Virgin Trading Halt

Discussion in 'Markets & Economies' started by 66rounds, Apr 14, 2020.

  1. 66rounds

    66rounds Well-Known Member Silver Stacker

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  2. barneyrubble

    barneyrubble Well-Known Member Silver Stacker

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    It could be worse than a bailout.
     
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  3. STKR

    STKR Well-Known Member Silver Stacker

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    An nice, round $1B sounds good to me.
     
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  4. STKR

    STKR Well-Known Member Silver Stacker

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    Screenshot_2020-04-14-10-45-26-55.png
     
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  5. 66rounds

    66rounds Well-Known Member Silver Stacker

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    So I've got you down for 0 monopoly dollars.
     
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  6. STKR

    STKR Well-Known Member Silver Stacker

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    I'll make a friendly bet with you Mr 66rounds.

    1 round 50cent for whoever's closest.

    I'll change my guess to 1.1B
    If 1's are legs----------------- ^ this is Virgin SCAT
     
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  7. 66rounds

    66rounds Well-Known Member Silver Stacker

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    I haven't made a wager, I'm honestly curious if they will get bailed out. I expect they will and then promptly go broke in another six months with a fat bonus for all upper management
     
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  8. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    It will be a large bailout as both Virgin and Qantas are the air carriers for our tourist industry. It's something like 10% of GDP so the government needs our two airlines.
     
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  9. STKR

    STKR Well-Known Member Silver Stacker

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    I was suggesting we make one.

    I think you're onto it. It's almost transparent. Bail-out a few on the backs of the many.

    Wash, rinse, repeat. Fleece.
     
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  10. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    I predict Zippo dollars bail-out for Virgin Australia.

    Only 10% of Virgin Australia is ASX listed. The rest is Singapore Airlines, Etihad Airways (both Govt owned through sov wealth funds) Nanshan Group, HNA Group (two opaque PRC entities) and Richard Branson with 10% thus no real local political pressure (corporate or retail) to save Virgin Australia. If I was the Australian Govt, I tell Virgin to go to their shareholders for a capital injection. If they say no, then that says a lot about how their view Virgin Australia, thus why should the Australian taxpayer foot the bill re Virgin Australia.

    Australia survived with one domestic carrier with Air New Zealand pulled the plug on Ansett in 2001 and if they give Virgin (the smaller of the two Australian based carriers) a bail-out, Qantas will also demand same and it would most likely cost more. The Australian govt didn't prop up Ansett or Compass Airlines (Mk1 and Mk2), so why throw money at Virgin Australia when domestic travel is next to zero for the near future and when we can start flying again (normally), it'll take time for airlines and passenger numbers and to ramp back up, thus one carrier would recover faster than two.

    I'm not suggesting that a monopoly is correct in the long term, far from it but given current govt imposed circumstances, it might be the best crappy option to let Virgin stand or fall via it's own means.

    If Virgin fail, someone (maybe a Singapore Airlines or more likely Air New Zealand) could step in and grab a bargain re planes, gates etc.
     
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  11. STKR

    STKR Well-Known Member Silver Stacker

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    Remember...it's a bailout LOAN heh heh
    Profits before people, right?

    But seriously, I think you've made a good assessment. I would think, however, that nothing is off the table and the current government will go to great lengths to keep the corporation's alive. If it creates profit from the bailout loan and adds additional (voters) tax payers from jobs, it may be a sensible move for the guddament to make.
     
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  12. sammysilver

    sammysilver Well-Known Member Silver Stacker

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    Air NZ makes sense as second carrier. It keeps the dollars between the two interconnected economies.
     
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  13. dozerz

    dozerz Well-Known Member Silver Stacker

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    amazing how both airlines have paid virtually no tax but will take the public tax lolbux to keep them flying.
     
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  14. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    Closing down is more the likely news
     
  15. NaturesProphet

    NaturesProphet Member

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    I think it all comes back to what Oddjob said. Put it on the shareholders. Sure - we can bail them out and make interest on the loan but what happens when that loan goes bad? A bailout wont make people fly more so what do you think Virgin will be doing 6 months down the track when the money is gone?
     
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  16. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    There is no bailout talks. If there was Qantas and Rex would also be in a trading halt.

    VAH is likely telling the banks that they are in breach of their loan covenant.
     
    Last edited: Apr 14, 2020
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  17. bubblebobble2

    bubblebobble2 Well-Known Member Silver Stacker

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    That's ScoMo! Big corporations get 1B+ as to residents and older people just get a 'one-off' mere $750AUD which probably last for a couple of weeks of grocery runs..
     
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  18. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    Add to that the corporates who Virgin (and other airlines) lease their planes from. Not all airline planes are owned by the airline.

    Unless their is a forced majeure clause in the plane lease agreements, I suspect the Lessor is still demanding their lease payments.
     
  19. Davros10

    Davros10 Well-Known Member Silver Stacker

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    How are Singapore Airlines or Air New Zealand going to survive long enough to take advantage?
     
  20. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    NZ airline no chance they couldn’t borrow $1 without government backing, so they are out

    Singapore is 51% owned by Singapore government (since forever) and is a very very well run airline. Two weeks ago SIA raised $S19 Billion with full government backing
    Etihad is backed by the Oil Prince and loses money like there is no tomorrow but Oil Prince backs them every year.

    Singapore already owns 20% of Virgin and Etihad owns 20% so it doesn’t take much of an imagination to realise it benefits them both for VAH goes through liquidation, get rid of tiger air altogether, let the aircraft leasing companies take back all (yes all) the leased planes and wipe out the debt.

    Than after the pandemic, Singapore, Etihad or in fact anyone else could buy the rights of Virgin name, infrastructure and slots with Australian government subsidy on offer.


    Two obvious strategic value of New plane-less VAH to Singapore or Etihad would be

    1. A dedicated feeder domestic carrier.

    2. Singapore owns 70% and Etihad owns 60% of their planes, so they both will have plenty of spare planes to redeploy to New VAH without it sitting idle for the air market to get back to normal in two to three years time.

    3. Don’t have to deal with 20,000 employees for a year or two, better to start new

    Doubtful either would create a joint venture together as that would mean sharing the feeder traffic

    edit: Scomo asked President Lee if SIA was willing to back Virgin... Lee said SIA had bigger issues

    VAH is 90% foreign owned and bailing VAH out would be untenable with Australian tax payer money, when VAH has not paid tax in the last 6 year losing $1 billion over the time and $370 million in 2019 before the pandemic.

    In AFR it is rumoured Paul Scurrah VAH CEO have threatened Morrison government it will enter voluntary administration putting VAH into voluntary administration and 20,000 losing their jobs.... To which the minister replied aren’t all but managers on JobKeeper already?
     
    Last edited: Apr 14, 2020
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