Will Virgin go under/bankrupt/out of business?

I can't see how Virgin is going to survive this period without a significant bail-out, and I'm not sure they'll get one.

What do you think? Are they done for? Is it time to cash in your velocity points?

Poll Options

  • 27
    Yes - with a government bailout
  • 4
    Yes - no change
  • 14
    Yes - sold to another airline
  • 51
    No - not yet, maybe one day
  • 10
    No - they'll survive

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Comments

  • Needs a poll

    • +1

      good call - except not only does my last option not making any sense, it has a typo on it

      • Maybe report your post to the mods so they can help you modify your poll options

        • +1

          i'm not certain i've got a single one of my poll questions correct!

          haha. oh dear.

          sorry folks. the poll is meaningless!

          • @Niko123456: The world we currently live in. I’m not sure any of us are getting it right. :)

      • +4

        They’ll survice!

  • -1

    Silly thread the Australian Govt has already announced a $715 mil bailout . More is likely to come .

    • +3

      Misleading comment. Since this thread is about virgin and virgin only, you're comment implies $715m for virgin.

  • Remember when we had two Airlines, (TAA and Ansett).

    When you talk about Virgin Australia are you including in Tiger as well…

    Do we need both Qantas and Jetstar?

    What about the Regional Carriers like Rex or Alliance.

    Will the Western Sydney International Airport still be built or be deferred?

    • +1

      Alliance has the strongest position of all of them

    • +1

      Virgin owns Tiger and Qantas owns Jetstar.

  • +1

    Virgin's credit rating is already junk

  • -1

    I think it will survive, for now, because the Government would still like competition. Jetstar and Tiger might disappear, though. Certainly the era of cheap flights will be over for a while.

  • +1

    Obvious answer is for the government to buy them out and have a national airline - something that will keep qantas in line and national interests placed first.

    My question is which one of them will get to parliament's doors first, asking to be bought out.

    • +4

      Neither, there is nothing in it for the upper management if it is Nationalised. It will be the usual privatise the profits and socialise the losses.

  • No, they won't collapse. It's long been Govt policy to have more competition in Australia (it's one of the reasons why they continue to refuse to renationalise QANTAS). Come hell or high water, they will ensure the two main airlines will pull through. As for regional airlines, I suspect QANTAS will continue its predatory behaviour and many will disappear. Tigerair however, may disappear. No great loss there.

    • IMHO Virgin will (and should) keep Tigerair as their low cost subsidiary to compete against Jetstar on leisure and marginal routes and also to differentiate from their main brand

      • +1

        I think that Virgin might consider offloading Tiger back to SIA who could rebrand it as Scoot (just as with the rest of the network).

  • -1

    Virgin shares are up 12.5% in the past week so I don't think investors are worried.

    • +1

      They're at all time lows… And 12.5% on this share price is talking about fractions of cents.

      So I don't think there is a lot of confidence from investors..

      The other common theme is that we don't need a monopoly… But that won't happen for international as there are plenty of non-AU airlines keeping competition up.

      It seems to be just the domestic market that is an issue. Dunno if they'd just break Qantas in two or what..

  • -2

    Will probably be bought by Air New Zealand its been trying to get back into domestic market for a while

  • +4

    Yes, Virgin will definitely survive.
    When you think about it, the only competition is Qantas and that is no competition at all.
    With Qantas's dreadful service, appalling food offerings and very poor entertainment, there simply is no competition to consider.

    And that includes their horrible pink and orange uniform - yuk!

    We stopped using Qantas 8 years ago because of all the above-mentioned.

    When we returned to Australia after a 3 month European holiday, on a round-the-world FinnAir business-class ticket last August, we were disappointed that the last leg from Hong Kong to Brisbane was code-shared with Qantas. We then realised that they had not improved at all.

    If one of those airlines was to disappear, we know which one we'd prefer it to be.

    • On domestic travel QANTAS/Jetstar>Virgin/Tiger.
      Hands down every time.

    • What have you based your “yes they will survive on”

      Can’t survive warm and fuzzies

  • Merged from Virgin Australia in Trading Halt (Seeking $1.4b Government Loan)

    Virgin Australia has gone into a trading halt.

    Airline Virgin Australia has approached the government for a $1.4bn loan as part of a broader assistance package for the sector worth about $5bn.

    Time to Spend those Velocity Points… (maybe??)

    Minister for Industry Karen Andrews Said:
    Look, there are obviously a range of discussions with some pretty critical industries right across Australia and we’re going to be looking at what our sovereign capability is. Look, I don’t want to comment directly on Virgin or any discussions that may or may not be taking place. As I’ve said, our focus is very much on helping the Australians who have either lost their jobs or have reduced hours as a result of this pandemic that we’re experiencing.

    More info:
    Virgin Australia’s request for a $1.4bn loan from the government comes amid intense debate about how long it and other airlines can stay grounded before they run out of cash and follows heavy lobbying against a bailout for the airline from rival Qantas.

    The money would tide the airline over should the shutdown of the industry continue for many, many months.

    Despite the mass stand-downs of staff - 28,000 in Australia across Qantas and Virgin - airlines continue to spend money while their fleets are on the ground, on things like maintenance and aircraft leasing.

    According to industry sources, Virgin reckons it can last at least six months like this while Qantas estimates it has a year or more.

    Taking full advantage of his rival’s relative weakness, Qantas boss Alan Joyce has lobbied hard against any bailout for Virgin.

    He sledged it as “badly managed for 10 years” and said the government shouldn’t support a largely foreign-owned airline, as well as saying that the coronavirus crisis created a “survival of the fittest” situation in the industry.

    The attacks seem to have backfired because they prompted Virgin chief executive Paul Scurrah to complain to competition boss Rod Sims, who called on Qantas to cease the campaign and publicly stated that Australia was “going to need two airlines” when the crisis ends.

    • Neat

    • I wonder if the government is mothballing insolvency cases, too.

    • +6

      Taking full advantage of his rival’s relative weakness, Qantas boss Alan Joyce has lobbied hard against any bailout for Virgin.

      Alan Joyce LOL just watch him on TV interviews. You know after the first sentence he is nasty.

      • You don't get to be CEO of a company like that by being nice.

        • Joyce shutdown Qantas in 2011. (Has form).

    • Yep… So I did cash in my points.. just waiting for my items to ship. Worried Velocity isn't actually processing orders…

  • is it time to transfer to krisflyer?

  • The government is currently giving out billions to everyone. What's another $1.4?

    • +2

      This one would be to a 90% foreign owned company.

      • As much as it's good having competition, sending $1.26 billion to foreign companies can be much better spent to help Australia. I doubt it'll give foreign investors any negative impact for future investments (being a world wide event). I feel bad for the Mum and Dad investors, though.

  • I'm sorry but the Govt should not be giving money to any company in the form of bailouts whereby they are not taking an ownership stake.

    We still have half the workforce struggling to access Centrelink and JobKeeper payments. Millions of people. Versus what? 20-30k in two airlines? (I appreciate the flow on but you get the drift).

    • According to the press release, they have offered the government shares in return so they would be taking an ownership stake it seems

      • +2

        Virgin have (quite right) but Qantas now wanting 4 times the amount, for the sake of it, is not.
        Really have a problem with business leaders who see a pandemic as the appropriate time for predatory behaviours (such as telling Woolies not to hire Virgin staff etc)

        • Compare you and your neighbour as a hypothetical - your property worth ~ 4 times as much as theirs

          You have an extra $250k in your offset account - have lived frugally for years, small holidays, no extravagant purchases,

          Your neighbour pays the minimum, goes on holidays 3 times a year, bought a boat, lavish items, new cars every 2 years etc

          You both lose your jobs…. shouldn’t you be entitled to the same as your neighbour? Or you’re happy to have them bailed out and you fend for yourself Because you’re in a better fiscal position?

          • @scanuck: That isn't a comparison that can be made between the two airlines when Qantas has been spending on new aircraft, opening new routes, competing in non profitable regional areas to drive out under capacity smaller airlines, paying leadership hefty pay cheques, dudding workers for years and stuffing other aviation industry partners.

            Virgin might not be perfect but to claim Qantas got to their position by good ethical behaviours and therefore are more deserving is laughable.

            And to carry your idea further, average Australians who have done the right thing are missing out on JobSeeker and JobKeeper while those that didn't get Govt cheques. So the premise for this Govt at least carries.

            • @Willowtea: I think it is a comparison that can be made - I never mentioned ethics or either being deserving. I think they should both raise their own debt - not go to the government.

              But I respect your point of view

              I guess we will see what happens

  • +1

    I really want them to survive, they've always been my favourite Aussie airline. I have a trip booked with them at the end of the year and I'm hopeful they'll make it through.

    • Yes,me too.Great airline!

  • Rescue package on the cards for Qantas, Virgin
    https://www.afr.com/politics/federal/rescue-package-for-qant...

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