Cedar Jet

So much talk about propping up Virgin, Qantas jacking up prices scare tactics turning it into this big bag sleeping giant monster that will awaken should Virgin go under. Get a grip..Qantas are Australian and will only need to employ more Aussies if Virgin goes down. Also nobody is addressing the fact that Virgin have been around for 20 years and have failed to run a competitive airline. They have been mismanaged yet year after year their board saw fit to approve budgets and strategies put forward. Why should the Aussie taxpayer help them...let alone they are over 90% foreign owned! it just makes zero sense - unless of course you want to Qantas bash or turn this into a left wing battler employee argument, which is being currently shoved down our throats ad nauseam. Virgin failed due to no other reason than their ineptness and inability to operate a profitable business. Full stop. We all want two airlines and Aussies kept in jobs with stable careers but if they can't operate successfully and at a profit...what for? Am I missing something here?? This scenario will only repeat in the next 5 years if they are kept as is and bailed out. Need to start again with a sound business model and plan ONLY if a second airline can be viable. Focus on why Virgin failed for just one minute eh? Is Hungry Jacks needed and operated just to keep McDonalds prices down?

CPMaverick

No, they can choose to just raise prices and give more money to their shareholders.... part of whom are foreign. Which, if they are a monopoly, they absolutely will.

Australia needs a second large carrier... all reasonable parties agree on that. You can make the case that VA deserves to fail, but if they do, they WILL be replaced by another foreign-owned entity.

It's not like Qantas has never asked for help, and all the reasons QF did before are valid. Even moreso considering that this airline grounding is unprecedented.

https://theconversation.com/qantas-c...wnership-23307

McDonalds has tens of thousands of restaurants it competes with, comparing them to an airline that would have exactly zero competitors without VA/TT (lets face it, Rex is not a competitor) is so far off base it is difficult to take you seriously.

Cedar Jet

They are a basket case failed airline.If they weren't they wouldn't be in this predicament. Very simple. All other arguments are secondary. Either run it properly at a profit or don't-simple. I'd wager nobody on FT would invest a cent into VA yet the demands others do is astounding hypocrisy, namely our tax dollars. Therefore even harder to take your argument seriously. You've immediately over analysed and missed the point; Hungry Jacks is also there to make a profit......a fact seemingly never entertained by virgin.

ozztraveller

Why do you feel so angry towards the Government helping out a business many of us like. There are many years Qantas has not made any profit but I don't feel angry at them. .

Cedar Jet

"The Lord helps those who help themselves". Virgin has had 20 years to do so and has failed. Why should the government have to come to the rescue when they are the masters of their own fate? Ludicrous proposition that the Government put on its red superman cape and come to the rescue just because it can. Let their investors do it or let them fold. Qantas may have sought help in the past but they've gone above and beyond proving they are up to the task in a very short space of time. Further that was dire....there wasn't a viable alternative airline at the time with the capacity. Now that would have been a disaster. In this case Qantas is very up to the task of taking up the slack, thus hardly dire.

Beano

​​​​​​You lost your wager
i own shares in Virgin Australia
took up the issue that had too

ozztraveller

There is no way the current situation is their own doing and given time they may have been in a different situation. From a customer point of view I cannot fault them and over the years they have implemented many ideas into their frequent flyer program like family pooling which gives the customer better value for what they earn. End of the day I hope we have two airlines and I would rather keep what I know then take the risk on something I don't.

CPMaverick

That is patently false. 95% of airlines can't make it through 3+ months of groundings. Almost every airline in the world needs a cash infusion right now.

If this was 2015, Qantas would need a bailout to survive this. They are one of the very few airlines that managed to get a cash loan on assets before everything went belly-up. Good on them and they deserve to have a leg up going forward. But don't say this is something an airline should always be prepared to survive. That's simply not true. This is unprecedented and if your statement was true and no airline got help, there would be 3 or 4 airlines left in the world after this.

SKRan

The underlying big question is - does Australia need 2 major airlines?

Many countries with the size of Australian territory or population is OK with one major international airline. For example, India and Canada. Kingfisher, Jet Airways and Canadian Airlines all failed to survive. WestJet isn't significant. (not a judgement, Jet and Kingfisher were genuinely good airlines). Only major economies with dense population everywhere could hold up 2 or more international airlines - South Korea, Japan, Taiwan and the UK. That is rare.

Australia is in a unique location with strong business and cultural links to Europe, America and Asia for sure. Virgin Australia is foreign owned so it wouldn't be a problem for other foreigners to enter the market. Maybe it's time to regulate Qantas better and open the market for any competition. After all the Aussie pilots and crew must be the best, that's why everyone wants to get in.

Cedar Jet

Hello...they've had 20 years?

CPMaverick

If they want to maximize their tourism industry and support business activity, absolutely. That is why all levels of government have said that even if VA fails, they need a replacement for it and relatively quickly. Do they both need to be equally big? No, but that wasn't the case anyway.

I'm not familiar with the Indian market but WestJet is absolutely significant. They are 66% the size of Air Canada by fleet size, and serve 55% of the destinations. They have major alliances with US airlines that allows them to compete with AC. They are a major airline and sustain competition with AC in all major markets and many minor ones.

Comparatively, VA is 73% the size of Qantas by fleet size and 65% by destination. WestJet is a very good comparison with VA actually, as Canada is a similar country in terms of size, demographics, and population. A country needs strong competition amongst its most popular tourist and business airports to thrive.

Air Canada is in good shape with $7B in cash, but Canada has already pledged to make sure both WestJet and Air Canada make it through this. Because it is vital.

perthite

I'm interested in Virgin surviving (however that happens), in part largely to see what Qantas do next. If the following conditions come to pass:

1) International Travel does not pick up to any great extent
2) Virgin remain around as a domestic competitor

I think Qantas will be in a tricky financial position.

OZFLYER86

so it's ok for qantas to be 49% foreign but virgin can't be 90% ?

No airline or travel business can refund any monies. They don't have your monies.

Virgin Australia is an Australian flag carrier, just like Qantas. Qantas is not that special. Not even a very good airline, which nearly went broke few years back.

No airline should be given any money, but Virgin own roughly 1/2 of their 737 fleet & 80% of their 777 fleet.

The owners of their leased aircraft are going to get stuff all if virgin is wound up. Admin might be way to go.

All virgin staff need to take a big pay cut & also staff numbers will have to be reduced. They can be paid more, when profits resume.

There is money to be made on golden triangle.

OZFLYER86

Qantas australian ? Not really.Maybe 51%

You could say that Qantas has been mismanaged. They almost went broke few year back.

Qantas has for so long been a cost plus type of business. Only virgin since ansett fell over, have kept them competitive.

Remember when Compass Mark 1 in 1990 or 1991, came along & offered incredible fares BNE/MEL of AUD$330 return, which at time was roughly 1/2 of what others offered as their cheapest fares. AUD$330 must be equivalent of AUD$2000 or mroe these days.

Our domestic tourism industry needs cheap airfares. Qantas/Virgin balance cheap fares against high fares business types pay. Many cheap leaisure fares, are below cost, but are offset by business fares(not business class) which can be as much as 10 times the cheapest fare.

Actually think Qantas has a big problem. A Virgin mark 2, will have less costs than Qantas & no one wants to pay high fares these days.

perthite

If there is a Virgin Mark 2, Qantas could end up in a world of pain. They've run out of assets to sell to fund share buybacks!

Qantas will be working the room to make sure that doesn't happen