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Morrofinch
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 4:29 am

Virgin Australia's administrators find that on an early preliminary examination $6.84 billion is owed to 10,247 known creditors - banks & secured lenders top the scoreboard owed $2.28b. Says creditors could rise to 12,000

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EK413
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Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:01 am

I am not surprised at all...

ACCC boss Rod Sims warns against anti-competitive behaviour from Qantas

Australia's competition watchdog has warned Qantas it will take swift action against anti-competitive behaviour such as attempts to swamp airline routes, artificially push down prices or lock in exclusive deals with airports and suppliers.

https://www.abc.net.au/news/2020-04-24/ ... n/12178208


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qf2220
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:33 am

SCFlyer wrote:
Also, before anyone goes that Velocity could not "stand alone" without an airline, interested parties may actually want Velocity to acquire/merge the Velocity customer base into their own Loyalty Program, such as Wesfarmer's Flybuys or SIA's Krisflyer


Of your two options, im not sure Flybuys is as lucrative as an airline loyalty scheme, and an SQ merger into Krisflyer is giving it an airline to support value, so youre disproving your point there ;)
 
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qf2220
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:36 am

And we have hit the 1000 posts mark. This could be a record thread month.
 
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qf2220
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:36 am

Morrofinch wrote:
Virgin Australia's administrators find that on an early preliminary examination $6.84 billion is owed to 10,247 known creditors - banks & secured lenders top the scoreboard owed $2.28b. Says creditors could rise to 12,000

Image


Morrofinch, appreciate the enthusiasm but can you please stop posting the same thing in both threads? Its not necessary. Keep the VA administration chatter in its thread. Most of us are reading both and won't miss your post.
 
Morrofinch
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:46 am

qf2220 wrote:
Morrofinch wrote:
Virgin Australia's administrators find that on an early preliminary examination $6.84 billion is owed to 10,247 known creditors - banks & secured lenders top the scoreboard owed $2.28b. Says creditors could rise to 12,000

Image


Morrofinch, appreciate the enthusiasm but can you please stop posting the same thing in both threads? Its not necessary. Keep the VA administration chatter in its thread. Most of us are reading both and won't miss your post.


noted
 
Aviator34ID
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 6:30 am

And we can all read the newspapers too.
 
ben175
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 6:46 am

Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.
 
Ishrion
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 6:50 am

ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


More details:

https://mobile.twitter.com/Gary_Adshead ... 0004118533
 
zkncj
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:11 am

ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


Shouldn't they be doing that with QF too? didn't QF having an outstanding bill over there despite with PER? or have they sorted that payment out?
 
Whatsaptudo
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:11 am

It’s not all of them (yet?). Just 4 that are stored. The A330 at the international ramp is one of them.
 
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CraigAnderson
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:30 am

Another QF repatriation flight this weekend, EZE-MEL

https://www.executivetraveller.com/news ... cue-flight
 
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Chipmunk1973
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:43 am

Ishrion wrote:
ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


More details:

https://mobile.twitter.com/Gary_Adshead ... 0004118533


So if the administrator of VA doesn’t pay the outstanding invoices, what next? Does PER airport, slash a few tyres and key the paint job? (Yes, the was sarcasm).

But in all seriousness, does the airport have that right? What if it’s a leased aircraft and one not owned? Given the amount of airlines failing over the years, is this “normal practice”?

But given it’s Friday Happy Hour, at home sadly, it would be funny to see a 737 with a wheel clamp. Much better would be to see it with it’s wheels removed and on concrete blocks. I know that can be Photoshopped but still not the same as the real thing. :lol:
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
waoz1
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:44 am

Chipmunk1973 wrote:
Ishrion wrote:
ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


More details:

https://mobile.twitter.com/Gary_Adshead ... 0004118533


So if the administrator of VA doesn’t pay the outstanding invoices, what next? Does PER airport, slash a few tyres and key the paint job? (Yes, the was sarcasm).

But in all seriousness, does the airport have that right? What if it’s a leased aircraft and one not owned? Given the amount of airlines failing over the years, is this “normal practice”?

But given it’s Friday Happy Hour, at home sadly, it would be funny to see a 737 with a wheel clamp. Much better would be to see it with it’s wheels removed and on concrete blocks. I know that can be Photoshopped but still not the same as the real thing. :lol:


I believe they did something similar with OZJET when they went under. I think it was 3 aircraft they kept? One went to Jandakot for TAFE training
 
SYDSpotter
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 8:07 am

qf2220 wrote:
tullamarine wrote:
There is a bit of speculation around that QF will go for an equity raising in the next few weeks to shore up its balance sheet. Both QF and VA are looking at substantial losses with ineffective fuel hedges following the collapse of the oil price. The fall in the AUD will also be an issue given QF's USD revenues which previously provided them with a natural hedge have basically dried up. QF will need to recognise these losses in their June accounts; for VA, administration will probably mean they will be able to walk away from these contracts.


Do fuel hedges (like most contracts) not have a force majeure term in them? Id be surprised if they did not.


A fuel hedge is closer to a financial instrument rather than a contract, fuel hedges don't ordinarily involve the physical buying/delivery of fuel. So there would be no get out clause. No different to a loan agreement I have with a bank, COVID19 doesn't void my obligations to them nor their obligations to me.
319_320_321_332_333_359_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
SYDSpotter
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 8:10 am

Chipmunk1973 wrote:

But in all seriousness, does the airport have that right? What if it’s a leased aircraft and one not owned? Given the amount of airlines failing over the years, is this “normal practice”?


If the aircraft is leased, the lessor owns it. An airport couldn't just seize the aircraft. If the aircraft was owned by VA but it was secured by debt, then the banks would have security over it.

If the aircraft was owned by VA but unencumbered, the airport still couldn't seize the aircraft to settle outstanding debts, the airport cannot jump ahead of other creditors.
319_320_321_332_333_359_388 / 734_737_738_743_744_762_763_772_773_77W_788_789
 
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CraigAnderson
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 8:13 am

Reuters has more on PER seizing a number of parked Virgin Australia aircraft due to the airline having “significant outstanding invoices”.

https://www.reuters.com/article/us-heal ... SKCN22604D
 
NTLDaz
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 8:13 am

Obzerva wrote:
CraigAnderson wrote:
Morrofinch wrote:
Fox Sports News Channel has reported that Scurrah is "keen" to keep AFL sponsorship going despite the AFL CEO actively seeking other sponsors.


Although I don't agree with a business in these dire financial straights blowing millions on sponsorship, I can see this as better value than the car-obsessed Borghetti using Virgin Australia to sponsor Super 8s.


Oh is that why that happened.
Was the weirdest sponsorship I’ve seen.


Wondering why it's so weird. The Supercars are a big deal and reach a big audience.
 
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Chipmunk1973
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 8:25 am

SYDSpotter wrote:
Chipmunk1973 wrote:

But in all seriousness, does the airport have that right? What if it’s a leased aircraft and one not owned? Given the amount of airlines failing over the years, is this “normal practice”?


If the aircraft is leased, the lessor owns it. An airport couldn't just seize the aircraft. If the aircraft was owned by VA but it was secured by debt, then the banks would have security over it.

If the aircraft was owned by VA but unencumbered, the airport still couldn't seize the aircraft to settle outstanding debts, the airport cannot jump ahead of other creditors.


Thanks.
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
Obzerva
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 9:00 am

NTLDaz wrote:
Obzerva wrote:
CraigAnderson wrote:

Although I don't agree with a business in these dire financial straights blowing millions on sponsorship, I can see this as better value than the car-obsessed Borghetti using Virgin Australia to sponsor Super 8s.


Oh is that why that happened.
Was the weirdest sponsorship I’ve seen.


Wondering why it's so weird. The Supercars are a big deal and reach a big audience.


I was referring to is it chasing the core market of corporates that VA was chasing at the time.

Have never heard of a corporate looking to be entertained at the Supercars. F1 yes, football (pick a code) yes, just not the Supercars.
Yes, it is exposure, volume of people is great, but only if it's the right metrics and targeted.
 
ArtV
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 9:10 am

CraigAnderson wrote:
Reuters has more on PER seizing a number of parked Virgin Australia aircraft due to the airline having “significant outstanding invoices”.

https://www.reuters.com/article/us-heal ... SKCN22604D


A creditor taking lien (seizing) an asset of the Administrator (or lessor, but at this stage it is the Administrators) in relation to pre-administration debts (ie, frozen and subject to a court process) is not "standard practice" and shows disregard for the legal system. This will not end in PER's favour, and is pure puffery....without legal support.

The administrator is responsible for debts that they incur from their appointment, and can use the assets to extinguish those debts....but they are not responsible (personally) for pre-appointment debts. The Creditors meetings will decide what happens to those debts.....not an airport using heavy machinery.
 
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Chipmunk1973
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 9:17 am

ArtV wrote:
CraigAnderson wrote:
Reuters has more on PER seizing a number of parked Virgin Australia aircraft due to the airline having “significant outstanding invoices”.

https://www.reuters.com/article/us-heal ... SKCN22604D


A creditor taking lien (seizing) an asset of the Administrator (or lessor, but at this stage it is the Administrators) in relation to pre-administration debts (ie, frozen and subject to a court process) is not "standard practice" and shows disregard for the legal system. This will not end in PER's favour, and is pure puffery....without legal support.

The administrator is responsible for debts that they incur from their appointment, and can use the assets to extinguish those debts....but they are not responsible (personally) for pre-appointment debts. The Creditors meetings will decide what happens to those debts.....not an airport using heavy machinery.


Interesting. Does that mean that the administrator can then litigate for illegal seizure of an asset? Because if that is the case, this is going to get messy and very drawn out.
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
ArtV
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 9:21 am

Chipmunk1973 wrote:
ArtV wrote:
CraigAnderson wrote:
Reuters has more on PER seizing a number of parked Virgin Australia aircraft due to the airline having “significant outstanding invoices”.

https://www.reuters.com/article/us-heal ... SKCN22604D


A creditor taking lien (seizing) an asset of the Administrator (or lessor, but at this stage it is the Administrators) in relation to pre-administration debts (ie, frozen and subject to a court process) is not "standard practice" and shows disregard for the legal system. This will not end in PER's favour, and is pure puffery....without legal support.

The administrator is responsible for debts that they incur from their appointment, and can use the assets to extinguish those debts....but they are not responsible (personally) for pre-appointment debts. The Creditors meetings will decide what happens to those debts.....not an airport using heavy machinery.


Interesting. Does that mean that the administrator can then litigate for illegal seizure of an asset? Because if that is the case, this is going to get messy and very drawn out.


Right now the administrator doesn't need the aircraft, so they will do nothing. However, when a deal with a buyer is done (or the assets returner to leasors), then they will apply for a court order forcing PER to release the assets. Provided the administrator has paid their (post-appointment) debts, there is nothing PER can do.
 
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Chipmunk1973
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 9:45 am

ArtV wrote:
Right now the administrator doesn't need the aircraft, so they will do nothing. However, when a deal with a buyer is done (or the assets returner to leasors), then they will apply for a court order forcing PER to release the assets. Provided the administrator has paid their (post-appointment) debts, there is nothing PER can do.


Cheers, thanks mate.
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
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RyanairGuru
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 10:34 am

Chipmunk1973 wrote:
ArtV wrote:
CraigAnderson wrote:
Reuters has more on PER seizing a number of parked Virgin Australia aircraft due to the airline having “significant outstanding invoices”.

https://www.reuters.com/article/us-heal ... SKCN22604D


A creditor taking lien (seizing) an asset of the Administrator (or lessor, but at this stage it is the Administrators) in relation to pre-administration debts (ie, frozen and subject to a court process) is not "standard practice" and shows disregard for the legal system. This will not end in PER's favour, and is pure puffery....without legal support.

The administrator is responsible for debts that they incur from their appointment, and can use the assets to extinguish those debts....but they are not responsible (personally) for pre-appointment debts. The Creditors meetings will decide what happens to those debts.....not an airport using heavy machinery.


Interesting. Does that mean that the administrator can then litigate for illegal seizure of an asset? Because if that is the case, this is going to get messy and very drawn out.


The airport would argue that they have an implied equitable lien over the asset,* but it is no doubt a bit of a lawyer's picknick. In reality this is nothing more than posturing by the airport, I sincerely doubt they have any interest in a protracted court case.

*The easiest way to think of an equitable lien is taking your car to the garage for a service. The garage isn't going to give you your car back until you have paid for the work done. Even though it's your property, and the garage doesn't have any legal interest in the vehicle, they can nonetheless use it - in effect - as collateral against you.
Worked Hard, Flew Right
 
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Chipmunk1973
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 10:58 am

RyanairGuru wrote:
The airport would argue that they have an implied equitable lien over the asset,* but it is no doubt a bit of a lawyer's picknick. In reality this is nothing more than posturing by the airport, I sincerely doubt they have any interest in a protracted court case.

*The easiest way to think of an equitable lien is taking your car to the garage for a service. The garage isn't going to give you your car back until you have paid for the work done. Even though it's your property, and the garage doesn't have any legal interest in the vehicle, they can nonetheless use it - in effect - as collateral against you.


Thanks for that. I did actually spend a year doing commercial law whilst doing an IT degree but never pursued it further, shame because I find it quite interesting, to some degree.

Liens, Chattles, Onus, Burden of Proof, Nature(s) and Condition(s) of Restraint, etc. All seems exciting until you realise 90% of it is research and paper work and not court room theatrics.

My surmise is that nothing meaningful about the VA administration will be publicly available in 4-5 weeks. But lots of rumour and hearsay.
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
redroo
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:06 am

Obzerva wrote:
NTLDaz wrote:
Obzerva wrote:

Oh is that why that happened.
Was the weirdest sponsorship I’ve seen.


Wondering why it's so weird. The Supercars are a big deal and reach a big audience.


I was referring to is it chasing the core market of corporates that VA was chasing at the time.

Have never heard of a corporate looking to be entertained at the Supercars. F1 yes, football (pick a code) yes, just not the Supercars.
Yes, it is exposure, volume of people is great, but only if it's the right metrics and targeted.


Indeed. It wasn’t a fixture on our corporate hospitality days.
 
Captdasbomb
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:23 am

zkncj wrote:
ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


Shouldn't they be doing that with QF too? didn't QF having an outstanding bill over there despite with PER? or have they sorted that payment out?


Qantas will eventually pay their bill. Virgin a tad bit iffy.
QF9/10 has been flying out of T1 lately. Maybe they are now laying nice
 
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qf789
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:32 am

zkncj wrote:
ben175 wrote:
Just heard on the radio apparently vehicles at PER are blocking all VA aircraft from leaving. No source yet as it’s breaking.


Shouldn't they be doing that with QF too? didn't QF having an outstanding bill over there despite with PER? or have they sorted that payment out?


No its not been sorted out, they were in court in January and the court requested more information from Qantas.
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qf789
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:40 am

SYDSpotter wrote:
Chipmunk1973 wrote:

But in all seriousness, does the airport have that right? What if it’s a leased aircraft and one not owned? Given the amount of airlines failing over the years, is this “normal practice”?


If the aircraft is leased, the lessor owns it. An airport couldn't just seize the aircraft. If the aircraft was owned by VA but it was secured by debt, then the banks would have security over it.

If the aircraft was owned by VA but unencumbered, the airport still couldn't seize the aircraft to settle outstanding debts, the airport cannot jump ahead of other creditors.


The 2 aircraft being shown in media reports are both leased, the first being the A332 XFE which is leased from Orix Aviation, the second being a 738, YFG which is leased from Aercap

Image

https://twitter.com/7NewsPerth/status/1 ... 76449?s=20

Image

https://twitter.com/SpeedBird_NCL/statu ... 92928?s=20
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qf789
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:45 am

qf2220 wrote:
And we have hit the 1000 posts mark. This could be a record thread month.


It is a record month, we have just passed our previous best
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qf789
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:55 am

Qantas has also released a statement regarding PER airport's actions today, they are not holding back

https://twitter.com/oliverpeterson/stat ... 11712?s=20
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qf789
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 11:59 am

Photo of the VA A332 currently being blocked at PER

Also the airport states that VA owes $16 million

Image

https://www.abc.net.au/news/2020-04-24/ ... t/12183344
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FL420FT
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 12:22 pm

A couple of charters coming into SYD this week ..
Egypt Air Arriving Sunday 26 April Departing Monday 27 April...

https://www.routesonline.com/news/38/ai ... pril-2020/

Iberia will depart from SYD on 30 April (article does not show Arrival date / time)

https://www.executivetraveller.com/news ... rid-flight
 
ben175
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 5:51 pm

qf789 wrote:
Photo of the VA A332 currently being blocked at PER

Also the airport states that VA owes $16 million

Image

https://www.abc.net.au/news/2020-04-24/ ... t/12183344


I just find this situation absolutely hilarious. It's just so childish... just when you think the world can't get crazier.

Nice to see Qantas giving VA a bit of support with their tweet, even if the motives are really to add fuel to their own personal fire with Perth Airport
 
NZ516
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 7:45 pm

utaussiefan wrote:
Virgin Australia owe $6.9 Billion dollars and are hoping to get a waiver on aircraft leases.
https://uk.reuters.com/article/us-healt ... KKCN22604D


Wow that is a big number. Up till the last few days many were saying the VA Debt burden was $5 billion now it has jumped up to $6.9 Billion. So the administration process is finding more and more outstanding liabilities. Plus the total number of creditors could reach 12,000 what an amazing number!!!.
 
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RyanairGuru
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 10:03 pm

NZ516 wrote:
utaussiefan wrote:
Virgin Australia owe $6.9 Billion dollars and are hoping to get a waiver on aircraft leases.
https://uk.reuters.com/article/us-healt ... KKCN22604D


Wow that is a big number. Up till the last few days many were saying the VA Debt burden was $5 billion now it has jumped up to $6.9 Billion. So the administration process is finding more and more outstanding liabilities. Plus the total number of creditors could reach 12,000 what an amazing number!!!.


The growing list would be the unsecured creditors, many of whom are probably being opportunistic by adding a claim in the hoping of get a few cents out of it. Anyone who has ever so much as given VAH a free postage stamp will now be lining up with their hand out.
Worked Hard, Flew Right
 
81819
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 10:30 pm

NZ516 wrote:
utaussiefan wrote:
Virgin Australia owe $6.9 Billion dollars and are hoping to get a waiver on aircraft leases.
https://uk.reuters.com/article/us-healt ... KKCN22604D


Wow that is a big number. Up till the last few days many were saying the VA Debt burden was $5 billion now it has jumped up to $6.9 Billion. So the administration process is finding more and more outstanding liabilities. Plus the total number of creditors could reach 12,000 what an amazing number!!!.


Just doing the numbers. Using 126 aircraft as the datum point (CASA web site), VA have lease / finance commitments of approximately $15 million per aircraft.

On review of the CASA aircraft register web site I noted VA currently have 13 owned aircraft. Between September 2019 and 24 March 2020, VA financed approximately 18 owned aircraft through some type of syndicated loan arrangement (VA Borrower 2019 No. 1). Eleven of these aircraft were financed in March 2020.

My numbers show VA's financed aircraft have a valuation close to $3 billion. A such, VA would of had equity in its aircraft (if we use $1.9m for the aircraft leasing creditors) close to 30% before the pandemic crisis hit.

The VA Borrower 2019 No.1 loan syndicate is quite intriguing. It could suggest, Virgin Australia were burning through cash in the last half of 2019 and the first quarter of 2020. As such, they could have already been in a spiral of doom prior to the Contra virus groundings.

Once the Administrator starts cancelling leases on aircraft, penalties will start to be incurred. Considering the state of the industry the financiers are probably willing to negotiate a settlement with the VA administrators so that as many aircraft as possible are retained.

I’d suggest the financing of owned aircraft in 2020, could result in these fiancé arrangements being legally challenged in the courts. It could be argued there was a material change in the business between September 2019 when the first transaction and occurred and 24 March 2020 when the last transaction occurred.

I can see why the administrators do not want to hand aircraft back to the lessors / financiers. With nearly $1 billion in assets tied up in these aircraft, any value Virgin Australia does have could quickly fly out of the country if the lessors exercise their contractual rights.

Looking at the numbers, without the Contra virus VA would probably not have been able to survive. With a shortage of narrow bodies in the market prior to the pandemic a lot of VA's 737's would have simply flown out of the country.

I can see why VA's cornerstone investors were not willing to prop up the company. There was just no value there.

...and as for VA asking the government for $1.4 billion and SRB blaming the government for not giving VA a bail out. I think the numbers speak for themselves. Virgin Australia was already in a very difficult financial position prior to the pandemic.


This is not going to be pretty.
Last edited by 81819 on Fri Apr 24, 2020 10:38 pm, edited 1 time in total.
 
NTLDaz
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Re: Australian Aviation Thread - April 2020

Fri Apr 24, 2020 10:34 pm

redroo wrote:
Obzerva wrote:
NTLDaz wrote:

Wondering why it's so weird. The Supercars are a big deal and reach a big audience.


I was referring to is it chasing the core market of corporates that VA was chasing at the time.

Have never heard of a corporate looking to be entertained at the Supercars. F1 yes, football (pick a code) yes, just not the Supercars.
Yes, it is exposure, volume of people is great, but only if it's the right metrics and targeted.


Indeed. It wasn’t a fixture on our corporate hospitality days.


This is why companies tend to make decisions on research not anecdotes.

Here's my anecdote. I worked for a very large recruitment firm who provided corporate hospitality throughout Australia - from golf days, Australian Open, all football codes, cricket and Supercars. Different places had different favourites but I can tell you that the hottest tickets in Adelaide, Townsville, Darwin, Newcastle and Launceston were invites to the Supercars. It takes all kinds of marketing - AFL sponsorship would mean bugger all to half the country yet Virgin sees value in it.
 
User avatar
RyanairGuru
Posts: 8339
Joined: Wed Nov 01, 2006 3:59 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 12:45 am

NTLDaz wrote:
redroo wrote:
Obzerva wrote:

I was referring to is it chasing the core market of corporates that VA was chasing at the time.

Have never heard of a corporate looking to be entertained at the Supercars. F1 yes, football (pick a code) yes, just not the Supercars.
Yes, it is exposure, volume of people is great, but only if it's the right metrics and targeted.


Indeed. It wasn’t a fixture on our corporate hospitality days.


This is why companies tend to make decisions on research not anecdotes.

Here's my anecdote. I worked for a very large recruitment firm who provided corporate hospitality throughout Australia - from golf days, Australian Open, all football codes, cricket and Supercars. Different places had different favourites but I can tell you that the hottest tickets in Adelaide, Townsville, Darwin, Newcastle and Launceston were invites to the Supercars. It takes all kinds of marketing - AFL sponsorship would mean bugger all to half the country yet Virgin sees value in it.


This is true, and partly a reflection of how dispersed sport is in Australia. We do not have a 'national' sport that has a broad following across the country. Things like Rugby Union in New Zealand, cricket in India, soccer across Europe and Latin America. While obviously not every person in the country watches these sports, they have a very board following both geographically and demographically.

Just look at our football codes: AFL has limited viewership in NSW and QLD, while NRL is even more redundant outside of those two states. Rugby Union skews very heavily towards two groups: Sydney and Brisbane private schools and migrants from NZ, South Africa etc. The A-League is arguably our largest football competition by geographical spread, but receives very low viewership compared to the AFL and NRL.

Other than the Melbourne Cup I can't think of one sponsorship that will be seen by a relatively large portion of the population.
Worked Hard, Flew Right
 
redroo
Posts: 578
Joined: Tue Jun 07, 2016 10:28 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 2:21 am

RyanairGuru wrote:
NTLDaz wrote:
redroo wrote:

Indeed. It wasn’t a fixture on our corporate hospitality days.


This is why companies tend to make decisions on research not anecdotes.

Here's my anecdote. I worked for a very large recruitment firm who provided corporate hospitality throughout Australia - from golf days, Australian Open, all football codes, cricket and Supercars. Different places had different favourites but I can tell you that the hottest tickets in Adelaide, Townsville, Darwin, Newcastle and Launceston were invites to the Supercars. It takes all kinds of marketing - AFL sponsorship would mean bugger all to half the country yet Virgin sees value in it.


This is true, and partly a reflection of how dispersed sport is in Australia. We do not have a 'national' sport that has a broad following across the country. Things like Rugby Union in New Zealand, cricket in India, soccer across Europe and Latin America. While obviously not every person in the country watches these sports, they have a very board following both geographically and demographically.

Just look at our football codes: AFL has limited viewership in NSW and QLD, while NRL is even more redundant outside of those two states. Rugby Union skews very heavily towards two groups: Sydney and Brisbane private schools and migrants from NZ, South Africa etc. The A-League is arguably our largest football competition by geographical spread, but receives very low viewership compared to the AFL and NRL.

Other than the Melbourne Cup I can't think of one sponsorship that will be seen by a relatively large portion of the population.



Interesting.

The banking crowd and fund manager crowd was NRL in Sydney and AFL in Melbourne. Archibald prize in NSW for non sport. The tennis in Melbourne was a bit of non event because it was during the summer vacation so limited wheeling and dealing. Grand finals were hot tickets in Sydney and Melbourne.
 
redroo
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Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 2:29 am

travelhound wrote:
NZ516 wrote:
utaussiefan wrote:
Virgin Australia owe $6.9 Billion dollars and are hoping to get a waiver on aircraft leases.
https://uk.reuters.com/article/us-healt ... KKCN22604D


Wow that is a big number. Up till the last few days many were saying the VA Debt burden was $5 billion now it has jumped up to $6.9 Billion. So the administration process is finding more and more outstanding liabilities. Plus the total number of creditors could reach 12,000 what an amazing number!!!.


Just doing the numbers. Using 126 aircraft as the datum point (CASA web site), VA have lease / finance commitments of approximately $15 million per aircraft.

On review of the CASA aircraft register web site I noted VA currently have 13 owned aircraft. Between September 2019 and 24 March 2020, VA financed approximately 18 owned aircraft through some type of syndicated loan arrangement (VA Borrower 2019 No. 1). Eleven of these aircraft were financed in March 2020.

My numbers show VA's financed aircraft have a valuation close to $3 billion. A such, VA would of had equity in its aircraft (if we use $1.9m for the aircraft leasing creditors) close to 30% before the pandemic crisis hit.

The VA Borrower 2019 No.1 loan syndicate is quite intriguing. It could suggest, Virgin Australia were burning through cash in the last half of 2019 and the first quarter of 2020. As such, they could have already been in a spiral of doom prior to the Contra virus groundings.

Once the Administrator starts cancelling leases on aircraft, penalties will start to be incurred. Considering the state of the industry the financiers are probably willing to negotiate a settlement with the VA administrators so that as many aircraft as possible are retained.

I’d suggest the financing of owned aircraft in 2020, could result in these fiancé arrangements being legally challenged in the courts. It could be argued there was a material change in the business between September 2019 when the first transaction and occurred and 24 March 2020 when the last transaction occurred.

I can see why the administrators do not want to hand aircraft back to the lessors / financiers. With nearly $1 billion in assets tied up in these aircraft, any value Virgin Australia does have could quickly fly out of the country if the lessors exercise their contractual rights.

Looking at the numbers, without the Contra virus VA would probably not have been able to survive. With a shortage of narrow bodies in the market prior to the pandemic a lot of VA's 737's would have simply flown out of the country.

I can see why VA's cornerstone investors were not willing to prop up the company. There was just no value there.

...and as for VA asking the government for $1.4 billion and SRB blaming the government for not giving VA a bail out. I think the numbers speak for themselves. Virgin Australia was already in a very difficult financial position prior to the pandemic.


This is not going to be pretty.



What’s interesting about the 2019 syndicate? Curious your thoughts.
 
81819
Posts: 2008
Joined: Fri May 23, 2008 9:13 pm

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 3:04 am

It means VA were raising cash through a bond raising and financing of owned aircraft.

We knew about the bond raising, but all thought this was directly linked to the buy-out of the remaining share in Velocity.

With VA's P&L showing the business being largely free cash flow neutral over the last couple of years, we now know that for VA to maintain their cash position they had to sell owned aircraft and use the remaining proceeds of the bond issue to shore up their balance sheet.

This suggests VA has been bleeding cash for a considerable period of time.

It also gives us a bit more light on the Velocity purchase.

With the purchase valuing Velocity at approximately $2 billion, VA could have used the Velocity asset to artificially inflate the value of Virgin Australia.

To put this into perspective, If Velocity is actually worth $2 billion, than QANTAS's frequent flyer program would be worth $6 billion (3x larger). Considering QANTAS had a market capitalisation just prior to the pandemic of just over $6 billion, it doesn't take much thinking to see VA probably overvalued Velocity. This was the type of accounting associated with the rise and fall of ENRON.

In essence, Virgin Australia could have been insolvent prior to the pandemic.
 
wstakl
Posts: 239
Joined: Thu Jun 09, 2011 7:51 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 3:32 am

Why didn't PER pull this stunt prior to the Covid-19 crisis? Pure grandstanding on their part. Some airport authorities need a good pick up the backside.
 
SenFinn
Posts: 15
Joined: Sat Dec 29, 2018 12:51 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 3:34 am

RyanairGuru wrote:
NTLDaz wrote:
redroo wrote:

Indeed. It wasn’t a fixture on our corporate hospitality days.


This is why companies tend to make decisions on research not anecdotes.

Here's my anecdote. I worked for a very large recruitment firm who provided corporate hospitality throughout Australia - from golf days, Australian Open, all football codes, cricket and Supercars. Different places had different favourites but I can tell you that the hottest tickets in Adelaide, Townsville, Darwin, Newcastle and Launceston were invites to the Supercars. It takes all kinds of marketing - AFL sponsorship would mean bugger all to half the country yet Virgin sees value in it.


This is true, and partly a reflection of how dispersed sport is in Australia. We do not have a 'national' sport that has a broad following across the country. Things like Rugby Union in New Zealand, cricket in India, soccer across Europe and Latin America. While obviously not every person in the country watches these sports, they have a very board following both geographically and demographically.

Just look at our football codes: AFL has limited viewership in NSW and QLD, while NRL is even more redundant outside of those two states. Rugby Union skews very heavily towards two groups: Sydney and Brisbane private schools and migrants from NZ, South Africa etc. The A-League is arguably our largest football competition by geographical spread, but receives very low viewership compared to the AFL and NRL.

Other than the Melbourne Cup I can't think of one sponsorship that will be seen by a relatively large portion of the population.


There is a small sport called Cricket that is truely national and Qantas have that one wrapped up from a sponsorship perspective. Once upon a time the Aust cricket captain was compared to the a Prime Minister in importance. The issue for all sports sponsorships is that Force Majeure will be called and no payments will be flowing while there is no play, the knock on of CV.
 
myki
Posts: 209
Joined: Wed Sep 05, 2018 6:43 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 4:52 am

FL420FT wrote:
A couple of charters coming into SYD this week ..
Egypt Air Arriving Sunday 26 April Departing Monday 27 April...

https://www.routesonline.com/news/38/ai ... pril-2020/

This flight is now going to BNE instead: https://www.routesonline.com/news/38/ai ... n-27apr20/
 
downdata
Posts: 589
Joined: Wed Feb 17, 2016 2:38 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 5:01 am

wstakl wrote:
Why didn't PER pull this stunt prior to the Covid-19 crisis? Pure grandstanding on their part. Some airport authorities need a good pick up the backside.


Perth airport is 100% owned by Australia Development Group which is in turn owned by Heathrow Airport and a public fund and a private fund. Qantas is owned by institutions, with top 5 shareholders being P/Es and investment managers such as BlackRock, Challenger, Westpac...etc. This is a conflict of business interests and has practically nothing to do with authorities and consumers such as yourself. Let the fund and P/E managers duke it out.
 
Fuling
Posts: 280
Joined: Sun Apr 10, 2011 4:41 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 5:46 am

myki wrote:
FL420FT wrote:
A couple of charters coming into SYD this week ..
Egypt Air Arriving Sunday 26 April Departing Monday 27 April...

https://www.routesonline.com/news/38/ai ... pril-2020/

This flight is now going to BNE instead: https://www.routesonline.com/news/38/ai ... n-27apr20/


Operated by SU-GEW, a 9 month old B789. Just left Cairo.
 
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Chipmunk1973
Posts: 267
Joined: Tue Jun 28, 2016 10:23 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 6:03 am

When VA started asking for hand outs from the federal government, it was widely acknowledged they had $4-5B in debt. There have been several recent reports in the media that now suggest the debt level is in excess of $6B and approaching $7B. I find it absolutely gobsmacking or incredulous that almost $2.5B of debt was “lost somewhere in the system”.

Considering that VAH is listed as a public company on the ASX, were they not subject to independent auditing on an annual basis? And that being the case, surely this should have been publicly disclosed in addition to announcement to the board of directors?

I’m not stupid enough to make a public allegation against one or more individuals because I have no desire to be spending time in a defamation court. But, given the limited facts known to date, things just do not appear “kosher”.

If critical financial information may not been declared to the board and the shareholders, then wouldn’t this warrant an investigation by ASIC?
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.
 
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Chipmunk1973
Posts: 267
Joined: Tue Jun 28, 2016 10:23 am

Re: Australian Aviation Thread - April 2020

Sat Apr 25, 2020 6:16 am

Just some other news for a change. Major earthworks have been underway at SWZ - The Western Sydney (Nancy Bird-Walton) International Airport for almost the last two months. Approximately 25 million cubic metres of dirt needs to be cut and filled to level the site for runways, taxiways, terminals, and support facilities.

Image

https://westernsydney.com.au/sites/default/files/2020-03/Bulk%20earthworks%20notification%20March%20April%202020%20FINAL.pdf
Cheers,
C1973


B707, B717, B727, B734, B737, B738, B743, B77W, A300, A320, A332, A333, A339, A388, BAe146, Cessna 206.

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