Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > Virgin Australia | Velocity
Reload this Page >

Virgin Australia Goes Into Voluntary Administration

Virgin Australia Goes Into Voluntary Administration

Old Jun 9, 2020, 7:40 pm
  #31  
 
Join Date: May 2006
Location: GA
Programs: VA-PLT, QF-GLD, DL-GM, UA-ex1K, AA-exPLT, HH-DM, IHG-PLT, MR-GLD
Posts: 8,246
Originally Posted by markis10
With Delta retiring the 777 we wonít be seeing them back to Sydney anytime soon, I wonder how that will affect Virgin in the future.
Delta's future schedule already shows the A350 on this route. I doubt they will drop SYD.

Most airlines will downscale AUS-USA flights however (QF is dumping A380 for example), and VA can't really do that (they own their 777 and had minimal routes already). So it will be interesting to see how they handle it.
CPMaverick is offline  
Old Jun 11, 2020, 2:58 am
  #32  
IHG Contributor BadgeMarriott Contributor Badge
 
Join Date: Apr 2006
Location: BNE
Programs: QF Gold, VA Gold, IHG Spire, Accor Plat, Marriot Plat, Hilton Diamond
Posts: 2,282
Originally Posted by CPMaverick
Delta's future schedule already shows the A350 on this route. I doubt they will drop SYD.

Most airlines will downscale AUS-USA flights however (QF is dumping A380 for example), and VA can't really do that (they own their 777 and had minimal routes already). So it will be interesting to see how they handle it.
I note they have intended to run the A350 but I doubt it will be profitable, the aircraft is severely load limited on the route but thatís unlikely to be an issue post COVID 19 for awhile. The 777 has some saving graces freight wise although VA didnít help things by going for the smaller cargo door to save a few $$$
markis10 is offline  
Old Jun 11, 2020, 4:18 am
  #33  
 
Join Date: May 2006
Location: GA
Programs: VA-PLT, QF-GLD, DL-GM, UA-ex1K, AA-exPLT, HH-DM, IHG-PLT, MR-GLD
Posts: 8,246
Originally Posted by markis10
I note they have intended to run the A350 but I doubt it will be profitable, the aircraft is severely load limited on the route but that’s unlikely to be an issue post COVID 19 for awhile. The 777 has some saving graces freight wise although VA didn’t help things by going for the smaller cargo door to save a few $$$
Fair enough but it's quite different to say 'I think Delta may cancel the SYD route' vs. 'we won’t be seeing them back to Sydney'

Personally I expect them to continue this route, DL is the largest airline in the world by revenue and in better shape than most US airlines, abandoning a continent feels unlikely to me, especially if they have the aircraft to downscale. But just my opinion, we will see.

AA is a newcomer on this route and to me the most likely dropout (yes they are also one of the biggest airlines but not as financially solid as DL). UA has potenital to reduce their schedule, and QF is dropping the A380. That gives some room for DL even with reduced pax demand.

Last edited by CPMaverick; Jun 11, 2020 at 4:23 am
CPMaverick is offline  
Old Jun 12, 2020, 2:45 pm
  #34  
IHG Contributor BadgeMarriott Contributor Badge
 
Join Date: Apr 2006
Location: BNE
Programs: QF Gold, VA Gold, IHG Spire, Accor Plat, Marriot Plat, Hilton Diamond
Posts: 2,282
Originally Posted by CPMaverick
Fair enough but it's quite different to say 'I think Delta may cancel the SYD route' vs. 'we won’t be seeing them back to Sydney' .
When they announced the 777 retirement I didn’t think they would bother running the route with aircraft left in the fleet not really suitable.Time will tell, at the moment load limited ops is not really an issue.
markis10 is offline  
Old Jun 13, 2020, 8:08 am
  #35  
 
Join Date: Dec 2008
Location: SYD, Australia
Programs: VA Silver, QF FF, Priority Club
Posts: 925
Originally Posted by markis10
I note they have intended to run the A350 but I doubt it will be profitable, the aircraft is severely load limited on the route but thatís unlikely to be an issue post COVID 19 for awhile. The 777 has some saving graces freight wise although VA didnít help things by going for the smaller cargo door to save a few $$$
Where are you getting the information the A350-900 would be weight restricted on LAX-SYD? Doesnít seem right...
JClasstraveller is offline  
Old Jun 13, 2020, 8:35 pm
  #36  
 
Join Date: Feb 2004
Location: Perth, WA, Australia
Programs: QF Gold, VA Plat, IHG Plat Amb, LCAH Gold, Hilton Diamond
Posts: 3,849
Originally Posted by JClasstraveller
Where are you getting the information the A350-900 would be weight restricted on LAX-SYD? Doesnít seem right...
I think the original version of the A350-900 would have been, but there have been some improvements to the aircraft such that the more recent builds have higher MTOW and range.
Now, whether Delta has those newer ones, I don't know
perthite is offline  
Old Jun 14, 2020, 12:55 am
  #37  
IHG Contributor BadgeMarriott Contributor Badge
 
Join Date: Apr 2006
Location: BNE
Programs: QF Gold, VA Gold, IHG Spire, Accor Plat, Marriot Plat, Hilton Diamond
Posts: 2,282
Originally Posted by JClasstraveller
Where are you getting the information the A350-900 would be weight restricted on LAX-SYD? Doesn’t seem right...
Max payload range of the A350-900 is 10500kms, that’s 1500kms short without alternate requirements factored in, that’s based on Deltas MTOW of 280k
markis10 is offline  
Old Jun 14, 2020, 5:43 am
  #38  
 
Join Date: Dec 2008
Location: SYD, Australia
Programs: VA Silver, QF FF, Priority Club
Posts: 925
Originally Posted by markis10
Max payload range of the A350-900 is 10500kms, thatís 1500kms short without alternate requirements factored in, thatís based on Deltas MTOW of 280k
Given the A350-900's empty range and the loading charts I've seen, given LAX-SYD is about 6,500nm and take off from basically sea level, with reserves (call it 7,000nm range), payload is about 40 tons, maybe a ton or so more.

Using the standard 95kg/pax measure, DL's 306 pax configured A350-900 load would be 29 tons. Even being a little conservative on the 95kg figure and adding a little cargo, there's plenty to spare. Full pax plus a bit of cargo is easily do-able unless the winds are highly unfavourable.

DL would not be carrying max structural payload unless it was carrying dense cargo. Therefore I'm not sure saying that the 350 would be "severely load limited" is entirely correct.

Sure the B777-200LR is capable of more lift but with a fair bit higher trip cost.
JClasstraveller is offline  
Old Jun 25, 2020, 8:03 pm
  #39  
FlyerTalk Evangelist
 
Join Date: Apr 2001
Location: MEL CHC
Posts: 21,148
abc.net.au 26 June 2020 Virgin Australia bidder Cyrus Capital Partners withdraws, Bain signs purchase deal
Virgin Australia's administrators have entered into a sale agreement with Bain Capital, after its private equity rival Cyrus Capital Partners withdrew its offer this morning.Bain's private equity rival Cyrus Capital Partners withdrew its bid for Virgin Australia this morning, citing a lack of engagement from the airline's administrators.

Cyrus, along with Bain Capital, was one of two final bidders for Virgin, which went into administration in early April.

However, major bondholders, who stand to lose a large part of their $2 billion investment in Virgin as a result of its collapse, are preparing a last-minute buyout proposal to try and gazump the private equity bidders.

While they are not an official bidder, the group of bondholders wrote to Deloitte this week with an offer to inject $1 billion in cash.
<snip>
ExecTraveller 26 Jun2020 Bain wins: US investment giant takes control of Virgin Australia
Bain Capital is the new owner of Virgin Australia, following this morning's shock withdrawal of challenger Cyrus Capital.In a statement issued this morning, administrator Deloitte confirmed it has "now entered into a Sale and Implementation Deed with Bain Capital which will result in the sale and recapitalisation of the businesses of (the Virgin Australia Group)."

Deloitte notes that "no return to shareholders is anticipated. At this stage, it is not possible to determine the estimated return to creditors however an update will be provided ahead of the second meeting of creditors."

Bain Capital says it is committed to protecting as many Virgin Australia jobs as possible, will "invest in and see closer integration of Virgin Australia and the Velocity program", and also honour all all existing travel credits.

Staff who remain with the airline will be offered the chance to be part of an "employee ownership / profit sharing scheme," while those who are let go will see their entitlements fully funded.
<snip>
Bain's vision for Virgin Australia 2.0: so what's a 'hybrid' airline?
Mwenenzi is offline  
Old Jun 25, 2020, 9:02 pm
  #40  
 
Join Date: Dec 2014
Location: New Zealand
Programs: NZ Elite, QF Platinum (LTS), VA Platinum
Posts: 1,679
Yay for Virgin!! Happy Oz gets to keep a 2nd airline 🙌

Suspect thereís a round of layoffs coming though. No airline has escaped this measure 😕
Beano likes this.
NZbutterfly is offline  
Old Jul 5, 2020, 11:08 pm
  #41  
FlyerTalk Evangelist
 
Join Date: Apr 2001
Location: MEL CHC
Posts: 21,148
6 July 2020 abc.net.au ----> Virgin Australia's bond holders try to derail Bain Capital's takeover bid
Virgin Australia's takeover by a US private equity giant could be derailed as the airline's key bond holders lodge a case with the Australian Takeovers Panel, challenging the deal.
They will argue that the "circumstances regarding the process conducted by the administrators [Deloitte] are unacceptable and have the effect of precluding an alternative" deal being presented to Virgin's creditors at their next meeting in mid-August.

Key points:
  • Singapore-backed Broad Peak and Hong Kong-based Tor are challenging the Virgin Australia sale to Bain Capital
  • Both investment firms are owed money by Virgin Australia
  • They claim the sale process precludes an attempt to put an alternative offer to other Virgin creditors
<snip>
Mwenenzi is offline  
Old Aug 4, 2020, 6:06 pm
  #42  
IHG Contributor BadgeMarriott Contributor Badge
 
Join Date: Apr 2006
Location: BNE
Programs: QF Gold, VA Gold, IHG Spire, Accor Plat, Marriot Plat, Hilton Diamond
Posts: 2,282
Originally Posted by NZbutterfly
Yay for Virgin!! Happy Oz gets to keep a 2nd airline 🙌

Suspect thereís a round of layoffs coming though. No airline has escaped this measure 😕
Sadly 3000 or so, and going back to the Virgin Blue model with an all 737 fleet.

Virgin Australia will shed about 3000 jobs and cull its low-cost subsidiary Tigerair Australia as it rebrands as a ďvalue airlineĒ, it announced this morning.

The job cuts affect about one third of the Brisbane-based airlineís workforce, across cabin crew, ground crew, engineers, baggage handlers and some international head office staff.

The company will also suspend all long-haul international flights, and will transition to a single Boeing 737 fleet for domestic and short-haul international travel.

Virgin Australiaís lounges will remain closed for the foreseeable future, due to a lack of demand during the COVID-19 pandemic.

Travel credits will be honoured until June 2023.
https://www.news.com.au/travel/trave...b13e5a9f1995f1
markis10 is offline  
Old Aug 4, 2020, 6:23 pm
  #43  
FlyerTalk Evangelist
 
Join Date: Apr 2001
Location: MEL CHC
Posts: 21,148
Not unexpected. To me 6000 left out of 9000 is high. I expected more jobs to go.
The Covid-19 situation in Australia and the closing of state borders makes it harder. QLD has just announced the almost total closing of the QLD-NSW border

05 Aug 2020 va newsroom ----> Virgin Australia Group announces plan to focus on core strengths, re-establishing itself as an iconic Australian airline


Key points:
  • Plan for a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration
  • Focus on delivering exceptional experiences at great value with Virgin Australia’s core domestic and short-haul international business
  • Virgin Australia to provide customers with the value of travel credits post administration with validity dates extended for bookings made prior to administration
  • Resetting Virgin Australia to meet lower global and Australian demand, including:
  • Reduction in cost base to meet sector uncertainty and COVID-19 market conditions
  • Securing approximately 6,000 jobs when the market recovers with 3,000 roles impacted
  • Simplified all-Boeing 737 mainline fleet and the retention of the regional and charter fleet, but removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types.
  • Long-haul international flying important part of plan but suspended until global travel market recovers
  • Tigerair Australia brand discontinued with Air Operator Certificate (AOC) retained to provide option for ultra-low-cost operations when market recovers.
  • Continued commitment to regional and charter flying.
<snip>
5 Aug 2020 [abc.net.au] -----> Virgin Australia to slash 3,000 jobs for slimmed post-coronavirus operations
Virgin Australia has revealed plans to make about a third of its workforce redundant, with approximately 3,000 jobs expected to go under new owners Bain Capital, while 6,000 staff remain.

The private equity firm's plan for the airline sees the end of the Tiger Australia brand, although Virgin Australia said it would retain the air operator certificate so it could revive a low-cost carrier when the domestic holiday travel market fully recovered.

A key part of the plan is to operate an all Boeing 737 mainline fleet, with other aircraft types restricted to regional routes and charters.

This will mean removing ATRs, Boeing 777s, Airbus A330s and Tiger's Airbus A320s from the airline's fleet.

Virgin Australia chief executive Paul Scurrah said the airline had no choice but to shrink to survive amid the COVID-19 pandemic.
<snip>
And ExecTraveller [AU}-----> Bain's blueprint for Virgin Australia 2.0 revealed

<snip>
Virgin Australia entered voluntary administration on April 21, weighed down by debts of $6.8 billion and facing a travel market gutted by the coronavirus pandemic. The flight path out of administration will also be long and bumpy, expects Virgin Australia CEO Paul Scurrah, who will remain to steer Virgin into this new era.

<snip>

“We have worked closely with Virgin management since the binding agreement was signed to develop this strategy together for a stronger, more profitable and competitive Virgin Australia," noted Bain Capital's local managing director Mike Murphy. "We reaffirm that we are backing Paul to successfully lead Virgin through the current turbulence and into the future.

<snip>

No mention has been made of how many of those jets will be in the hangars. Virgin owns some 40 Boeing 737s, all of which will likely remain on deck, while Bain could supplement that by cherry-picking the best deals from among the current roster of leasing companies who hold the keys to another 40 Boeing 737s.
<snip>

Edit
https://www.executivetraveller.com/n...330-boeing-777
https://www.executivetraveller.com/n...prings-lounges

Last edited by Mwenenzi; Aug 5, 2020 at 1:41 am Reason: fixing URL link & added VA link
Mwenenzi is offline  
Old Aug 4, 2020, 7:46 pm
  #44  
 
Join Date: Oct 2007
Programs: DL PM; Marriott Plat; Hilton Honors Gold
Posts: 257
Other than cutting long haul and going all 737, I don’t see much business strategy change here. It’s hard to say those two things are much of a strategy change either, Long haul had always been rumored on the chopping block as it was never profitable.

Am I missing something?

I wonder if the NZ entity will stay stay alive doing trans Tasman.
rcurry01 is offline  
Old Aug 4, 2020, 7:54 pm
  #45  
FlyerTalk Evangelist
 
Join Date: Apr 2001
Location: MEL CHC
Posts: 21,148
Originally Posted by rcurry01
Other than cutting long haul and going all 737, I donít see much business strategy change here. Itís hard to say those two things are much of a strategy change either, Long haul had always been rumored on the chopping block as it was never profitable.

Am I missing something?

I wonder if the NZ entity will stay stay alive doing trans Tasman.
Missing nothing

My understanding is the VA NZ employees of the VA NZ entity were terminated early on
18 March 2020 [stuff.co.nz]---> https://www.stuff.co.nz/national/hea...alia-grounding
Mwenenzi is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.