Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 11
 
redroo
Posts: 581
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 9:10 pm

SYDSpotter wrote:
NZ801 wrote:
Because Queensland politics is always crazy, they’ve launched a bid for VA. It feels like every man and his dog are having a go.

https://www.smh.com.au/politics/queensl ... 54sny.html


Well the plot thickens...

The potential bid will be done through QIC, the state's investment vehicle. If successful, there are 2 big issues I see:

1) QF would not be happy, they will argue there is no longer a level playing field with a publicly owned company going up against a government (state) owned company. They would probably demand a Federal government guarantee of their loans.
2) The other states would not be happy and would demand that Federal aviation assistance for VA ceases immediately. If VA were to continue receiving the support package once owned by QIC, the support would effectively be Federal support for keeping jobs in QLD at the expense of other states. If VA was bought another consortium, there would be no guarantee VA keeps their HQ in Brisbane.

Interesting times...


Indeed.

Did not see that coming. Though let’s see if they do put their money where their press release is :-)

And you are spot on regarding the reaction.
 
redroo
Posts: 581
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 9:18 pm

dredgy wrote:
timtam wrote:
VA is not an infrastructure asset. QIC has no idea how to run an airline and it would become a disaster investment for them if they try.

But it doesnt really matter, QIC wont win the bid. The risks in VA will be too high for their risk appetite and so they wont be able to mount a competitive bid.


It's actually an incredibly low risk investment in the short to medium term. Coming in at the bottom of the market, the value will inevitably rise even if it is mismanaged to collapse in the long term - so long as they sell early.

But it's a moot point, QIC is seeking to partner with somebody else, who will likely be the managing partner, it's unlikely QIC will be the ones running it - aside from requiring head office in Queensland.

Their cash position isn't so great that they could buy the whole airline.



Unfortunately I would class owning any airline a high risk investment. When you look at the numbers of the long term airlines go from boom to bust.

They are capital intensive and typically return only a couple of percent profit. The airlines that get a decent 10pc are few and far between.

The last few years have been boom time. QF was returning over 10pc. Virgin was negative.

I take your point though. In theory. Bottom of market. Two horse race. Jobs for Queensland. Sounds like a winner. But history is littered with “billionaires becoming millionaires” in this game.

At the end of the day its QLDs money... though given a huge percentage of state money comes from Canberra one could argue its WA money.

Definitely going to be interesting few months ahead in Australian aviation.
 
81819
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 10:11 pm

redroo wrote:
dredgy wrote:
timtam wrote:
VA is not an infrastructure asset. QIC has no idea how to run an airline and it would become a disaster investment for them if they try.

But it doesnt really matter, QIC wont win the bid. The risks in VA will be too high for their risk appetite and so they wont be able to mount a competitive bid.


It's actually an incredibly low risk investment in the short to medium term. Coming in at the bottom of the market, the value will inevitably rise even if it is mismanaged to collapse in the long term - so long as they sell early.

But it's a moot point, QIC is seeking to partner with somebody else, who will likely be the managing partner, it's unlikely QIC will be the ones running it - aside from requiring head office in Queensland.

Their cash position isn't so great that they could buy the whole airline.



Unfortunately I would class owning any airline a high risk investment. When you look at the numbers of the long term airlines go from boom to bust.

They are capital intensive and typically return only a couple of percent profit. The airlines that get a decent 10pc are few and far between.

The last few years have been boom time. QF was returning over 10pc. Virgin was negative.

I take your point though. In theory. Bottom of market. Two horse race. Jobs for Queensland. Sounds like a winner. But history is littered with “billionaires becoming millionaires” in this game.

At the end of the day its QLDs money... though given a huge percentage of state money comes from Canberra one could argue its WA money.

Definitely going to be interesting few months ahead in Australian aviation.


With the Queensland economy highly dependent upon on regular air services, I am not that surprised that the Queensland government in some form has their hat in the ring. The last thing Queensland needs is a VAm2 that cuts routes and frequencies in the Queensland market.

A good investor would never loose billions of dollars on an airline. If we look at the airline failures over the last twenty years, we could easily argue the bulk of the failures were related to legacy issues, failed business plans, changing market conditions (ME3), mismanagement or extraordinary circumstances.

I think the majority of us would argue the failure of VA revolved around its business model and not core market conditions.

If we actually look at the Australian market, it has all of the ingredients for a successful second and I'd suggest third airline (high wages, geographically dispersed cities, industries heavily reliant on air travel, established markets, large tourism industry, excellent infrastructure, population that likes to travel).

....and this is why I see the REX and Alliance proposals to expand their airlines as being a good first step to a sustainable and competitive market.

These two airlines could add approximately 15-25 A318-A320 sized jets ($25-35 million each) in the near future. With both airlines having relatively low scale and (assumed) market strategies that offset directly competing with QANTAS/JETSTAR, the risks would be considerably less than buying a relatively large airline that still requires restructuring.

Over the longer term, they could both organically expand their business focusing on their core markets. The question for such a strategy revolves around at what level of investment and risk both airlines would be willing to make to reach the all important critical mass.

For the Queensland government, their involvement could revolve around underwriting aircraft leases, payments for ensuring minimum frequencies of RPT to regional centres, performance based cash incentives, etc.

The problem with a QANTAS /JETSTAR monopoly would revolve around their marketing departments directing "would be tourists" to locations that best suit their bottom line (i.e holiday packages in South Australia instead of Queensland).

As such, the risk for states like Queensland is more about ensuring the fundamentals for the Queensland economy remain strong, rather than loosing money by owning an airline.

I'd suggest the Queensland government statements about saving jobs is only just part of the story. It could be more about securing the future of the economy.
 
moa999
Posts: 944
Joined: Tue Mar 13, 2018 6:37 am

Re: Australian Aviation Thread - May 2020

Wed May 13, 2020 11:51 pm

travelhound wrote:
more about ensuring the fundamentals for the Queensland economy remain strong, rather than loosing money by owning an airline.


But if that's the objective then they wouldn't find any third party interest,
And I can't imagine that's within QICs mandate.

Remember also this is being sold in a competitive situation with multiple parties bidding. Won't necessarily be cheap.
 
User avatar
qf2220
Posts: 1972
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 12:28 am

smi0006 wrote:
qf2220 wrote:
RyanairGuru wrote:

Never brand new but they have bought a lot of second hand Saab340s, especially from Colgan and American. Indeed one of them is still flying in the basic US Airways livery, and has been for several years now.


Wow fascinating. Here is an image

https://commons.wikimedia.org/wiki/File:Regional_Express_Airlines_(VH-ZXF),_now_wearing_REX_livery_over_the_ex_US_Airways_Express,_Saab_340B_at_Wagga_Wagga_Airport.jpg


Ha! I always wondered why there were two versions of the Rex livery, assumed one was an update never twigged it was US-Airways underneath. Actually looks rather good tbh.


Id never seen this plane and realised it but do agree it looks great. Though i am partial to any livery that has a subtle silvering like this (US of course, VS, QF and some others come to mind)
 
81819
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 12:34 am

moa999 wrote:
travelhound wrote:
more about ensuring the fundamentals for the Queensland economy remain strong, rather than loosing money by owning an airline.


But if that's the objective then they wouldn't find any third party interest,

And I can't imagine that's within QICs mandate.

Remember also this is being sold in a competitive situation with multiple parties bidding. Won't necessarily be cheap.


...and I think that's going to be the problem. What actually makes business sense for these very small businesses may not actually make sense for the Queensland government, the third larges economy in Australia. As such, there may be a need for some type of corporate welfare to protect the broader economy.

As for QIC, they are probably the best vehicle to investigate / implement such options. I'd suggest their mandate is to primarily to benefit the economic interests of Queensland. What that actually means could be up to interpretation.
 
User avatar
qf2220
Posts: 1972
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 1:24 am

All the QIC bid has done is put a bidder of last resort into the equation. A side effect is that this might also put somewhat of a floor price for other bids to pivot around which isnt desirable.
 
eamondzhang
Posts: 1799
Joined: Thu Sep 23, 2010 8:23 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 2:04 am

Don't think it's been mentioned in here but Saudia just departed Sydney as of 2 hours ago. Not sure what the flight is for. Plane was HZ-AK43 the Ad-Diriyah E-Prix 777-300ER.

Michael
 
myki
Posts: 212
Joined: Wed Sep 05, 2018 6:43 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 2:33 am

dredgy wrote:
more about ensuring the fundamentals for the Queensland economy remain strong, rather than loosing money by owning an airline..

Similarities to other airlines.
If TN didn't exist, what would the economy of Papeete and surrounding islands be like?
If EY was shut down due to billions of dollars of loss, how would the commercial and tourist dollars get in to Abu Dhabi?

I get this is a little different, as QF/JQ already exist (and smaller airlines to a lesser extent) in the Queensland market, but I guess the premise is no different to Coles or Woolies selling $1 cartons of milk at a loss to get the punters in the front door so they spend their money on other items while in store. Take a bit of loss for the greater good.
 
Kieros
Posts: 7
Joined: Wed Jun 18, 2008 1:34 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 3:37 am

eamondzhang wrote:
Don't think it's been mentioned in here but Saudia just departed Sydney as of 2 hours ago. Not sure what the flight is for. Plane was HZ-AK43 the Ad-Diriyah E-Prix 777-300ER.

Michael


It was a repatriation flight - Flying Riyadh - Sydney - Dammam - Riyadh. Another one due tomorrow morning flying the same route.
 
User avatar
RyanairGuru
Posts: 8363
Joined: Wed Nov 01, 2006 3:59 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 3:41 am

I agree it seems unlikely, but QIC investing in VA Mk 2 is a long way from the Queensland Government 'nationalising' the company. It's not really any different to Temasek.

QIC have a specialisation in infrastructure and real estate, but if they were investing in an airline they will no doubt bring in experienced management talent instead of thinking that they can run it in the same way as a toll road or shopping centre. I don't think that QIC would be any worse than any other bidder, and at least have deep pockets.
Worked Hard, Flew Right
 
NTLDaz
Posts: 470
Joined: Sun Aug 21, 2011 7:56 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 5:11 am

A thought re: REX and jets. What about 717's ? I'm sure I've read Delta will be offloading their 90 odd. Good size and at the right price it would be a possibility. Take us back to Impulse.
Last edited by NTLDaz on Thu May 14, 2020 5:14 am, edited 1 time in total.
 
tullamarine
Posts: 2534
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 5:18 am

RyanairGuru wrote:
I agree it seems unlikely, but QIC investing in VA Mk 2 is a long way from the Queensland Government 'nationalising' the company. It's not really any different to Temasek.

QIC have a specialisation in infrastructure and real estate, but if they were investing in an airline they will no doubt bring in experienced management talent instead of thinking that they can run it in the same way as a toll road or shopping centre. I don't think that QIC would be any worse than any other bidder, and at least have deep pockets.

You are probably correct. It is highly likely that the Australian Future Fund holds a large balance of QF shares given it is partly a balanced fund though it does not break out its holdings in its annual report. This does not constitute an attempt at nationalising either.

QIC does not appear to be attempting to control a consortium other than directing where the head office will be. As I understand it, QIC hasn't obviously aligned with any particular consortium as yet but is obviously hanging out its shingle out that it will add $200m to a consortium if its requirement is met. I assume if no consortium bites, then the whole thing just goes away.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 788/9, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E75/90, CR2, D82/3/4, SF3, ATR
 
User avatar
qf789
Moderator
Topic Author
Posts: 11125
Joined: Thu Feb 05, 2015 3:42 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 5:18 am

Qatar to restart services to BNE, 3 weekly A350-1000, starting 20 May and will run through to the end of June

https://www.executivetraveller.com/news ... -on-may-20
Forum Moderator
 
tullamarine
Posts: 2534
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 5:27 am

NTLDaz wrote:
A thought re: REX and jets. What about 717's ? I'm sure I've read Delta will be offloading their 90 odd. Good size and at the right price it would be a possibility. Take us back to Impulse.

Not much good if they want to open up direct services to PER. From what I've read, it seems they are looking at used 737-800s though I'm yet to be convinced it will happen at all.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 788/9, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E75/90, CR2, D82/3/4, SF3, ATR
 
ben175
Posts: 803
Joined: Wed Jul 02, 2008 12:44 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 5:45 am

Booked a PER-MEL for next Wednesday on QF - only selling 135 seats in Y on an A330-300 so domestic flights are selling at 50% capacity according to my friend who is crew for distancing measures. No TVs and only a snack box still according to the website.
 
Ishrion
Posts: 2840
Joined: Mon Feb 04, 2019 6:17 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 7:19 am

Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html
 
User avatar
SCFlyer
Posts: 595
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 7:39 am

Ishrion wrote:
Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html


Like the many articles before this one, it's a wishlist that would've made sense before COVID.

It'll be difficult to formulate a case for VA widebody replacement post-COVID, as the market for widebodies (new and second-hand) is basically non-existent in this current environment.

It may likely be cheaper to return the A330s to lessors and debateable whether to park/mothball the owned VA 77W fleet in the short term if there's no work for them during the COVID-19 recovery phase.
 
Flyingsottsman
Posts: 799
Joined: Mon Oct 25, 2010 12:32 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 7:47 am

travelhound wrote:
redroo wrote:
dredgy wrote:

It's actually an incredibly low risk investment in the short to medium term. Coming in at the bottom of the market, the value will inevitably rise even if it is mismanaged to collapse in the long term - so long as they sell early.

But it's a moot point, QIC is seeking to partner with somebody else, who will likely be the managing partner, it's unlikely QIC will be the ones running it - aside from requiring head office in Queensland.

Their cash position isn't so great that they could buy the whole airline.



Unfortunately I would class owning any airline a high risk investment. When you look at the numbers of the long term airlines go from boom to bust.

They are capital intensive and typically return only a couple of percent profit. The airlines that get a decent 10pc are few and far between.

The last few years have been boom time. QF was returning over 10pc. Virgin was negative.

I take your point though. In theory. Bottom of market. Two horse race. Jobs for Queensland. Sounds like a winner. But history is littered with “billionaires becoming millionaires” in this game.

At the end of the day its QLDs money... though given a huge percentage of state money comes from Canberra one could argue its WA money.

Definitely going to be interesting few months ahead in Australian aviation.


With the Queensland economy highly dependent upon on regular air services, I am not that surprised that the Queensland government in some form has their hat in the ring. The last thing Queensland needs is a VAm2 that cuts routes and frequencies in the Queensland market.

A good investor would never loose billions of dollars on an airline. If we look at the airline failures over the last twenty years, we could easily argue the bulk of the failures were related to legacy issues, failed business plans, changing market conditions (ME3), mismanagement or extraordinary circumstances.

I think the majority of us would argue the failure of VA revolved around its business model and not core market conditions.

If we actually look at the Australian market, it has all of the ingredients for a successful second and I'd suggest third airline (high wages, geographically dispersed cities, industries heavily reliant on air travel, established markets, large tourism industry, excellent infrastructure, population that likes to travel).

....and this is why I see the REX and Alliance proposals to expand their airlines as being a good first step to a sustainable and competitive market.

These two airlines could add approximately 15-25 A318-A320 sized jets ($25-35 million each) in the near future. With both airlines having relatively low scale and (assumed) market strategies that offset directly competing with QANTAS/JETSTAR, the risks would be considerably less than buying a relatively large airline that still requires restructuring.

Over the longer term, they could both organically expand their business focusing on their core markets. The question for such a strategy revolves around at what level of investment and risk both airlines would be willing to make to reach the all important critical mass.

For the Queensland government, their involvement could revolve around underwriting aircraft leases, payments for ensuring minimum frequencies of RPT to regional centres, performance based cash incentives, etc.

The problem with a QANTAS /JETSTAR monopoly would revolve around their marketing departments directing "would be tourists" to locations that best suit their bottom line (i.e holiday packages in South Australia instead of Queensland).

As such, the risk for states like Queensland is more about ensuring the fundamentals for the Queensland economy remain strong, rather than loosing money by owning an airline.

I'd suggest the Queensland government statements about saving jobs is only just part of the story. It could be more about securing the future of the economy.


A state election coming up later on this year as well, I believe they are not to popular at the moment, maybe they think if they throw their hat into the ring it will keep Virgin Head Quartered in Brisbane, jobs for Brisbane based Pilots, Cabin Crew, People on the ground at Brisbane airport and other airports through out Queensland and know doubt Queensland tourism. I just wonder rellie how serious they are?
 
User avatar
Chipmunk1973
Posts: 270
Joined: Tue Jun 28, 2016 10:23 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 7:58 am

A couple of interesting articles from today’s edition of The Australian.

1. REX’s plan to lease up to 10 narrow body jets is based either on a share float and/or equity injection by partner/s. They have no plan on raising debt to fund this.
Also deputy chairman Sharp stated that inflight onboard service “won’t be fancy but certainly not low cost”.

2. The administrator for VA indicated there were 19 parties that have shown interest so far, but only 8 have requested access to the business plan for transformation and recovery.

Sorry I can’t post links to this as I don’t have paid access to the web version of The Australian. Which means, yes, I am one of a select few who bought an actual printed newspaper. :eek:
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
User avatar
Chipmunk1973
Posts: 270
Joined: Tue Jun 28, 2016 10:23 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 8:07 am

SCFlyer wrote:
Ishrion wrote:
Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html


Like the many articles before this one, it's a wishlist that would've made sense before COVID.

It'll be difficult to formulate a case for VA widebody replacement post-COVID, as the market for widebodies (new and second-hand) is basically non-existent in this current environment.

It may likely be cheaper to return the A330s to lessors and debateable whether to park/mothball the owned VA 77W fleet in the short term if there's no work for them during the COVID-19 recovery phase.


I’m only making a stab in the dark here, but my gut tells me the 787 is the pick because many of the 737Max orders may be cancelled some time soonish. With that many deposits made, it would make financial sense to order the 787 in lieu of losing all that deposit money.

It maybe further sad news for Boeing’s 737 program, which I’m not going to get into here, but they’ll still be selling more 787s which has still got to be a win.
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
tullamarine
Posts: 2534
Joined: Thu Aug 05, 1999 1:14 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 8:11 am

Ishrion wrote:
Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html

I think this is probably a misinterpretation of what the administrators have presented. As part of the data room, it is likely the administrator presented the business plan that PS was working towards pre-COVID and as have many have said going to a single WB was the obvious plan at the time.

The administrators are only providing data, what the bidders choose to do is up to them though it will get political so a plan that axes too many jobs may struggle to get government support. Likewise majority foreign bids will need FIRB approval.
717, 721/2, 732/3/4/5/7/8/9, 742/3/4, 752/3, 762/3, 772/E/W, 788/9, 300,310, 319,320/1, 332/3, 359, 388, DC9, DC10, F28, F100, 142,143, E75/90, CR2, D82/3/4, SF3, ATR
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 8:25 am

I would agree, this is probably management's plan, not the administrator's plan, well at least I hope that's the case. The administrator shouldn't be going around telling bidders "Here is the airline, how much do you want to pay for it?".

They should instead just be giving the bidders access to all the books and letting them come up with their plan for Virgin, be that LCC or 'hybrid' or full service, domestic-only, or even a reheated version of Virgin Australia 1.0 but without all the debt and with new EBAs.
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 9:06 am

SCFlyer wrote:
Ishrion wrote:
Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html

Like the many articles before this one, it's a wishlist that would've made sense before COVID.
It'll be difficult to formulate a case for VA widebody replacement post-COVID, as the market for widebodies (new and second-hand) is basically non-existent in this current environment.

It may likely be cheaper to return the A330s to lessors and debateable whether to park/mothball the owned VA 77W fleet in the short term if there's no work for them during the COVID-19 recovery phase.



Virgin Australia was looking at this before COVID-19, hell, JB was talking it up for years before. In a lot of ways its almost as if COVID-19 is providing Scurrah with the 'cover' to do what he would have wanted to do anyway, eg ditching Tiger, axing NZ crew base, moving to a single type for widebodies. This is why it seems like the plan Deloittes are passing around is more like the airline management's plan, all mapped out and with Scurrah's own set of numbers and optimistic debt-free profit predictions against it.

But while the move to a single type makes perfect sense just like it always has, I can't see now being the time to do that. If this "Virgin 2.0" is supposed to get off the ground in July like Deloittes says then it won't even need a full 737 fleet, let alone A330s or B777s. There won't be any US travel until at least 2021 and next year is still a long way away anyway.

The number of jets is also oddly specific. Eight frames. Virgin currently manages daily SYD-LAX, MEL-LAX and BNE-LAX with five frames, and would need only one more frame for BNE-HND, so what's the plan for the other two? If they're for transcon then you'd only get a few flights each day per frame, allowing for SYD curfew and sensible flying times too.

So even if you had two SYD-PER and MEL-PER that's not going to really compete against QF's ability to make almost every SYD-PER and MEL-PER flight an A330 if it really wanted. And that's assuming there is demand there, although we are talking about late 2020 onwards and by then domestic demand should be back, maybe not back to normal though.
 
ZK-NBT
Posts: 7500
Joined: Mon Oct 16, 2000 5:42 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 9:31 am

CraigAnderson wrote:
SCFlyer wrote:
Ishrion wrote:
Virgin Australia administrators propose buying eight 787s to replace 5x 77Ws and 3x A330s

https://amp.smh.com.au/business/compani ... 54snq.html

Like the many articles before this one, it's a wishlist that would've made sense before COVID.
It'll be difficult to formulate a case for VA widebody replacement post-COVID, as the market for widebodies (new and second-hand) is basically non-existent in this current environment.

It may likely be cheaper to return the A330s to lessors and debateable whether to park/mothball the owned VA 77W fleet in the short term if there's no work for them during the COVID-19 recovery phase.



Virgin Australia was looking at this before COVID-19, hell, JB was talking it up for years before. In a lot of ways its almost as if COVID-19 is providing Scurrah with the 'cover' to do what he would have wanted to do anyway, eg ditching Tiger, axing NZ crew base, moving to a single type for widebodies. This is why it seems like the plan Deloittes are passing around is more like the airline management's plan, all mapped out and with Scurrah's own set of numbers and optimistic debt-free profit predictions against it.

But while the move to a single type makes perfect sense just like it always has, I can't see now being the time to do that. If this "Virgin 2.0" is supposed to get off the ground in July like Deloittes says then it won't even need a full 737 fleet, let alone A330s or B777s. There won't be any US travel until at least 2021 and next year is still a long way away anyway.

The number of jets is also oddly specific. Eight frames. Virgin currently manages daily SYD-LAX, MEL-LAX and BNE-LAX with five frames, and would need only one more frame for BNE-HND, so what's the plan for the other two? If they're for transcon then you'd only get a few flights each day per frame, allowing for SYD curfew and sensible flying times too.

So even if you had two SYD-PER and MEL-PER that's not going to really compete against QF's ability to make almost every SYD-PER and MEL-PER flight an A330 if it really wanted. And that's assuming there is demand there, although we are talking about late 2020 onwards and by then domestic demand should be back, maybe not back to normal though.


You can’t run, and they don’t run SYD/MEL/BNE-LAX daily with 5 frames. MEL is x5 and BNE x6 SYD daily. It may be possible if more flights had a daylight return ex LAX and turned straight back to LAX but that seems unlikely given the yields are generally higher on overnight LAX-Australia.
 
dredgy
Posts: 494
Joined: Fri Jun 16, 2017 5:13 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 10:10 am

Flyingsottsman wrote:
A state election coming up later on this year as well, I believe they are not to popular at the moment, maybe they think if they throw their hat into the ring it will keep Virgin Head Quartered in Brisbane, jobs for Brisbane based Pilots, Cabin Crew, People on the ground at Brisbane airport and other airports through out Queensland and know doubt Queensland tourism. I just wonder rellie how serious they are?


They definitely will be pitching it that way. QLD Government has a lower approval rating than all other state governments at the moment, but still at the highest it's ever been I believe - it's likely to win an election without having to buy an airline. Indeed the buying the airline could be spun against them - especially if they are part of a winning bid.
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 11:03 am

ZK-NBT wrote:
You can’t run, and they don’t run SYD/MEL/BNE-LAX daily with 5 frames. MEL is x5 and BNE x6 SYD daily. It may be possible if more flights had a daylight return ex LAX and turned straight back to LAX but that seems unlikely given the yields are generally higher on overnight LAX-Australia.


So maybe the plan is daily for MEL and BNE, so as better to compete against QF, with one 787 for BNE-HND?
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 11:13 am

The Australian says four major bidders lined up for tomorrow's first round.

* a consortium of private equity firm BGH, AustralianSuper and Singapore's Temasek
* Canadian infrastructure investor Brookfield
* US private equity firm Bain
* India's InterGlobe Enterprises, led by Indian billionaire Rahul Bhatia who co-founded Indian budget carrier IndiGo.

Others who were "interested parties" such as Queensland's "Project Maroon" and Wesfarmers may still join one of these groups in the next four weeks, as final bids are due on June 12.

https://www.theaustralian.com.au/busine ... 9811530861
 
User avatar
SCFlyer
Posts: 595
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 11:55 am

CraigAnderson wrote:
ZK-NBT wrote:
You can’t run, and they don’t run SYD/MEL/BNE-LAX daily with 5 frames. MEL is x5 and BNE x6 SYD daily. It may be possible if more flights had a daylight return ex LAX and turned straight back to LAX but that seems unlikely given the yields are generally higher on overnight LAX-Australia.


So maybe the plan is daily for MEL and BNE, so as better to compete against QF, with one 787 for BNE-HND?


If the JV partnership with DL survives (on the assumption a non-LCC consortium gets the nod) and TransPac borders open up in mid 2021 at the earliest , it may be best to leave SYD-LAX to DL and operate daily out of BNE/MEL on 788/789s under that scenario.
 
timtam
Posts: 309
Joined: Tue Nov 19, 2013 2:02 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 12:27 pm

You never know but have to wonder if Brookfield are serious bidders. Almost as wacky as QIC bidding for the airline.

Indian investors will be looking for a low price and goverment support. Maybe hoping to win by being the last bidder remaining.

So its probably down to 2 serious bidders plus a wildcard. This is looking like its Temasek's to lose.
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 12:36 pm

Am I the only one who thinks that it's completely fanciful for VA v2.0 to have a long haul network? Or that any of the potential bidders will seriously buy into the idea of a fleet of eight new 787s to operate it? Or that the chances of having both VA v2.0 AND and an expanded ZL both carve out a successful market niche competing on the trunk routes is close to zilch? It really seems to me that there's a lack of appreciation of the long-term deep implications for the airline market that the virus has caused. Most analysts are now suggesting that globally it will be years before services reach summer 2019-2020 levels, if ever. Australia won't remotely approach the passenger levels of the past until mass tourism is able to resume. And given the current state of affairs tourism is an industry that will have to be rebuilt from the ground up over many years. And only even starting when there's a vaccine, apart from a handful of less-impacted countries.
This is not my beautiful house . . . This is not my beautiful wife
 
User avatar
qf789
Moderator
Topic Author
Posts: 11125
Joined: Thu Feb 05, 2015 3:42 pm

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 2:01 pm

SCFlyer wrote:
CraigAnderson wrote:
ZK-NBT wrote:
You can’t run, and they don’t run SYD/MEL/BNE-LAX daily with 5 frames. MEL is x5 and BNE x6 SYD daily. It may be possible if more flights had a daylight return ex LAX and turned straight back to LAX but that seems unlikely given the yields are generally higher on overnight LAX-Australia.


So maybe the plan is daily for MEL and BNE, so as better to compete against QF, with one 787 for BNE-HND?


If the JV partnership with DL survives (on the assumption a non-LCC consortium gets the nod) and TransPac borders open up in mid 2021 at the earliest , it may be best to leave SYD-LAX to DL and operate daily out of BNE/MEL on 788/789s under that scenario.


Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon
Forum Moderator
 
User avatar
eta unknown
Posts: 2835
Joined: Wed Jun 13, 2001 5:03 am

Re: Australian Aviation Thread - May 2020

Thu May 14, 2020 3:44 pm

This is going to be interesting- we'll see what DL really thinks about their VA JV. Either DL will (a) continue SYD with an A350, (b) drop the route or (c) tell VA to do all the JV flying (with strong probability VA wont be in a position to do so).
 
gpasternak
Posts: 54
Joined: Sat Feb 16, 2008 10:28 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 12:16 am

Not sure if previously mentioned but BNE is re opening the spotters area. Also in their facebook post they mention a plan to build another spotters area for the new runway 1L/19R (once COVID settles). Has anyone heard about the actual location for this?
 
ACA772LR
Posts: 74
Joined: Thu Nov 05, 2015 4:55 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 12:45 am

qf789 wrote:
SCFlyer wrote:
CraigAnderson wrote:

So maybe the plan is daily for MEL and BNE, so as better to compete against QF, with one 787 for BNE-HND?


If the JV partnership with DL survives (on the assumption a non-LCC consortium gets the nod) and TransPac borders open up in mid 2021 at the earliest , it may be best to leave SYD-LAX to DL and operate daily out of BNE/MEL on 788/789s under that scenario.


Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon


Why do some people think that because DL has announced that by the years end all of their 777s will be gone that now all of a sudden DL will stop serving SYD? They still have the A350.......
 
User avatar
EK413
Posts: 5542
Joined: Sat Nov 29, 2003 3:11 pm

Australian Aviation Thread - May 2020

Fri May 15, 2020 12:46 am

gpasternak wrote:
Not sure if previously mentioned but BNE is re opening the spotters area. Also in their facebook post they mention a plan to build another spotters area for the new runway 1L/19R (once COVID settles). Has anyone heard about the actual location for this?

Perhaps ask “tourismman” the question as he is a spotter in BNE & is well informed of the plans ;)


Brisbane Airport (BNE) - Pictures/News/Discussion
https://r.tapatalk.com/shareLink/topic? ... source=app


Sent from my iPhone using Tapatalk
Good evening, ladies and gentlemen. We are tonight’s entertainment!
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 1:47 am

qf789 wrote:
Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon


Why woudn't DL swap the B777 for an Airbus A350, or do you feel the SYD-LAX route itself might be dropped due to reduced demand?
 
zkncj
Posts: 3870
Joined: Wed Nov 09, 2005 4:57 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 2:06 am

CraigAnderson wrote:
qf789 wrote:
Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon


Why woudn't DL swap the B777 for an Airbus A350, or do you feel the SYD-LAX route itself might be dropped due to reduced demand?


I think it would end up being a350, but wouldn’t expect them to back for the next year or so. Unless an miracle happens, I don’t see Australia opening there boarders until early 2021.

They first need to get the states to allow domestic travel between each other, which would be an good start.
 
User avatar
qf789
Moderator
Topic Author
Posts: 11125
Joined: Thu Feb 05, 2015 3:42 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 2:11 am

Perth Airport and Qantas have come to a mutual agreement over their recent dispute. All breach and termination notices have been withdrawn and also moving forward timeline over determining true market value of T4

https://www.perthairport.com.au/Home/co ... and-qantas
Forum Moderator
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 2:20 am

Virgin Australia will reactivate Velocity Frequent Flyer redemptions from this afternoon, but only for selected "popular domestic routes"

https://www.executivetraveller.com/news ... yer-points
 
Gemuser
Posts: 5083
Joined: Mon Nov 24, 2003 12:07 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 2:38 am

zkncj wrote:
CraigAnderson wrote:
qf789 wrote:
Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon


Why woudn't DL swap the B777 for an Airbus A350, or do you feel the SYD-LAX route itself might be dropped due to reduced demand?


I think it would end up being a350, but wouldn’t expect them to back for the next year or so. Unless an miracle happens, I don’t see Australia opening there boarders until early 2021.

They first need to get the states to allow domestic travel between each other, which would be an good start.

IF the Commonwealth Government really wanted the interstate borders open and the states [or a state] refused it would take one morning in the High Court to have the state governments slapped down. The states [and commonwealth have NO powers to close state borders, under the Constitution [in fact it is prohibited]. They are currently getting away with it because everybody agrees with it, if the states and commonwealth governments disagree the borders are open after the above mentioned morning in the High Court.
I really doubt it will come to that, this Federal Cabinet thing appears to be working well.

Gemuser
 
Captdasbomb
Posts: 172
Joined: Sun Feb 03, 2019 2:08 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 4:43 am

qf789 wrote:
Perth Airport and Qantas have come to a mutual agreement over their recent dispute. All breach and termination notices have been withdrawn and also moving forward timeline over determining true market value of T4

https://www.perthairport.com.au/Home/co ... and-qantas


The old " the details are commercial in confidence".
 
User avatar
qf789
Moderator
Topic Author
Posts: 11125
Joined: Thu Feb 05, 2015 3:42 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 5:19 am

CraigAnderson wrote:
qf789 wrote:
Given that DL has announced retirement of 777's its very likely DL wont be returning to SYD anytime soon


Why woudn't DL swap the B777 for an Airbus A350, or do you feel the SYD-LAX route itself might be dropped due to reduced demand?


I have always had the opinion that DL has not been that interested in Australia/NZ. Providing VA sticks with LAX it may be better for DL just to codeshare with VA on VA metal until some sort of normality returns, but that is a long way off, with some estimates being 2022-23 before any pre Coronavirus levels return. Obviously for DL to operate SYD they would need to find 2 A350's to serve the route daily, like many other carriers they are likely to defer deliveries depending how all this pans out, I would imagine they would focus on their larger markets first being Asia, Europe and South America
Forum Moderator
 
User avatar
qf2220
Posts: 1972
Joined: Fri Aug 16, 2013 9:16 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 5:54 am

qf789 wrote:
Perth Airport and Qantas have come to a mutual agreement over their recent dispute. All breach and termination notices have been withdrawn and also moving forward timeline over determining true market value of T4

https://www.perthairport.com.au/Home/co ... and-qantas


A QF backdown maybe?
 
User avatar
CraigAnderson
Posts: 570
Joined: Fri Jan 05, 2018 12:28 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 6:49 am

This doesn't sound good, apparently Virgin Australia "is down to its last $100 million" and could run out of money before its new owners sign on the dotted line.

https://www.smh.com.au/business/compani ... 54tex.html
 
anstar
Posts: 3276
Joined: Sun Nov 23, 2003 3:49 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 7:26 am

DavidByrne wrote:
Am I the only one who thinks that it's completely fanciful for VA v2.0 to have a long haul network? Or that any of the potential bidders will seriously buy into the idea of a fleet of eight new 787s to operate it? Or that the chances of having both VA v2.0 AND and an expanded ZL both carve out a successful market niche competing on the trunk routes is close to zilch? It really seems to me that there's a lack of appreciation of the long-term deep implications for the airline market that the virus has caused. Most analysts are now suggesting that globally it will be years before services reach summer 2019-2020 levels, if ever. Australia won't remotely approach the passenger levels of the past until mass tourism is able to resume. And given the current state of affairs tourism is an industry that will have to be rebuilt from the ground up over many years. And only even starting when there's a vaccine, apart from a handful of less-impacted countries.


Seems very optimistic. I would of thought the new owners would be the ones to come up with a business plan. Not a business plan from a failed management team.

CraigAnderson wrote:
Virgin Australia will reactivate Velocity Frequent Flyer redemptions from this afternoon, but only for selected "popular domestic routes"

https://www.executivetraveller.com/news ... yer-points


Obviously desperate for cash. By allowing redemptions for flights unlikely to operate it releases cash from velocity to go to Virgin who are down to their last $100m.
 
User avatar
SCFlyer
Posts: 595
Joined: Tue Oct 23, 2018 11:14 pm

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 8:00 am

Being reported via ET that Delta may be poised to place the A350 on the LAX-SYD-LAX route once restrictions start to subside. Limited services are currently set for June, although this may likely change.

Personal Speculation/Scenario: Based on the scenario that the DL/VA JV remains in a post-administration (COVID) world, it may make a case for the 4x owned VA 77Ws to operate BNE/MEL-LAX, with BNE-HND on the 5th 77W. This leaves SYD-LAX to DL, whilst enabling the return of the VA A330s to the lessors.

https://www.executivetraveller.com/news ... es-flights
 
anstar
Posts: 3276
Joined: Sun Nov 23, 2003 3:49 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 8:43 am

SCFlyer wrote:
Being reported via ET that Delta may be poised to place the A350 on the LAX-SYD-LAX route once restrictions start to subside. Limited services are currently set for June, although this may likely change.

Personal Speculation/Scenario: Based on the scenario that the DL/VA JV remains in a post-administration (COVID) world, it may make a case for the 4x owned VA 77Ws to operate BNE/MEL-LAX, with BNE-HND on the 5th 77W. This leaves SYD-LAX to DL, whilst enabling the return of the VA A330s to the lessors.

https://www.executivetraveller.com/news ... es-flights


Given our internal borders are unlikely to be relaxed until July I think a June resumption is optimistic at best given its 2 weeks away.
 
SYDSpotter
Posts: 890
Joined: Tue Oct 30, 2012 9:10 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 9:57 am

SCFlyer wrote:
with BNE-HND on the 5th 77W.


That's a tonne of capacity for BNE-HND ! Its most definitely 787/A330 territory, but I appreciate they don't have 787's and abusing a 77W is the lesser of 2 evils vs continuing to lease A330's.
319_320_321_332_333_359_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
moa999
Posts: 944
Joined: Tue Mar 13, 2018 6:37 am

Re: Australian Aviation Thread - May 2020

Fri May 15, 2020 9:59 am

anstar wrote:
Seems very optimistic. I would of thought the new owners would be the ones to come up with a business plan. Not a business plan from a failed management team.


Ultimately it's got to be iterative with the large number of bidders.
Each will no doubt want the administrator to do slightly different things, due to the powers under voluntary administration.

But then you've also got to be careful that the creditors don't vote down the proposal.
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
  • 11

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos