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TheBrownDog
Veteran 10k Posts 30k Posts TheBrownDog
May 10, 2009
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With Virgin Australia putting a pause on their trading on the ASX, how different will the airline industry be in Australia after this is over?

Tiger is already cactus as they’re owned by Virgin. All their staff have been made redundant.

I’ve mentioned in another thread that it will be interesting to see if Qantas are forced to sell off Jetstar, who then replaces the void left by Virgin dissolving. Virgin effectively replaced Ansett back in 2001 when the Government didn’t bail them out.

https://www.google.com.au/amp/amp.abc.net.au/article/12146572
 
While it's not something anyone anticipated and planned for, Virgin can suck it. Private company who benefited from existing Ansett infrastructure and are happy to make a profit when times are good.

Qantas while now private will be looked after by the govt. They have 2/3 of domestic routes and are the 'national carrier'.
 
Scotland said:
While it's not something anyone anticipated and planned for, Virgin can suck it. Private company who benefited from existing Ansett infrastructure and are happy to make a profit when times are good.

Qantas while now private will be looked after by the govt. They have 2/3 of domestic routes and are the 'national carrier'.
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Virgin do employ 16,000 people who are innocent parties in this.
 

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Scotland said:
While it's not something anyone anticipated and planned for, Virgin can suck it. Private company who benefited from existing Ansett infrastructure and are happy to make a profit when times are good.

Qantas while now private will be looked after by the govt. They have 2/3 of domestic routes and are the 'national carrier'.
Click to expand...
40% CCP owned Virgin should get no support. Qantas will expand a bit and take on some of the people currently employed by Virgin, Govt should refuse to renew any visas in the aviation so that the job losses fall as much as possible on non citizens and encourage the growth of Jetstar and regional airlines in Australia.

On SM-G570F using BigFooty.com mobile app
 
Industry analysts have said that they expect most airlines in the world to be bankrupt by the end of May. Many smaller carriers have already gone under, and I imagine that if you looked at everyone's books quite a few more would already be technically insolvent. The airlines that do survive, will do so because their governments prop them up.

It seems likely that most countries will pick winners, and in Australia's case that will certainly be Qantas. Rex will probably survive in a diminished capacity on its government-subsidised regional and remote routes.

Whatever the final outcome, you can probably bank on air travel becoming substantially more expensive in the future. Not only will there be less competition and increased costs for the immediate future, but high-margin business travel revenue will likely take a substantial hit as companies seek to make ongoing use of all this remote work infrastructure they are putting in place.
 
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Government helping Virgin is preferable to Qantas having a monopoly for god knows how many years, charging whatever they want.
 
The problem with bailouts is that governments rarely learn. When Saab went under as part of GM during the GFC they went cap in hand to the (pretty socialist) Swedish government who told them to go away (herdy gerdy gerdy). We on the other hand just handed GM Holden money for decades until the parent company decided to pull the pin.

Govt assistance needs to be conditional. ScoMo and friends will probably end up giving Virgin a bag full of cash to keep them in business (because jerbs) and then come this next time year it will still cost me the same price to fly to Kalgoorlie as it does to fly to Tokyo.
 
Caesar said:
Industry analysts have said that they expect most airlines in the world to be bankrupt by the end of May. Many smaller carriers have already gone under, and I imagine that if you looked at everyone's books quite a few more would already be technically insolvent. The airlines that do survive, will do so because their governments prop them up.

It seems likely that most countries will pick winners, and in Australia's case that will certainly be Qantas. Rex will probably survive in a diminished capacity on its government-subsidised regional and remote routes.

Whatever the final outcome, you can probably bank on air travel becoming substantially more expensive in the future. Not only will there be less competition and increased costs for the immediate future, but high-margin business travel revenue will likely take a substantial hit as companies seek to make ongoing use of all this remote work infrastructure they are putting in place.
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The mining charters will also survive (Alliance and Cobham the major two).
 
When your ceo has a salary of 24mil and shareholders still received their dividends then they shouldn’t receive a bail out - needs to go back to being govt owned

as for virgin they should look to their owners to bail them out
 

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BACCS said:
With Virgin Australia putting a pause on their trading on the ASX, how different will the airline industry be in Australia after this is over?

Tiger is already cactus as they’re owned by Virgin. All their staff have been made redundant.

I’ve mentioned in another thread that it will be interesting to see if Qantas are forced to sell off Jetstar, who then replaces the void left by Virgin dissolving. Virgin effectively replaced Ansett back in 2001 when the Government didn’t bail them out.

https://www.google.com.au/amp/amp.abc.net.au/article/12146572
Click to expand...

at worst they'll be the best cash box

they can clearly demonstrate property right damage, so the government will pay out.

The question will be how much......and Virgin will be reasonable otherwise it becomes drawn out.
 
Watch domestic fares skyrocket if Virgin fall over. Qantas will be rescued by government - ideally a share of it should come back into public ownership, rather than being a handout.

Overseas, don't see how many of the budget European carriers survive? Their margins are usually fairly tight as it is, and their market has just vanished.

The major American carriers will all be propped up by government if needed, but should fare better anyway given how they're distributed and more resilient demand.



Silver lining is that this saves a whole lot of carbon emissions.
 
No problem with the govt helping out, provided its through buying equity to be sold off later.
Qantas have a huge advantage in that they carry the vast bulk of government flights. Virgin get a share of business traffic, but that's cut down, but Virgin, DeathStar and Tiger all rely mostly on practically non-existent liesure travel to fill seats.
Rex and the small guys like Sharp and Pelican are screwed.

Whenever things return the "full service" airlines economy offerings are probably all going to become RyanAir light with cost-cutting. Possibly not so much on long haul international, as some Asian airlines will likely still be competing on low-costs with high-quality service. (Singapore, Thai, etc)
God help anyone getting through LAX with a runny nose and dark skin.
 
Spirit Level said:
I currently have travel credit from virgin due to cancelled flight so it would be nice if they didnt go under.

The one time I don't book with Qantas :mad:
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I'm a platinum member with 4 flights in credit.

Looks like I'll have to start at the bottom and work my way up again. Sucks. Virgin have that shiny, newish terminal and lounge in Perth too
 
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Aviation is very expensive and operates on a show string margin. Great for travellers but hard to turn profit.
Aside from virgin what has had the greatest effect has been overseas carriers operating in multiple countries. This has meant virgin and Qantas needed cheaper domestic routes to compete.
As is not uncommon in Australia this will depend on what happens internationally. Airlines go kaput Qantas and virgin will own the show and air travel is for the rich only.
If the government ever thought long term this would be a chance to buy equity in Qantas and expand it to the markets killed by this. Would be like the mining boom of the sky. Instead they've unnecessarily locked the economy out of proportion to our individual threat and pissed money against the wall keeping people in no longer viable industries
 
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