Virgin Australia - discussion

[SurfRail]

https://www.brisbanetimes.com.au/business/companies/virgin-australia-appoints-logistics-boss-paul-scurrah-as-new-ceo-20190206-p50vxv.html

Virgin Australia has appointed former DP World stevedores and Queensland Rail boss Paul Scurrah to replace John Borghetti as its chief executive.

The logistics veteran will take over the top job at Australia's second-largest airline on March 25, Virgin said on Wednesday morning. He will be tasked with stabilising the airline's finances after six unprofitable years.

[verbatim9]

No guarantee' on Virgin's Brisbane office as CEO declares review will explore all options


Couriermail/--------*>https://www.couriermail.com.au/business/no-guarantee-on-virgins-brisbane-office-as-ceo-declares-review-will-explore-all-options/news-story/c8be923d14b156b6aec0eaca6a5dc25f

No guarantee' on Virgin's Brisbane office as CEO declares review will explore all options

He's relocated to Queensland and is passionate about the Sunshine State, but Virgin Australia boss Paul Scurrah won't make any guarantees about the future of the airline's Brisbane head office.

Hayden Johnson, The Courier-Mail

Subscriber only

|

August 30, 2019 1:58pm

COURIERMAIL.COM.AU0:40

Virgin Australia: Airline to cut 750 jobs



A seventh consecutive annual loss has lead the airline to axe 750 jobs.

VIRGIN Australia boss Paul Scurrah will not guarantee the company's head office will stay in Brisbane and declared all options are on the table to make the airline profitable.

Mr Scurrah revealed this week 750 jobs on the company's corporate side would go and a wide-ranging review into every corner of the airline would aim to save costs.

[verbatim9]

Virgin Australia makes bizarre new cut following full-year results

News.com.au-------->https://www.news.com.au/travel/travel-advice/flights/virgin-australia-makes-bizarre-new-cut-following-fullyear-results/news-story/195ae914602fd8ef74841ed55b27e9e7

Virgin Australia makes bizarre new cut following full-year results

AUGUST 30, 2019 8:16AM

A seventh consecutive annual loss has lead the airline to axe 750 jobs.

news.com.au

If you prefer it when your captain is not speaking, you might be interested in Virgin Australia's latest tweak to its service.

After its seventh annual loss in a row, the cash-strapped airline is experimenting with a number of low-cost changes.

New chief experience officer Danielle Keighery told The Australian one change cost nothing at all.

"One of the things we've uncovered in some of the research we've been doing is people get sick of hearing or being disturbed by too many announcements in flight," Ms Keighery said.

"So we've actually cut down on those announcements, making sure we still cover the safety perspective but reducing the number of times we interrupt people. They're the sort of things you can do that don't actually cost more money but provide a better experience for our customers."

Virgin Australia says it is cutting down on in-flight announcements. Picture: AAP Image/David Mariuz. Source: AAP

One frequent trans-Tasman flyer, Huawei Australia comms boss Tony Brown welcomed the initiative, tweeting to the Herald, "Absolutely! Just get me to the destination and leave me in peace! Nothing more annoying than having the in-flight entertainment interrupted by Chief Steward droning on about "what a pleasure it is to have you on board" etc!"

Virgin's new approach is in stark contrastto the announcement-happy Air New Zealand.

Auckland man Matthew Hooton tweeted, "Air NZ is definitely one of the worst for this, including inane jokes to show how relaxed and Kiwi it is."

But Drew Broadly said he liked our national carrier's approach, tweeting, "As someone who has a great fear of flying, their announcements often explain when to expect bumps, how the landing and take off will be. It's been a godsend to have these and improve my confidence when flying."

Virgin Australia is making significant changes after announcing disappointing full-year results this week. Picture: AAP Image/David Mariuz Source: AAP

Virgin Australia also recently introduced a "nervous flyers club" — with a member's anxiety noted on their boarding pass — plus a new policy allowing parents of babies to carry on one extra bag.

The airline also recently staged its first "meditation" flight, in partnership with Australian wellbeing and mindfulness meditation leader Smiling Mind, including hot towels and hand massages.

The service tweaks come as the airline takes drastic action in a bid to reverse its fortunes.

This article originally appeared on theNew Zealand Herald and was reproduced with permission

[AnonymouslyBad]

No guarantee' on Virgin's Brisbane office as CEO declares review will explore all options

It wouldn't surprise me if they moved head office, but it would be an incredibly stupid decision.

The benefit of having your head office in a 'second tier' city (meaning Bris/Per/Adel) is that you can still recruit great talent, but at less cost than doing it in Sydney/Melbourne like everyone else.

I've worked for a company that tried doing this kind of relocation. They could spin it internally as reducing travel and other costs, and in the short term, it was sort of true.
Unsurprisingly, per supply and demand, the long term picture was different: corporate headcount and salaries both skyrocketed just to try and fill skill gaps that were easily filled in the smaller cities. The executive team had mostly already taken their bonuses and moved on of course. Gotta love the politics of the corporate world.

Some companies really need to be in Sydney/Melbourne in a hyper-centralised place like Australia, but I can't imagine Virgin is one of them. Their business is literally flying planes 

[#Metro]

If I remember correctly, Virgin Australia was paid taxpayer funds to locate its office in Queensland by the Queensland Government.

"It's now 15 years since the Queensland Government partnered with Virgin to establish their operational headquarters in Brisbane. And it's 15 years since Virgin Blue's first flight in Australia – from Brisbane to Sydney on 31 August 2000," Ms Palaszczuk said.

http://statements.qld.gov.au/Statement/2015/9/9/premier-welcomes-virgin-australia-upgrade-at-brisbane-airport

Wednesday, September 09, 2015
Premier welcomes Virgin Australia upgrade at Brisbane Airport

[ozbob]

Just some background for those who may not be aware.  Paul Scurrah's wife Nicole was the Chief of Staff of the former Premier Anna Bligh in 2009 and had been in a number of roles within the Premier's office prior to that.  Paul Scurrah was the CEO of Queensland Rail at that time. 

No surprise to me that Virgin HQ was set up in Brisbane ... 

[ozbob]

Exactly 19 years ago the first @VirginAustralia plane left #Brisbane for #Sydney. The new company was lured here by @SmartState1. Two decades on and Virgin's future is under a cloud. My first feature, in today's @courierMail. #Qldpol pic.twitter.com/h5IUIDXO8Q

— Hayden Johnson (@haydenjohnson94) August 31, 2019

[verbatim9]

Where is Australia's second biggest airline today?

https://www.couriermail.com.au/business/today-isnt-a-happy-19th-birthday-for-the-carrier-with-more-cuts-possible-after-a-wide-review/news-story/c5393d80421f283e087a00aef5312362

Today isn't a happy 19th birthday for the carrier, with more cuts possible after a wide review

On this day, 19 years ago, Virgin Blue's first flight left Brisbane bound for Sydney but, almost two decades later, the nation's second-biggest airline faces serious challenges leading to the loss of 750 workers. Here's the inside story.

Hayden Johnson, The Courier-Mail

August 31, 2019 9:00am

COURIERMAIL.COM.AU0:40

Virgin Australia: Airline to cut 750 jobs

A seventh consecutive annual loss has lead the airline to axe 750 jobs.

VIRGIN Australia staff should today be celebrating a hard-earned 19th birthday but instead, 750 workers at the struggling airline are anxiously awaiting departure.

It was on this day, 19 years ago, Virgin Blue's inaugural flight left the Brisbane Airport for the sky.

At 9.35am on August 31, 2000, its first flight, 'Disk Jockey 214', departed for Sydney.

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The funky and fresh Virgin Blue brand, with one route, two planes and 200 people, took off in Australia.

With the pop of Yellowglen champagne Sir Richard Branson's airline joined Impulse, which launched two days earlier, and established carriers Ansett and Qantas on the hotly contested eastern seaboard.

Fast-forward 19 years and 133 Virgin Australia Group aircraft crisscross the skies in a global operation supported by more than 10,000 people.

But as the adage goes, what goes up must come down.

In 2012, after a decade of growth, the financial state of the airline started to nosedive.

Now, seven straight years of losses, including $315 million this year, has forced newly-appointed chief executive officer Paul Scurrah to slash Virgin's corporate workforce by 30 per cent.

"It's never something you want to do," he said.

"Being viable and profitable is necessary for our future."

Every route will be reviewed, fleet size assessed and the order of 48 Boeing 737 MAX planes - tipped to cost $2.5 billion - reconsidered.

External factors including soft demand, high fuel costs and a weak Australian dollar has pummeled the airline in recent times, while a series of internal issues has compounded its problems.

"It's been a challenging time to be running the airline," Mr Scurrah said.

"There's been headwinds with things we can't control."

[Sir]https://cdn]Sir Richard Branson launches Virgin Blue's first flight, from Brisbane to Sydney, in 2000.

Since his appointment in March Mr Scurrah has moved to streamline the company's executive team and remove the duplicated workforce.

The former Queensland Rail CEO agreed it had been a baptism of fire.

"I'm really excited about the business despite the headwinds," he said.

"There is definitely a very viable and very sustainable business here at Virgin Australia."

While Virgin's machines frequent most Australian airports, the company's soul remains in Queensland largely thanks to former Premier Peter Beattie.

In 2000 Mr Beattie, knowing Sir Richard was looking for a home for his Australian empire, stepped up with a lucrative offer.

The opportunistic premier offered $10 million to persuade the British entrepreneur to base Virgin Blue in Brisbane.

The deal included a $6 million payroll tax waiver and $4 million in training and marketing packages.

In return, and now perhaps irony, Sir Richard would bring 750 jobs to Brisbane.

Almost two decades later Mr Scurrah insists, despite the shedding of 750 jobs, the company will remain in Queensland.

"We've got a long-term lease at Bowen Hills," he said.

"I made the conscious decision to relocate myself back to Brisbane.

"That should be a signal of how important Brisbane is to us."

Despite this, Mr Scurrah would not guarantee its head office would stay at Bowen Hills.

"Everything's under review," he said.

The AFL tragic, who sits on the board of the Gold Coast Suns, said the company needed to "pull the lever harder" on managing its capacity and flagged further redundancies.

"We are undertaking a full network and aircraft utilisation review that may result in broader cuts" he said.

[Virgin]https://cdn]Virgin Australia's head office at Bowen Hills is home to about 1300 employees including CEO Paul Scurrah.

Mr Scurrah inherited the difficult business model when he took the reins from John Borghetti in March this year.

After ten years with the airline, Mr Borghetti retired to spend more time restoring and running classic Porsches.

The former managing director, who sits on the board of Coca-Cola Amatil, declined to comment on his time with Virgin.

"When I walked out of there I thought right, that's the end of it," he told the Courier Mail.

Mr Borghetti arrived at Virgin Australia in 2010 with a plan to build a premium airline capable of competing with Qantas.

Virgin's vibrant red and blue paint scheme was replaced with the crisp white and silver splash, designed to lure the more serious traveller.

That transformation of Virgin from a no-frills flyer to a corporate aviation juggernaut has failed, Strategic Aviation Solutions chairman and industry expert Neil Hansford said.

"Its business model is confused," he said.

Mr Hansford said Virgin was caught between being a low-cost company or a serious carrier for business travellers and "Qantas haters".

Virgin's attempt to lure those travellers away from the flying kangaroo has not worked, thanks largely to the rival's highly successful Frequent Flyer program.

"One in every two Australians is a member of Qantas Frequent Flyer," Mr Hansford said.

"I'll travel Qantas to get my status credits so I can use their lounge.

"It made it hard for Virgin to try and entice people away."

[Former]https://cdn]Former Virgin CEO John Borghetti at his offices in Sydney. Pic: James Croucher

The future is bleak if Mr Scurrah is not able to turn things around, Mr Hansford declared.

"I think they will run out of money before they get back to profitability," he said.

"They've lost a billion-plus in seven years and they now have a bigger cost structure.

"He (Mr Scurrah) has got to reduce the fleet, he's got to cut the flying and he's got to start asking fundamental questions."

There are bright bolts among the dark clouds of Virgin's balance sheet, however.

Its revenue growth was the strongest recorded since 2015 and the company's Velocity Rewards program has 9.8 million members.

Mr Hansford said Virgin's 2014 takeover of trouble-plagued carrier Tiger was a mistake.

"Tiger should have just been left to go broke and disappear," he said.

The tarnished airline lost $45 million in the 2019 financial year.

Dropping the Tiger brand and incorporating it into Virgin is the only way it can effectively rival Jetstar, Mr Hansford believes.

Mr Scurrah acknowledged the branding of Tiger and its perception was under review.

"We'll make sure the Tiger product is seen as a very strong and very good value, leisure-based airline," he said.

Tourism Minister Kate Jones said she had assurances "Virgin have no immediate plans to cancel routes to Queensland".

"It's definitely disappointing," she said.

"But when it comes to aviation attraction, this government has more cash on the table to secure direct flights to Queensland than any government in our state's history.

"We'll continue to work with airlines to secure flights and grow our tourism industry."

There will be no party today to celebrate the airline's 19th year.

[AnonymouslyBad]

Ha, I had no idea Virgin got government assistance to set up in Brisbane. The more you know!
It still seems like a suitable location for their head office, though.

Probably true the Virgin Australia brand is a bit confused. I guess it's similar to how mid-range department stores are struggling.

I don't think Virgin's fares, inflation adjusted, are that different to what they were when Virgin Blue first launched. It's just that Jetstar and Tiger are even cheaper, so what we consider "budget" has changed. And Qantas' fare strategy is simply "compete with Virgin". It leaves Virgin in an awkward position, they can't do too much with revenue because their pricing is boxed in on both sides.

[#Metro]

They need to dump Tiger. I cant see the money in $99 fares

[verbatim9]

Rationalisation measures - Tiger closes Brisbane base.

Tigerair shuts Brisbane base, cuts flights in $99m crash. TIGERAIR will close its Brisbane base and dramatically slash its operations as Virgin Australia continues to cut costs following a $99 million loss in the first half of the year

[verbatim9]

It's been reported that Scurrah is also looking at replacing the (owned) 77W and (leased) A330 fleet with one widebody, right-sized to VA's operations. 

Current rumours across the internet are the A359.

https://www.reuters.com/article/virgin-australia-results-idUSL4N2AP1J3

[verbatim9]

It's been reported that Scurrah is also looking at replacing the (owned) 77W and (leased) A330 fleet with one widebody, right-sized to VA's operations. 

Current rumours across the internet are the A359.

https://www.reuters.com/article/virgin-australia-results-idUSL4N2AP1J3

Makes sense, more efficient modern aircraft for long haul routes to the USA and Japan. This will ensure better comfort for.passengers as well as gaining and retaining the lucrative upper tier markets on these routes.

[verbatim9]

Stuff.co.nz---->Virgin Australia latest airline to announce trans-Tasman reductions as coronavirus takes toll.

Virgin Australia latest airline to announce trans-Tasman reductions as coronavirus takes toll
John Anthony
15:07, Feb 26 2020
Virgin Australia will reduce capacity on the Tasman by 3 per cent.
RICKY WILSON/STUFF
Virgin Australia will reduce capacity on the Tasman by 3 per cent.
Virgin Australia has made sweeping changes to its network including reducing trans-Tasman capacity from April in response to falling demand in international travel due to coronavirus.

It follows similar moves by Qantas and Air New Zealand, which have both cut capacity domestically, on the Tasman and to Asia.

As part of its interim result announcement on Wednesday, in which it posted an A$89 million (NZ$93m) loss in the six months to December 31, Virgin Australia said it would reduce capacity on the Tasman by three per cent between April and June.

[verbatim9]

Inqld.com.au---> Turbulence ahead as Chinese govt grabs key stake in Virgin

The impact if the coronavirus has come to the front door of Virgin Australia, with one of its biggest shareholders effectively taken over by a Chinese provincial government to prevent a collapse.

It comes as Australian investors remain skittish over the impacts of the virus outbreak while S&P downgraded its ratings for Virgin from stable to negative.

The ASX plunged immediately on its open this morning with a fall of more than 2 per cent taking it back to the levels of May last year.

The economic impacts of the outbreak are expected to mean the Reserve Bank will cut Australia's official interest rates to a record low when its board meets tomorrow.

The trouble for Virgin is based on HNA Aviation, which holds a $200 million, (19.8 per cent) stake in Virgin Australia. The two struck an alliance in 2016 to codeshare and promote their routes.

HNA is China's fourth-largest carrier and was privately held. It was behind a boom in Chinese investment five years ago, which was reined in by government officials when its debt ballooned.

Over the weekend the Hainan Government and the China Development Bank moved in to manage the risks at the company.

The intervention, brought about by the slowdown in travel following the coronavirus outbreak and HNA's $US75 billion ($115.27 billion) debt, will almost certainly add extra pressure on the company to offload assets.

The company was already teetering before the weekend move and released a list in December of assets it was willing to sell. The Virgin stake was not included.

The Financial Times reported that HNA said it had been working to "save itself" for more than two years, but "had not been able to completely resolve its risks" and now faced an even more difficult situation because of the epidemic.

Hong Kong Airlines, also part-owned by HNA, announced over the weekend that it would cut 400 jobs while Virgin has cut its routes to Hong Kong.

Virgin's shares have fallen almost 30 per cent since the start of the year and opened at 11 cents.

The company said it would not comment on its shareholder.

[verbatim9]

Couriermail.com.au----> Virgin commits to Tigerair despite slashing routes, fleet

Virgin Australia to cut Tigerair flights over coronavirus concerns

Five routes flown by the low-cost carrier will be cut, its Brisbane and Sydney bases closed and fleet numbers reduced, Virgin Australia, which owns the Tigerair brand, announced on Wednesday.

The move has sparked fresh calls from commentators for Virgin, the nation's second-largest airline, to ditch or rebrand the Tigerair brand.

Virgin recorded a statutory loss of $99 million for the first half of the year and tipped it would face further financial headwinds.

Strategic Aviation Services chairman and industry commentator Neil Hansford criticised the group for continuing to breathe life into Tigerair instead of cutting its loose.

"At a time Virgin needs heart surgery, they're still using bandaids," he said.

"It makes no sense to keep Tigerair going one more day."

Mr Hansford said the Tigerair brand should be dropped or rebranded as "Virgin Lite", declaring Tigerair was "no threat" to Qantas's own low-cost carrier Jetstar.

"I don't know really why they're bothering," he said..

"You've got something with less than 10 aircraft against something with 80 aircraft.

"I think it's almost like a religious obsession to keep Tiger to have a low cost because Qantas has got one."

Brand Institute of Australia CEO Karl Treacher said the route, fleet and job cuts were not surprising and said it would "take a miracle to turn Tigerair around".

"In 2019 Tigerair was found to have the unhealthiest reputation in the airline sector – worse than Malaysian Airlines," he said.

"From the 100 most recognisable companies in Australia it finished 98th with only Adani and Centrelink faring worse.

"On the other hand, parent company Virgin Australia has a very healthy reputation and an incredibly strong brand locally and internationally."

Virgin however insisted it was committed to the future of Tigerair.

"For Tigerair to remain competitive in the budget travel market it's imperative the company maintains a low-cost base," a spokesman said.

"That is why we are accelerating the exit of Airbus A320s to become a single Boeing 737 fleet. Moving to a single Boeing 737 fleet will reduce operational complexities and provide shared efficiencies across the Virgin Australia Group in areas such as maintenance, engineering, crew resourcing and ground handling."

[verbatim9]

Executive Traveller---> Everyone is cashing in their points

[verbatim9]

Couriermail.com.au --->Chinese airlines in talks to buy embattled Virgin Australia carrier

CHINESE Government-owned airlines are considering an offer to buy the embattled Virgin Australia Group in last-minute takeover talks that could prevent the carrier's 'catastrophic' collapse.

Well-placed sources have told The Courier-Mail the Government, through China Southern Airlines, China East Airlines and Air China, is understood to be in discussions about purchasing the Queensland-based carrier, but no formal offer has been lodged.

An approach by the Chinese carriers could vindicate the Morrison Government's call for Virgin Australia to find a market-led solution to its cash problems instead of relying on a "blank cheque" from taxpayers.

A spokeswoman for Virgin Australia declined to comment.

The foreign-owned Virgin Australia Group wants the Federal Government to fork out $1.4 billion to save it from collapse.

It is understood Cabinet is split over how – or whether – they should save the airline and fear that if taxpayers step in, it could put off other investors.

The joint approach from two Chinese carriers would likely require approval from the Foreign Investment Review Board and, if approved, could prevent Virgin Australia from collapsing into voluntary administration.

It is thought millions of Velocity Points and flight credits owned by Australians would be lost if the company was put under administration.

Pressure is also mounting on the Palaszczuk Government to offer financial support to stop it from moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne.

Queensland Senator Matt Canavan declared it would it would be a "stain on the legacy of the Palaszczuk Government if it presided over Virgin going to Victoria" – but Ms Palaszczuk said the state government was continuing talks with the company and the federal government.

On Wednesday Virgin Australia Group managing director Paul Scurrah refused to speculate on voluntary administration or whether the company would have enough cash to pay entitlements.

Private frustration was building within the Government this week over what it believed were "strong arm" tactics and bluffing by the airline.

Virgin told the ASX on March 13 it "has a cash position in excess of $1 billion, with no significant debt maturities until October 2021 and no new aircraft deliveries until July 2021".

Singapore Airlines, Etihad, Chinese groups Nanshan and HNA, and Sir Richard Branson's Virgin Group have stakes in Virgin Australia.

Virgin on Thursday announced a further seven-day trading halt for its shares to continue talks on financial aid and restructuring alternatives to help it weather the crisis, but it didn't identify who the talks are with.

The Federal Opposition yesterday stood in unity with Virgin Australia in calling on the government to provide financial support.

Labor Senator for Queensland Murray Wattt declared it was "an issue of national interest" to keep Virgin Australia afloat, particularly as the nation recovers from COVID-19.

Senator Watt said the government should take an equity stake in the airline and ensure it is first in the queue of creditors to be repaid.

Senator Watt said Virgin was a "proud Queensland company" that was essential to the state's tourism.

"Maintaining two airlines is critical for a functioning tourism industry and jobs," he said.

[verbatim9]

Simple Flying--->Two Parties Interested In Virgin Australia Acquisition - Simple Flying

[ozbob]

The Australian --> Coronavirus: Virgin Australia on a new path to state rescue

The Queensland government has moved to ignite a rescue bid for Virgin Australia, offering $200m towards a bailout in the belief it will entice other states to come ­forward to back the nation's second airline.

The $200m — offered on the condition Virgin maintains its Queensland headquarters where 5500 people are employed — is well short of the $1.4bn sought by the airline but is designed to increase pressure on the Morrison government to reverse its refusal to provide an assistance package.

While the Palaszczuk government believes other states will pitch in to ensure a competitive aviation sector, State Development Minister Cameron Dick challenged the federal government to step up and back Virgin, which has suspended trading in its shares pending negotiations about its financial future.

Mr Dick said the country needed two airlines and "all governments needed to work together to ensure that remained the case".

Scott Morrison on Thursday challenged industry super funds to help Virgin navigate the corona­virus shutdown, even as the federal government announced a $165m plan to ensure a minimum network of domestic services continued to be offered by Qantas and Virgin.

The Prime Minister's plea was rejected by former union leader and Gillard government minister Greg Combet, who is now the ­nation's most powerful industry superannuation fund official.

Mr Combet, chairman of the $140bn IFM Investors and Industry Super Australia, said it was ­"important to understand that superannuation fund trustees have a duty to invest wisely and consider the appropriate returns for the risks involved".

"Investing in a distressed airline in the middle of a global pandemic is extremely high-risk,'' the former Labor government minister and ACTU boss told The Weekend Australian.

He said trustees of industry super funds had a legal obligation to invest in the long-term interests of members.

Mr Combet said Virgin's future required the government to carefully consider the national interest.

"I don't think you can allow Qantas to have a domestic aviation monopoly," he said. "It would be naive to think a new ­operator could come in and rapidly scale up to a 40-50 per cent market share. The barriers to entry will be profound.

"So the maintenance of two airlines is an issue that governments need to grapple with, and if they get the public policy settings right for the aviation sector in a two-­airline arrangement, that would provide private investors with greater confidence."

The federal government has called on Virgin's overseas shareholders — including Singapore Airlines, Etihad Airways, Nanshan, HNA Group and Richard Branson's Virgin Group, which control 90 per cent of the airline — to step up.

The Queensland government offer is about 12 times what it paid to lure the airline to base itself in the state 20 years ago.

"We are prepared to contribute financially to a national bailout but only if the federal government steps up, the headquarters remain in Queensland, Virgin restructures its debt and shareholders and bond-holders do their bit," Mr Dick said. In 2000, the Beattie Labor government paid $10m to entice the then Virgin Blue to make Brisbane its base, or about $16m in 2020 terms.

A senior Queensland government source said that if the federal government let Virgin go into administration, the state government would still be prepared to invest that $200m or more if needed, to support a new operator, so long as it was headquartered in Queensland. "Virgin is one of the Queensland family jewels — we will roll out the bazookas to save them," the source said.

The comments came as the Courier-Mail reported the Chinese government, through China Southern Airlines, China East Airlines and Air China, had held talks about a Virgin buyout, but no formal offer had been lodged.

Deputy Prime Minister ­Michael McCormack on Friday again talked down a government bailout for Virgin, saying the government would prefer a market solution. "We remember back in 2013-14 when Qantas was struggling and they, too, wanted some assistance," Mr McCormack said.

"Fortunately they were able to re-energise through good management and get their books back into the black and very healthy. We want to see that situation with Virgin too."

Speculation Virgin could be lured to Victoria for a better deal and targeted tax incentives was dismissed by the Queensland government source.

"It would be nonsensical to try to save money by moving south to a place where commercial leasing costs are higher, residential housing costs more and congestion is worse for workers," the source said. "But we do expect Victoria and other states should contribute to support a second national ­airline."

A spokesman for Victorian Premier Daniel Andrews would not confirm if any approaches had been made to the airline.

A Virgin Australia spokesman would not comment on the Queensland offer.

[verbatim9]

ABC News----> Virgin Australia offered $200m coronavirus lifeline by Queensland Government - ABC News

[verbatim9]

^^Re CM article. It does make business sense having a Chinese Carrier taking over Virgin Australia. They can guarantee interline connections and inbound tourism (groups) etc...But from a political perspective it's risky. Especially as Chinese Airlines are CCP guaranteed. They could also subsidise Virgin Australia strategically and run Qantas into the ground. Then Qantas would need bailing out. Pity DL and their shareholders won't take over the Airline?

[ozbob]

https://twitter.com/MarkBaileyMP/status/1251425596040597504

[ozbob]

Couriermail --> Australia to keep two domestic airlines even if Virgin Australia does not survive

Australia will retain two domestic airlines even if Virgin goes under, with the Government determined to avoid a Qantas monopoly which could see the return of $1000 flights between Melbourne and Sydney.

News Corp understands the Government has established principles for navigating a potential Virgin collapse, which includes a requirement for two commercially-viable airlines to operate in Australia's domestic market.

The airlines would service capital cities and main regional hubs and would begin increasing capacity after Australia emerged from the coronavirus lockdown in coming months.

But the Government will not provide the $1.4 billion cash bailout Virgin is asking for, believing the proposed three-year loan would never be repaid, and has declined to take an equity stake in the airline.

The Government also has no interest in ensuring there is a second Australian carrier operating on international routes, believing Qantas already faces appropriate competition from other global carriers.

News Corp is aware of several private equity companies making inquiries about Virgin, which is drowning in $5 billion in debt.

And sources in the superannuation industry confirmed some of the cashed-up industry super funds were considering whether to invest in the airline, which employs 10,000 people – 8000 of them currently stood down due to the coronavirus crisis.

The Treasury is considering establishing a fund to provide assistance for distressed businesses which are deemed too important to Australia's strategic interests to be allowed to fail.

However, it is not clear if Virgin could tap the fund in the future, with the Government insisting it would only offer assistance as a last resort, and on a sector-wide basis.

Four of Virgin Australia's five largest shareholders - Etihad Airways, Singapore Airlines, and Chinese companies Nanshan and HNA, which each hold about 20 per cent of the company – have declined to bail it out. Sir Richard Branson's Virgin group, which holds around 10 per cent, is wavering but is unlikely to put substantial capital into the company he founded in Brisbane in 2002.

Any new Australian conglomerate which could emerge as Virgin's new owners might be looked at more favourably in Canberra than the overseas owners, which include several billionaires including Sir Richard, and the owner of Nanshan Group, Song Zuowen, one of China's richest men.

"We are not putting money into foreign billionaire's pockets,'' one Government source said.

With Virgin's shares in a trading halt after falling to eight cents, the issue could come to a head in the next two weeks.

The Government has made clear it does not want a repeat of the situation in 2001 when Ansett collapsed and Qantas drove up prices.

Deputy Prime Minister and Aviation Minister Michael McCormack said he did not want Australia to have only one airline.

"I don't want to see that situation,'' he told News Corp.

"I want to see a viable, second airline operating in Australia. Every Australian wants competition.''

He reiterated his hope there would be a "market solution'' for Virgin.

The airline in Australia has been haemorrhaging money, posting losses for the past seven years.

New CEO Paul Scurrah has changed the airline's strategy, pivoting away from the full-service, direct competition model of his predecessor John Borghetti, and taking the airline closer to its founding position of being a no-frills low-cost carrier.

A senior source within the $3 trillion industry superannuation sector told News Corp the super funds could potentially invest in Virgin, but would require Government assistance to drive down or forgive the airline's debts.

The source said the funds, either on their own or through their investment vehicle IFM, could potentially buy in now and add the company to a portfolio which already includes airports, ports and tollways.

Alternatively, the funds could get involved in a "trade sale'' if the airline was sold off to private equity buyers. However, IFM chairman Greg Comet has downplayed suggestions of super fund involvement, telling The Australian such a move would be "high-risk'' and that funds had a duty to invest their members' money wisely.

Aviation consultant and former Qantas chief economist Tony Webber said he was aware of private sector interest in Virgin.

"I've been getting a lot of calls from investment banks sniffing around Virgin...a lot of different players are looking at that possibility,'' he told News Corp.

"They're looking at whether the shares are going cheap relative to the value of the organisation.''

Dr Webber said fares would "undoubtedly'' rise if Qantas ended up in a monopoly.

He said Virgin currently held about 35 per cent of the domestic market, and that Qantas would not take all of that capacity on, if Virgin was to go under.

That would also lead to price increases.

"Qantas will take on a bit of that 30 per cent, not all of it. Given it won't take on all of it, fares will go up,'' he said.

"Supply drops in the market, competition moves from a two-player market to a one-player market, the competition effect alone will increase fares from 10-15 per cent.''

The Queensland Government has offered a $200m incentive to Virgin if it stays headquartered in Brisbane, but the money is nowhere near enough on its own to save the company.

AUSTRALIA'S AIRLINE HISTORY AS VIRGIN AUSTRALIA IN LIMBO
WHO OWNS VIRGIN AUSTRALIA AND WHERE ARE THEY BASED:

20 per cent: Etihad Airways (United Arab Emirates)

20 per cent: Singapore Airline (Singapore)

20 per cent: Nanshan Group (China)

20 per cent: HNA (China)

10 per cent: Virgin Group (Sir Richard Branson/United Kingdom)

10 per cent: minor shareholders in Australia

AIRLINE TRAVAILS:

Pilots' strike: An all-out war erupted in 1989 when pilots from the four main airlines enacted work bans as part of a campaign for a 30 per cent wage increase, and later resigned to head off legal action against them. The then-prime minister the late Bob Hawke allowed the airlines to bring in overseas strikebreaker pilots and called in the RAAF to keep vital passengers links open, including between Tasmania and the mainland. The airlines won, but the strike paved the way for airline deregulation the following year, which put all the major airlines under commercial pressure.

Ansett: The company founded by Reg Ansett back in 1935 was taken over by Air New Zealand in February 2000. But it had an ageing fleet, bloated cost structure and maintenance problems, and went bust on September 14, 2001 after the Howard Government refused to bail it out. The grounding was unrelated to the World Trade Center terror attacks which had happened three days before. The Government imposed a $10 "Ansett levy'' on every airline ticket sold in Australia for the next 10 years to recoup $758 million in lost entitlements for Ansett's 12,000 sacked employees.

Impulse: Started in Newcastle by the McGowan family in 1992, Impulse was an independent, low-cost carrier which provided competition to Qantas and Ansett along the eastern seaboard. The collapse of Ansett allowed it to expand, but it became increasingly involved with Qantas through lease arrangements and by November 2001, was absorbed into Qantas' regional airline QantasLink. Its fleet of aircraft were used by Qantas when it launched its own low-cost carrier Jetstar in 2004.

Qantas: In 2014, Qantas went to the Abbott Government seeking assistance and a debt guarantee after failing to turn a profit and facing half-yearly losses of $235 million. The Government refused to provide any cash, although did tweak the Qantas Sale Act to allow more of the company to be purchased by overseas interests although 51 per cent of the airline's controlling company must remain in Australian hands. CEO Alan Joyce cut 5000 jobs and stripped $2 billion in annual costs, and Qantas turned a profit by the next year.

POTENTIAL VIRGIN OPTIONS:

*Corporate investors or superannuation funds buy out the company at its current low share price and take over its fleet and staff. This would clear out the current shareholders. However the new owners would have to attempt to negotiate to clear the $5 billion in debt and other costs such as international leasing obligations.

*The company enters into a Deed of Company Arrangement (DOCA) with new investors striking a deal with the company's creditors to forgive the debt. A DOCA could be triggered by the company going into voluntary administration. This would allow the company to continue to operate with current staff and assets but without having to service a mountain of debt.

[verbatim9]

It's looking more likely that Virgin will go into voluntary administration.

[ozbob]

https://twitter.com/7NewsBrisbane/status/1251974419418771456

[ozbob]

https://twitter.com/JoshBavas/status/1252031990926213120

[ozbob]

Melbourne Age --> Virgin Australia set for voluntary administration

Virgin Australia is preparing to go into voluntary administration, sources say, unable to survive under the weight of enormous debts and starved of cash by the coronavirus travel shutdown.

Australia's number two airline had already appointed Deloitte to looking at potential restructuring options and the accounting firm is expected to run the administration process, including trying to find new owners to keep it flying.

Virgin's board of directors were meeting on Monday. One well-placed source said the announcement of it going into administration was "imminent".

Virgin employs around 10,000 people directly and supports another 6000 jobs indirectly. ...

[verbatim9]

The point business was known to be profitable hopefully they can keep this going for gift redemption.

[verbatim9]

The might keep t going as smaller domestic airline ?

[ozbob]

https://twitter.com/ozbob13/status/1252250480505262080

[ozbob]

The Australian --> Ailing Virgin's crash landing as plea for $100m rejected

Virgin Australia has been put into voluntary administration after the Morrison government rejected an 11th-hour appeal for a $100m grant to keep it afloat for another two weeks, as private equity firms circle the airline.

A board meeting of international shareholders late on Monday signed off on the move to put the company into administration in the wake of coronavirus travel restrictions shutting down the airline and there being no prospect of a government bailout.

The dramatic development has plunged 16,000 direct and indirect Virgin jobs into greater doubt and capped a day of turmoil for Australia's aviation and tourism industries that also left travellers with price rise fears.

Aviation consultant Neil Hansford said airfares might climb "10 or 20 per cent" under a monopoly, but would not return to the days of $700 prices to fly one way from Sydney to Melbourne.

It is understood that a legal workaround is being sought to ensure that 10,000 directly employed staff and 6000 indirectly employed workers stood down last month can still access the $1500 JobKeeper payments now the company is in administration.

Two serious bidders are believed to be in play, including Australian-run private equity firm BGH and another consortium involving Etihad Airways.

A senior government source said voluntary administration was now believed to be the best option for the airline as it would virtually dissolve its foreign ownership and resurrect the airline as a low-cost domestic carrier.

"Under this model, our preferred outcome is that the airline emerges as a competitor with Qantas but not costing the government a dollar," a senior government source said.

"Labor, on the other hand, wanted to line the pockets of foreign owners and billionaires."

The Morrison government has sent mixed messages to the airline since The Australian revealed last month it had sought a $1.4bn loan to ensure it could survive the ¬pandemic.

The Australian can reveal that the airline's executives sought a last-minute grant of $100m from the federal government over the weekend so it could keep paying bills for another week — two weeks at most — and avoid administration while it worked through potential commercial deals.

Virgin's descent into administration came as the NSW and Queensland governments duked it out over separate offers to rescue the airline. The Queensland government has warned NSW to "back off" Virgin Australia, as NSW revealed it wanted to entice the headquarters of the airline from Brisbane to Sydney.

Queensland State Development Minister Cameron Dick said Queensland would not let it go without a fight.

The Queensland government put $200m on the table as a rescue package for Virgin, contingent on federal government backing and Virgin's headquarters staying in Brisbane. There are 5000 Virgin jobs in Queensland, including 1200 jobs at its headquarters in Bowen Hills. "(There is) Nothing more dangerous than Queenslanders with their backs to the wall ... we will stop at nothing to ensure the headquarters of Virgin remains in Queensland," Mr Dick said.

The NSW government has confirmed it is in talks with Virgin about giving the cash-strapped ¬airline a possible financial lifeline, but only if it moved its national headquarters from Brisbane to Sydney.

NSW Premier Gladys Berejiklian also signalled her interest in providing financial support for Virgin on the condition the airline relocated to Badgerys Creek where Western Sydney Airport is under construction.

A business park planned for the Badgerys Creek site would be able to house various types of companies with commercial office space and campus-style accommodation.

The Australian understands private equity firm BGH is a frontrunner to buy the airline. Suggestions that the Chinese Communist Party-owned China Southern Airlines could step in were dismissed by senior cabinet ministers as "never going to happen".

The likely outcome is that any buyer would move to split the businesses with the $1bn frequent-flyer program Velocity expected to be sold off and the airline scaled back to a low-cost domestic carrier.

The airline was put into a trading halt last week as it sought to find a private sector deal. Creditors are likely to walk away with little more than one cent in the dollar on the $5bn debt carried by the airline.

It is understood that Deloitte has accepted the administration role and the appointment will see the existing management team remain in place.

Much of the focus remains on the restructuring of Virgin's debt.

Even so, the collapse of Australia's second-biggest airline has sent shockwaves through the aviation and tourism industries, although it is understood there is an expectation that the underlying business can be saved through a debt restructure with support of an equity injection.

Both secured and unsecured creditors are expected to take a significant haircut.

Virgin Australia is currently owned by Etihad, Singapore Airlines and Chinese airlines HNA and Nanshan Group, which all hold about 20 per cent.

Richard Branson's Virgin Group owns 10 per cent and listed equity investors the remainder. The identity of the airline that would be involved in the deal is known not to be Mr Branson's Virgin Group, founder of the Virgin Atlantic airline.

NSW Nationals MP David Gillespie said he was "disappointed that it's come to this" and the Morrison government made a miscalculation in refusing to provide the airline with the $1.4bn loan it wanted to help ride out the pandemic.

"I'm disappointed that we weren't able to support their request for help," he said. "We had two major airlines going into the coronavirus epidemic but it looks like we'll have just one coming out the other side.

"Regional Australian MPs will be disappointed ... The market solution probably means administration and a sell-off, and this is when the vultures start circling and the sharks start picking away at the profitable bits and they jettison the less profitable routes."

While the airline was the victim of the coronavirus, with chief executive Paul Scurrah having already embarked on a restructure plan before the pandemic hit, cabinet was split over whether to rescue the airline.

"It didn't trade its way into this mess," another senior government source said. "It was the government that shut down the skies."

The government has said it would not let Virgin fail and leave Qantas with a virtual monopoly.

"I think (Australian Competition & Consumer Commission chairman) Rod Sims will be all over Qantas like a bad-fitting suit," Mr Hansford said.

The move by Virgin extinguishes its current foreign ownership, leaving expectations it will emerge from administration as a scaled-down, low-cost, domestic airline once the skies are opened up again post-pandemic.

[ozbob]

Virgin Australia enters voluntary administration

> https://www.asx.com.au/asxpdf/20200421/pdf/44h3kq7kcb12fl.pdf

[ozbob]

https://twitter.com/richardbranson/status/1252372377276563466

[ozbob]

https://twitter.com/VirginAustralia/status/1252384565932380160

[verbatim9]

Delta came out on top after voluntary administration. Looks like Virgin will as well. Maybe as smaller Airline?

[verbatim9]

Velocity Frequent Flyer has been preserved and not subject to Voluntary Admin

[verbatim9]

Velocity Frequent Flyer--->

An important announcement about your Velocity membership

As a valued member of Velocity and a keen traveller like us, we're committed to keeping you updated throughout these uncertain times of coronavirus and reduced travel.
We wanted to share some information with you regarding temporary changes to the Velocity program and what this means for you.
You may be aware that some of the Virgin Australia Group companies have entered Voluntary Administration. Deloitte has been appointed as the administrators, meaning they have assumed responsibility for the business and operations of those companies in administration.
The intention of the administrators is to bring the relevant Virgin Australia Group companies out of administration as quickly as possible and return to normal operations.
Although Velocity is owned by the Virgin Australia Group, it is a separate company and it is not in administration. That means we're still operating, but we've made some temporary program changes in the interests of members.
We've made the difficult decision to pause all redemptions for an initial period of four weeks, effective immediately. This means you won't be able to redeem your Points for rewards during the pause.
We know how much you love to plan your travel and use your Points to redeem flights, however the ongoing travel restrictions and reduced flights have limited the options for you to use Points for flights. We're seeing more members use Points to shop online for items such as gift cards, electronic goods, and wine. This unexpected demand has made it difficult for our suppliers to provide these offers and limits the availability for all members to redeem their Points.
What you need to know:
•   Your Points aren't going anywhere. They will remain in your account.
•   Your existing Points will not expire through this period. We will be extending the expiration period for your existing Points by the timeframe of the pause.
•   You can continue to earn Points with our partners, although you won't be able to redeem them during the pause.
•   These changes take effect immediately. Although the initial timeframe for this restriction is four weeks, this period may be extended. We will come back to you with an update as soon as we can.
What's next?
Velocity has a trustee in place to look after the interests of members. We will continue to assess a range of options for the program and we want that to include a continuation of our long-standing partnership with Virgin Australia.
We thank you for your patience, loyalty, and understanding in these challenging times.
The Velocity Frequent Flyer Team.

[ozbob]

Gold Coast Bulletin --> Virgin Australia in it for the long haul, vows CEO

Management and staff alike are confident Virgin Australia's company culture means it won't suffer the same fate as Ansett as its boss says the country's second-largest airline will rise from the ashes to become Qantas's strongest-ever competitor.

VIRGIN Australia boss Paul Scurrah says the country's second-largest airline will rise from the ashes of voluntary administration to become Qantas's strongest-ever competitor.

Just hours after formally putting Virgin in the hands of accounting giant Deloitte, an upbeat Mr Scurrah scotched suggestions the debt-laden carrier would fail, and talked up plans to keep its planes in the skies, protecting its 10,000 employees, frequent flyers and ticketholders.

"This is a tough day for our airline, but it's certainly not the end, we're certainly not collapsing," he said.

With more than 10 potential investors hovering over the airline's books and its $5 billion debt hole, administrators were confident of restructuring Virgin into a leaner operation within months.

And the Federal Government – which does not want to set a precedent bailing out private companies, especially ones with majority foreign shareholdings – appointed former Macquarie chief executive Nicholas Moore to work with Virgin and Deloitte to find a market-led solution.

Treasurer Josh Frydenberg, who did not discuss the move with either company before the announcement, said Mr Moore's No.1 job was to engage with administrators to ensure two major commercial airlines operated on domestic routes.

"This is not liquidation. This is not Ansett. This is not the end of the airline," he said.

Virgin's popular Velocity Frequent Flyer program, which is a separate business and not entered into administration, was put on a four-week pause yesterday.

Administrator Vaughan Strawbridge said all frequent flyer points would be preserved and their expiration period extended.

He could not guarantee customer credits in the long term, but said they all currently applied and could be used for new bookings.

Current bookings were also planned to be honoured while the airline continues flying a reduced schedule underwritten by the Federal Government and once borders reopen.

He said there were no plans for redundancies and the company's 10,000 employees would keep getting paid wages and the JobKeeper payment.

"Hopefully we can maintain all the jobs or as many as possible coming through this process," he said.

Mr Scurrah, who will still lead Virgin's operations during the restructuring, revealed the airline made eight proposals for a federal government cash injection, whittling down the original request of $1.4 billion to $200 million on Monday.

But when the Government rejected that offer, the airline had no choice but to enter administration, he said.

"We didn't trade our way into this problem we had our oxygen supply completely cut off," he said.

Opposition Leader Anthony Albanese called on the Government to fight harder to save Virgin and protect up to 16,000 jobs linked to the airline, saying it would be an investment with a return in jobs and future economic growth.

"The consequences ... if you take out Virgin Australia from regional flying, particularly in a place like Queensland, it will have significant impacts on employment growth in those regional cities," he said.

Flight manager Jeremy Longton, 36, and his fiancee Cara Evans, 28, have collectively worked for Virgin for 19 years.

The couple, who met at work, were stood down in response to the pandemic but still consider the company their family.

"The good thing about the Virgin culture is that there is a really good leadership structure and everyone is supportive of one another," Mr Longton said.

"It's bigger than just a business, and I think that's why you're seeing people come out so passionately to support it."

Mr Longton said he knows dozens of Queensland families where multiple people worked for Virgin.

"That's one of the biggest challenges I think a lot of families will face, that both livelihoods are with the one organisation," he said.

"A lot of hype has been created by the media that it is a foreign-owned company which has pushed a bit of a negative sentiment to Virgin unfairly.

"They employ 10,000 direct employees, 6000 contractors, plus all of the jobs that are created through tourism not only in tourism but around Australia.

"It's still an Australian business because it operates within Australia and supports Australian livelihoods."

Mr Longman has secured part-time work at Woolworths but hopes he and his partner will return to normality soon.

"It's been a shock to the system," he said.

"We used to meet a lot of different customers every day, looking after our own people and transporting them around the country is a real privilege and we would really look forward to doing that again once the pandemic lifts and we can get back in the air."

[AnonymouslyBad]

Yeah, I think Virgin will come out of administration just fine. It's ironic, but they have nothing of value to liquidate anyway, so they can get away with murder on their debts if it keeps the doors open and the cash coming in.

I'd be surprised if the 'new' Virgin is even half the size of the old one. The talk of a full-on budget airline sounds like a mistake, though: I think it'll be a death sentence if they drop frequent flyer, Tiger-ize the whole lot, or even try to compete with Jetstar. Virgin does ok when they stick to the mid market and does badly when they don't.