Virgin Airlines ? any ideas ?

[rogespeed]

Keeping in mind:

Virgin Airlines is basically worthless as per the market price of the holding company that owns it:  Virgin Australia Holdings LTD

 share price is less than 1 cent ,

compared with Qantas being valued 355x more at $3.55 per share 

What about dividends ? none paid , appears never has. 

Also a major share holder HNA Group (19.82%)  is being nationalised by "CHINA INC" who have the expressed  objective of selling all airline assets which would include Virgin Australia Holdings 

Somewhat shakey some might say.

so what about worthiness of support , the history ?

Questions of interest .. how did a new airline establish itself after a pioneering Australian airline company on home ground  ( Ansett Airways/ Ansett Australia) fail dismally ? 

A solution that will placate everyone and result in financially viable trading for all airlines based here is in everyones interest.

 https://en.wikipedia.org/wiki/Virgin_Australia

https://en.wikipedia.org/wiki/Virgin_Australia_Holdings

https://www.bing.com/search?q=Virgin+Australia+holdings+LTD&FORM=ANCMS9&PC=U531

https://www.bing.com/search?q=qantas+shares&FORM=AWRE

https://www.bloomberg.com/news/articles/2020-02-19/china-said-to-near-takeover-of-hna-group-as-virus...

[rogespeed]

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@eol-products wrote:

Unfortunatley you are incorrect Virgin Blue was very profitable.I beleive they may have made more money some years than Qantas.This is from an old news article.

"It is worth noting that on a much smaller equity base Virgin Blue, as it was then, had pre-tax earnings of $309 million in 2007-08, ahead of the financial crisis. Even including the $226 million loss incurred during the GFC, under Brett Godfrey Virgin it generated more than $1 billion of earnings."

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🙂 

[rogespeed]

Well the Federal Government has a great idea , has requested Virgin Australia Airlines to reopen some services ,  could there be seen now a light at the end of the tunnel of turmoil ?

https://www.msn.com/en-au/news/australia/virgin-australia-to-resume-flying-minimal-domestic-schedule...

[rogespeed]

Appears will now be under new management for a awhile due to unsustainable debts

https://www.smh.com.au/business/companies/virgin-australia-set-for-voluntary-administration-20200420...

The Govt would not bale them out , and at this time the major owners have not - a tough operating environment at the moment for obvious reasons

however one thing in favour is the crude oil has dropped in price - as low as US11 per barrel down from US$60 recently 

So this will help in reducing operating costs for airlines 

https://markets.businessinsider.com/commodities/oil-price?type=wti

[icyfroth]

I'll miss Virgin airlines, I always use them to travel to Mackay to visit my daughter.

That will probably be much harder and pricier once the virus danger has passed.

Things won't go back to the way they were, ever.

[rogespeed]

One solution that may encourage resolution if for the Australian Govt to create a paper airline ( ie Banana republic Airlines ) with route licenses for all Vigin Australia routes and contract out the air service to Virgin Australia Holdings who commission Virgin Australia Airlines to deliver the contracted air passenger services

This would enable Vigin Australia Holding to charge the Govt Airline viable rates and so make viable the airline with extra to improve effeciency , while at the same time charging competitive or better ticket prices

so

The Govt supports the company as per business conventions , which keeps the much of the current employees in active employment , without the tax payer looking like mugs by just throwing money at them 

The Govt can keep in sight the clear money trail by running the rescue operation as a business 

Virgin Australia can get extra funding without looking like a basket case 

Virgin Australia can now improve efficiencies by way of normal business operations ( Operating like a contractor )

Govt get credit for saving thousands of jobs , Virgin Australia Holding shares increase in value

In time Virgin Australia/Holdings become independantly viable and so buy out the Govt Banana Republic Airlines for $1 and so operate in their own right 

A business issue is best resolved by using business conventions 

[chameleon54]

And the government ( taxpayer ) gets what from all of this money it pours in, ?  ( other than subsidising the ticket price for people having holidays in Bali )

Just buy the airline out for a dollar, prop it up for a few years until things improve and then sell it off for a profit to the taxpayer.

[eol-products]

Give it a few weeks to see who will take it over. Be funny if an Australian equity frim does and it becomes more Australian owned than Qantas.

[rogespeed]

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@chameleon54 wrote:

And the government ( taxpayer ) gets what from all of this money it pours in, ?  ( other than subsidising the ticket price for people having holidays in Bali )

Just buy the airline out for a dollar, prop it up for a few years until things improve and then sell it off for a profit to the taxpayer.

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That would incur the loss and wrath of the share holders - 4 of which are major players in the world of commerce, including presence in Australia ( one of which purchases a lot of wool)  - better to have a happy outcome for as many people and commercial interests as possible 

Banana Republic Airlines ( that operate no aircraft , a sort of 100% Govt owned virtual holding operating company) contracting out required services exclusively to Virgin Australia Holdings offers the possibility of deliverance without the complications and cost ( indirectly to the tax payer from tax write offs ) of bringing a new airline company into the arena from startup  

[rogespeed]

well the CEO is leading the charge from the front " we will be back leaner and meaner "

 https://www.msn.com/en-au/news/australia/virgin-australia-will-be-back-leaner-and-meaner-ceo/ar-BB12...

Obviously high morale with a clear objective to survive 

[davewil1964]

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@rogespeed wrote:

well the CEO is leading the charge from the front " we will be back leaner and meaner "

 https://www.msn.com/en-au/news/australia/virgin-australia-will-be-back-leaner-and-meaner-ceo/ar-BB12...

Obviously high morale with a clear objective to survive 

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His workers don't seem to have the same level of morale. Maybe because they won't be getting paid, whereas he will undoubtedly have salted enough away to maintain his lifestyle.