon Apr 20, 2020 11:32 pm

I flew them last March from MEL to SYD. They were so disorganized and responded really poorly to a delay and missed connection to Delta. Delta was amazing in their response and found my luggage lost by Virgin Australia and solved the whole mis-connection issue in a matter of minutes caused by poor Virgin Australia customer service. I think Virgin was having major issues before COVID 19. Hopefully they can restructure and come out as a better airline.

hawaiian717 · Mon Apr 20, 2020 11:33 pm

News release here: https://newsroom.virginaustralia.com/re ... nistration

Velocity Frequent Flyer is not in administration.

Gemuser · Mon Apr 20, 2020 11:41 pm

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

Toenga · Mon Apr 20, 2020 11:44 pm

A belated thanks, and present sympathies to those VA staff that have served me with cheerfulness and professionalism over the years.
VA demise though is like so many other fatalities caused by Covid 19. "They were suffering from significant pre existing conditions"
Our last flights with them were from Auckland to Montreal via Melbourne and Los Angeles, and return from JFK via LAX and Brisbane, last September. It was at a very considerable discount, and only a two hour time penalty to far more direct offerings, because of brief connections.
Auckland to Melbourne was about 40% load factor, the emptiest plane I have ever been on, but even if the return load had been 100% it could not have been making money. The 9 abreast 777 economyX was brilliant, much better then any alternative offers, and the crew fantastic.

RetroRoo · Tue Apr 21, 2020 12:00 am

hawaiian717 wrote:
News release here: https://newsroom.virginaustralia.com/re ... nistration

Velocity Frequent Flyer is not in administration.

However they've ceased redemptions for four weeks, although I wouldn't put too much faith in that time period.

There's been a run on people trying to cash in their points it seems!

RetroRoo · Tue Apr 21, 2020 12:03 am

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

swissair111 · Tue Apr 21, 2020 12:15 am

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?

smi0006 · Tue Apr 21, 2020 12:17 am

anstar wrote:
The government have thrown money at them. There was the $750 million package in March for air nz charges etc, then there was the $150million in underwriting a domestic network for 8 weeks and then the underwriting of some international flights. Then there is job keeper which would also of subsidised those working on the skeleton staff. All these things would help a healthy company get through... but they were on the brink long before COVID.

I think this is a really key point - when people talk about protecting Jobs, the job keeper is a good way of a doing this, whilst ensuring the business also has to be viable. The government would have been paying the partial labour costs, including those stood down effective today - they have done their bit to save jobs.

NTLDaz · Tue Apr 21, 2020 12:23 am

RJMAZ wrote:
PANAMsterdam wrote:
I'm stunned by the unwillingness of the Australian government to help Virgin.

Ease up. The Virgin Australia board of directors have a net worth of $7 billion. They simply do not want to tap into their personal wealth.

Good riddance I say.

Australia has the biggest COVID19 assistance package per head of population on the planet and Virgin Australia was not willing to accept anything besides cold hard cash. They said no to loans and rejected our jobkeeper program where they would get paid $1500 per fortnight per employee. Virgin would then have to pay the difference between their normal wages while the business could operate.

With high freight prices they could simply do belly cargo their loss would be a fraction of leaving everything grounded.

What loans did they say no to ? Yeah you don't like Virgin but some facts are usually helpful.

FSDan · Tue Apr 21, 2020 12:23 am

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?

NTLDaz · Tue Apr 21, 2020 12:25 am

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.

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