Virgin Aust. insolvent and set to go bust

[Aractus]

And I couldn't be happier.

Virgin Australia is set to go into voluntary administration this week. I would have been livid if our government had bailed out a foreign owned company: you may as well throw the money away. Less than 9% of Virgin is locally owned - meaning the foreign investors that own it are the ones that should be fronting up the cash to keep it afloat, if that's what they want.

Virgin's ownership is thus:

Etihad Airways (UAE government owned - 20.94%)
Singapore Airlines (Singaporean government owned - 20.09%)
Nanshan Group (China - 19.98%)
HNA Group (China - 19.82%)
Virgin Group (UK - 10.42%)
ASX (8.75%)

So aside from the relatively few Australian shares in the ownership, Virgin is almost 40% owned by Chinese businessmen and possibly the Communist China government (they control all mainland businesses in any case), a further 41% owned by foreign governments, and 10% owned by the Richard Branson's Virgin Group. If the foreign investors no longer want to invest in their company: GOOD, let them fail. It's no skin off our nose. Yes it might take 3-5 years for an effective competitor to rise up against Qantas, but at least they'll presumably be run as a sustainable business, whereas Virgin was not run that way.

This is not a time to be propping up foreign investors who don't want to front up their own money for their businesses. In fact it's never a time to do that!

Of course this means lots of people will be loosing their jobs, but guess what: those jobs don't exist right now anyway. Just because they're supposedly being paid on a crooked government scheme called "Jobkeeper". Yes crooked, I already know of one person who had their dole application rejected by Centrelink because the ATO is paying "Jobkeeper" to their criminal employer who's keeping the cash for himself.

So I say good riddance Virgin. Eat shit. What do you expect if you run your company in an unsustainable way in the hopes of a government handout should a crisis affect operations? Qantas isn't asking for a handout, they're stable and their business model sustainable. Crash and burn, goodbye, we don't need you!

[Aractus]

So Virgin Australia has gone into voluntary administration today.

I explained above why it was a fool's endeavour to bail out a foreign-owned corporation. I touched on the fact that Virgin was not structured in a sustainable way, and now I think I should explain why this is the case.

This all has to do with the fact that Virgin is foreign-owned, and it operates at a loss. Who on earth thinks that's a good business structure? Well its foreign owners do of course. Which is, broadly speaking, a conglomerate of 5 different foreign airliners (or as is the cases with the Chinese companies, conglomerates with significant interests in the Chinese airline industry). They see Virgin as essential to their international interests, it's all about servicing their own foreign visitors more than it is in being a truly Australian airline set up for the Australian market. They see the profits in flying people into and out of Australia - and if that means losing money flying them around domestically, then so be it. That business model only ever made sense in the context of it being a foreign-owned entity servicing the needs of their foreign shareholders. If it were Australian owned then its shareholders would want to see a profit *here* not the airline used to create a profit outside of Australia.

I am thrilled that Virgin is getting a haircut. It means it will be restructured back into how it was when it first launched in Australia: a budget no-frills airline. Yes that will give QANTAS a temporary monopoly on the full-service major airport domestic market - but do keep in mind that's just *one* part of the airline industry, and it will only last 3-5 years. That's the same position they were in when Ansett went bust - and the fact of the matter is Ansett going bust was the best thing to happen to Australian aviation in decades. That's a fact that can't be denied.

Keeping QANTAS Australian-owned is what prevented the Ansett/Virgin collapse from happening to them as well. If they were foreign owned their shareholders might take the same view as Virgin's ones have.

Richard Branson has released a video effectively criticising the Australian government for not backing out his airline, and outright lying about Virgin's place in our skies:

"20 years ago we wanted to bring much needed competition to Australia's skies." NOPE. They sized upon an opportunity when Ansett was weak and pushed them out of business. Then they didn't even take Ansett's competitive place, no they just ran as a cut-cost budget airliner. Don't get me wrong, Ansett was in deep need of restructuring and reform if it was to survive, but Virgin didn't take its place as a direct competitor to Qantas at all until several years later.

Also as I mentioned above the fact is undeniably that Ansett's collapse directly generated positive change in Australian aviation. And they begged for a government bail-out as well. That completely disproves the hypothesis put forward by Branson and others that letting our second largest domestic airliner collapse will erode competition and be bad for the industry: it will not! Virgin going into voluntary administration is exactly what the market needs.

"In most countries federal governments have stepped in for this unprecedented crisis in aviation to help their airlines, sadly that has not happened in Australia." That's because the federal governments he's referring to own a stake, and usually a majority stake, in "their" airlines. That's a shareholder investing in their company - that's normal! Virgin is a foreign-owned private corporation that is designed to operate in Australia at a loss because it's good for the businesses of the five major shareholders, which includes Virgin UK. What government would be idiotic enough to bail-out a foreign-owned corporation that runs domestically at a loss?!

Notice that he, and indeed the Virgin Australia CEO Paul Scurrah speaking on 7.30, cannot point to an Australian example to back-up their claim that Virgin should get a government bail-out? They have to point to overseas examples. That's because they know that letting Ansett collapse was overwhelming GOOD and POSITIVE for aviation in Australia, and especially for Virgin Blue. In fact letting Ansett collapse despite their desperate pleas for a government bail out may have even been the single best thing to happen in all of aviation history in Australia.

Furthermore this is not an "unprecedented crisis in aviation" as Branson claims. Ansett survived World War II, including shutting down all domestic flights for the duration of the war and sending their planes overseas to help in the war effort. They faced difficulties re-entering the market, but they were ultimately fine. So Ansett survived the whole of WWII without their planes even flying in Australia, but Virgin Australia can't survive a couple of months of a pandemic? And then the founder claims it's an "unprecedented time for aviation"?!

[Cavebear]

So Virgin Australia has gone into voluntary administration today.

I explained above why it was a fool's endeavour to bail out a foreign-owned corporation. I touched on the fact that Virgin was not structured in a sustainable way, and now I think I should explain why this is the case.

This all has to do with the fact that Virgin is foreign-owned, and it operates at a loss. Who on earth thinks that's a good business structure? Well its foreign owners do of course. Which is, broadly speaking, a conglomerate of 5 different foreign airliners (or as is the cases with the Chinese companies, conglomerates with significant interests in the Chinese airline industry). They see Virgin as essential to their international interests, it's all about servicing their own foreign visitors more than it is in being a truly Australian airline set up for the Australian market. They see the profits in flying people into and out of Australia - and if that means losing money flying them around domestically, then so be it. That business model only ever made sense in the context of it being a foreign-owned entity servicing the needs of their foreign shareholders. If it were Australian owned then its shareholders would want to see a profit *here* not the airline used to create a profit outside of Australia.

I am thrilled that Virgin is getting a haircut. It means it will be restructured back into how it was when it first launched in Australia: a budget no-frills airline. Yes that will give QANTAS a temporary monopoly on the full-service major airport domestic market - but do keep in mind that's just *one* part of the airline industry, and it will only last 3-5 years. That's the same position they were in when Ansett went bust - and the fact of the matter is Ansett going bust was the best thing to happen to Australian aviation in decades. That's a fact that can't be denied.

Keeping QANTAS Australian-owned is what prevented the Ansett/Virgin collapse from happening to them as well. If they were foreign owned their shareholders might take the same view as Virgin's ones have.

Richard Branson has released a video effectively criticising the Australian government for not backing out his airline, and outright lying about Virgin's place in our skies:

"20 years ago we wanted to bring much needed competition to Australia's skies." NOPE. They sized upon an opportunity when Ansett was weak and pushed them out of business. Then they didn't even take Ansett's competitive place, no they just ran as a cut-cost budget airliner. Don't get me wrong, Ansett was in deep need of restructuring and reform if it was to survive, but Virgin didn't take its place as a direct competitor to Qantas at all until several years later.

Also as I mentioned above the fact is undeniably that Ansett's collapse directly generated positive change in Australian aviation. And they begged for a government bail-out as well. That completely disproves the hypothesis put forward by Branson and others that letting our second largest domestic airliner collapse will erode competition and be bad for the industry: it will not! Virgin going into voluntary administration is exactly what the market needs.

"In most countries federal governments have stepped in for this unprecedented crisis in aviation to help their airlines, sadly that has not happened in Australia." That's because the federal governments he's referring to own a stake, and usually a majority stake, in "their" airlines. That's a shareholder investing in their company - that's normal! Virgin is a foreign-owned private corporation that is designed to operate in Australia at a loss because it's good for the businesses of the five major shareholders, which includes Virgin UK. What government would be idiotic enough to bail-out a foreign-owned corporation that runs domestically at a loss?!

Notice that he, and indeed the Virgin Australia CEO Paul Scurrah speaking on 7.30, cannot point to an Australian example to back-up their claim that Virgin should get a government bail-out? They have to point to overseas examples. That's because they know that letting Ansett collapse was overwhelming GOOD and POSITIVE for aviation in Australia, and especially for Virgin Blue. In fact letting Ansett collapse despite their desperate pleas for a government bail out may have even been the single best thing to happen in all of aviation history in Australia.

Furthermore this is not an "unprecedented crisis in aviation" as Branson claims. Ansett survived World War II, including shutting down all domestic flights for the duration of the war and sending their planes overseas to help in the war effort. They faced difficulties re-entering the market, but they were ultimately fine. So Ansett survived the whole of WWII without their planes even flying in Australia, but Virgin Australia can't survive a couple of months of a pandemic? And then the founder claims it's an "unprecedented time for aviation"?!

Pure capitalists are always looking to the short term. This is surprising?

Any forward-thinking company would have investment or cash reserves. They will survive.

[Aractus]

Pure capitalists are always looking to the short term.  This is surprising?

Any forward-thinking company would have investment or cash reserves.  They will survive.

Virgin focused on building capital. But that's besides the point, the point is that them going into voluntary administration followed either by a substantial restructuring or liquidation is the correct market response. It's what the market needs. Virgin has been unsustainable as an independent domestic airliner since it started in Australia 20 years ago. Covid didn't put them into this position, it just nudged them into insolvency. Well good riddance, that's what I say, and I think we need to seriously look at keeping all domestic airliners locally owned - we've seen what happens with foreign ownership in aviation and it doesn't end well.

[Cavebear]

Pure capitalists are always looking to the short term.  This is surprising?

Any forward-thinking company would have investment or cash reserves.  They will survive.

Virgin focused on building capital. But that's besides the point, the point is that them going into voluntary administration followed either by a substantial restructuring or liquidation is the correct market response. It's what the market needs. Virgin has been unsustainable as an independent domestic airliner since it started in Australia 20 years ago. Covid didn't put them into this position, it just nudged them into insolvency. Well good riddance, that's what I say, and I think we need to seriously look at keeping all domestic airliners locally owned - we've seen what happens with foreign ownership in aviation and it doesn't end well.

Ah "the correct market response" was what I was expecting. "the correct market response" is always quarterly for the benefit of the management and some shareholders and no one else.

What you are complaining about is that they desired the quarterly benefits in the profitable times, but demand public assistance in the bad ones. They think they are a for-profit yet somehow a public utility.

Guess what? They aren't. They are a business dedicated to profit at all means. And when you live by profit, you can die from the lack of it. Ask the Dutch Tulip traders and the whale-oil lamp companies.

There will be airline companies in the future. Some will be older ones that stashed cash or invested broadly. Some will be new ones that buy up the surplus airplanes and start new companies. I don't give a rat's ass about one or another. The next ones will hire the currently unemployed but experienced workers.

It is companies (and some posters) who demand profits in the good times and taxpayer subsidies in the bad that I have no use for.

[Phaedrus]

You foreigners and your political dramas confuse me.

[Cavebear]

You foreigners and your political dramas confuse me.

Tell me what confuses you and I will try to explain...

[Phaedrus]

Tell me what confuses you and I will try to explain...

All of it.

With 'Murican politics, it's easy. Obama good, Trump bad. Democrats good, Republicans bad. Liberals good, conservatives bad. Capitalism is bad, socialism is good.

[Cavebear]

Tell me what confuses you and I will try to explain...

All of it.  

With 'Murican politics, it's easy. Obama good, Trump bad. Democrats good, Republicans bad. Liberals good, conservatives bad. Capitalism is bad, socialism is good.

OK, and thanks.

Obama good because he paid attention to facts and accepted them. Organized people to deal with problems. Trump bad because he won't accept facts, and deals with people like a school yard bully.

Democrats are not necessarily good nor Republicans bad, but Republicans have become more concerned with holding power for Big Businesses and Democrats have stayed about the same for supporting the Middle Class. No democracy survives without a functional Middle Class.

In the US, there have been cycles where pure capitalists have been in control and some times where Worker Unions dominated. Neither are perfect. But pure capitalists are in control now and the balance has to be restored. Republicans are dead-set against that.

I think the solution is a form of social-capitalism. We are probably getting there gradually, but not without the Republican party adjusting to it.

Does that help?

[Aractus]

It is companies (and some posters) who demand profits in the good times and taxpayer subsidies in the bad that I have no use for.

Right we're on the same page there, I agree 100% but:

What you are complaining about is that they desired the quarterly benefits in the profitable times, but demand public assistance in the bad ones. They think they are a for-profit yet somehow a public utility.

VA was never profitable and I'm not complaining. If I'm complaining about anyone it's VA and ALP for trying to get a bailout, but the government has done the right thing and said "fuck you, asshole".

I wouldn't exactly say that VA was "for profit" because the alleged profits were to the parent company's operations not their own at all - in some respects it'd be more accurate to say they were a NPO funded by international airliners. Like I said it was a fucking stupid business model, and no government should reward business stupidity.

As for competition we'll be fine - we've traditionally had two major airliners but all the companies have changes over the past 70+ years of aviation.

[Phaedrus]

Tell me what confuses you and I will try to explain...

All of it.  

With 'Murican politics, it's easy. Obama good, Trump bad. Democrats good, Republicans bad. Liberals good, conservatives bad. Capitalism is bad, socialism is good.

OK, and thanks.

Obama good because he paid attention to facts and accepted them.  Organized people to deal with problems.  Trump bad because he won't accept facts, and deals with people like a school yard bully.  

Democrats are not necessarily good nor Republicans bad, but Republicans have become more concerned with holding power for Big Businesses and Democrats have stayed about the same for supporting the Middle Class.  No democracy survives without a functional Middle Class.

In the US, there have been cycles where pure capitalists have been in control and some times where Worker Unions dominated.  Neither are perfect.  But pure capitalists are in control now and the balance has to be restored.  Republicans are dead-set against that.

I think the solution is a form of social-capitalism.  We are probably getting there gradually, but not without the Republican party adjusting to it.

Does that help?

No, I'm American. I understand American politics. Isn't Aractus Austrialian and under UK politics? That's what's confusing me. UK politics makes no sense to me.

[Aractus]

No, I'm American. I understand American politics. Isn't Aractus Austrialian and under UK politics? That's what's confusing me. UK politics makes no sense to me.

"Under UK politics"?!

It's simple. What should a government do if a company is insolvent? If your answer is "C. don't let them go bust give them a bailout" you essentially support socialism. Socialism is a one-way street to corruption. You end up rewarding companies for poor management (at the best of times) and criminal corruption (at the other extreme). In the case of Virgin it was poor management governed by their shareholders that wanted them to operate the way they did. End of story.

[Phaedrus]

"Under UK politics"?!

It's simple. What should a government do if a company is insolvent? If your answer is "C. don't let them go bust give them a bailout" you essentially support socialism. Socialism is a one-way street to corruption. You end up rewarding companies for poor management (at the best of times) and criminal corruption (at the other extreme). In the case of Virgin it was poor management governed by their shareholders that wanted them to operate the way they did. End of story.

So you're the equivalent of an American conservative?

If so, that makes you bad.

[Cavebear]

All of it.  

With 'Murican politics, it's easy. Obama good, Trump bad. Democrats good, Republicans bad. Liberals good, conservatives bad. Capitalism is bad, socialism is good.

OK, and thanks.

Obama good because he paid attention to facts and accepted them.  Organized people to deal with problems.  Trump bad because he won't accept facts, and deals with people like a school yard bully.  

Democrats are not necessarily good nor Republicans bad, but Republicans have become more concerned with holding power for Big Businesses and Democrats have stayed about the same for supporting the Middle Class.  No democracy survives without a functional Middle Class.

In the US, there have been cycles where pure capitalists have been in control and some times where Worker Unions dominated.  Neither are perfect.  But pure capitalists are in control now and the balance has to be restored.  Republicans are dead-set against that.

I think the solution is a form of social-capitalism.  We are probably getting there gradually, but not without the Republican party adjusting to it.

Does that help?

No, I'm American. I understand American politics. Isn't Aractus Austrialian and under UK politics? That's what's confusing me. UK politics makes no sense to me.

Oh, well you did seem to post as if you were not American. My error. British politics sometimes confuse me too. But Australian politics are not British politics either.

[Unsapien]

"Under UK politics"?!

It's simple. What should a government do if a company is insolvent? If your answer is "C. don't let them go bust give them a bailout" you essentially support socialism. Socialism is a one-way street to corruption. You end up rewarding companies for poor management (at the best of times) and criminal corruption (at the other extreme). In the case of Virgin it was poor management governed by their shareholders that wanted them to operate the way they did. End of story.

So you're the equivalent of an American conservative?

If so, that makes you bad.

There is no equivalent to American Conservatism, they're in a league all on their own.

Most of the rest of the world's conservative parties would be considered Left of even the Democrats, any group close to American Conservatives would be labelled extremists everywhere else.

[Unsapien]

No, I'm American. I understand American politics. Isn't Aractus Austrialian and under UK politics? That's what's confusing me. UK politics makes no sense to me.

"Under UK politics"?!

It's simple. What should a government do if a company is insolvent? If your answer is "C. don't let them go bust give them a bailout" you essentially support socialism. Socialism is a one-way street to corruption. You end up rewarding companies for poor management (at the best of times) and criminal corruption (at the other extreme). In the case of Virgin it was poor management governed by their shareholders that wanted them to operate the way they did. End of story.

Exactly. What happens is what has happened in Canada since I can remember, the airline asks for a bailout, gets it, doesn't learn from it's failure. Only learns that it can suck the governments teets whenever it needs to. Then when any new real competition comes along that offers better and/or cheaper service Air Canada invents a new airline to compete against it at much lower costs and then when the new start-up finally can't compete and goes bankrupt Air Canada lets its temporary creation go bankrupt & absorbs the loss. Does that every time and then once they've taken on too much dept it runs back to the government's teet for more money.

[Cavebear]

"Under UK politics"?!

It's simple. What should a government do if a company is insolvent? If your answer is "C. don't let them go bust give them a bailout" you essentially support socialism. Socialism is a one-way street to corruption. You end up rewarding companies for poor management (at the best of times) and criminal corruption (at the other extreme). In the case of Virgin it was poor management governed by their shareholders that wanted them to operate the way they did. End of story.

So you're the equivalent of an American conservative?

If so, that makes you bad.

There is no equivalent to American Conservatism, they're in a league all on their own.

Most of the rest of the world's conservative parties would be considered Left of even the Democrats, any group close to American Conservatives would be labelled extremists everywhere else.

Yeah, they are all crazy (in my personal opinion).

There is a rule in discussions that says "never compare anyone to a Nazi". OK, but they are are "darn close and getting closer".

[SYZ]

Yes, we need to remember the Holden fiasco here in Australia too.  It would appear the Federal government
has learned from this gross error of judgement.

General Motors Holden received $2.17 billion in Federal Government assistance from 2001 to 2013 in order to
ensure the company stayed in Australia.  In early 2013, Holden's director of government affairs Matt Hobbs  
insisted that the assistance was "good value for taxpayers", and that there would be 20 new models by 2020.
Also in 2013, GMH announced a $152.8 million loss however.   Less than three years later, in February 2017,
GM announced it would be shutting down its Australian operations and leaving the country.

I would've been outraged had our government given any handout to an overseas-owned Virgin Airlines.

Rather than the government spending $35 billion for 12 Attack-class submarines for the Australian navy that'll
be outdated when they hit the water, surely it'd be better value (for example) to purchase Virgin's entire 136
aircraft fleet, and virtually reinstate the defunct TAA/Australian branding as a government-owned, solely
domestic airline opposite a "new" international-only QANTAS.

[Thumpalumpacus]

An airline should be regulated for safety by the government. Aside from that, it should prosper or starve as the consumer see fits.

Some functions are so important that the government should regulate them more closely, and perhaps support if it benefits the weal of the population at large (clean drinking water is an issue here in America, also the energy/safety issues with PG&E in California come to mind.

But an airline? Pfft. There'll be another one along soon enough.

[Aractus]

So you're the equivalent of an American conservative?

If so, that makes you bad.

No it does not make me a "bad" person.

Socialism is bad.

In fact it's immoral, and the reason you don't realise that is two-fold. Firstly it's from your lived experience in a capitalist world: you quite understandably imagine that there exists something better. Secondly there's an information deficit which itself is in two-parts, the first being knowledge about history, and second and in my view more important being that the pro free-market community has failed to successfully communicate the benefits while the far-left have been allowed to spruik socialism.

If you want a clear example, one that's very relevant right now, a point of comparison, we can just directly compare the UK's socialist NHS to our free-market Medicare. I could explain in detail why our system is much better, but think about this - NHS doctors in the UK are paid a salary. A salary. They're paid a flat fee per patient that is registered with them. In some areas in the UK people have to wait up to two weeks for an appointment with the GP - hmm, I wonder why? Encouraging doctors to fill up their books with as many patients as possible couldn't have anything to do with it, could it? Doctors make the same amount of money from the patients that they don't even see in a year as the ones that actually need medical services several times a year. How does that make any sense?

Our system is completely free market. The Schedule, as we call it, sets out how much the government pays per service to doctors. They can then set their own fees - i.e. they can choose to take just the Medicare schedule fee (bulk-billing) or they can charge an amount on top. Bulk-billing is around 86% right now, meaning for 86% of consultations/appointments/minor surgeries/other visits with your GP there was no fee to be paid by the healthcare customer. In short, doctors get paid for actually doing work in Australia and in proportion to how productive they are. No one here has to wait two weeks to see a doctor - hell I doubt anyone has to to wait more than 2 days and that would be in deeply rural areas with a lack of adequate medical services. Also unlike the UK doctors have choice over what services they choose to offer - free market. And finally British doctors report being happier working here compared to under the UK's NHS. Another point of difference is that the medical centre where I'm registered - if I can't see *my* doctor because its her day off I can see one of the others, 7 days a week (they're open public holidays too), I can book an appointment same-day if I book in the morning. In the UK patients belong to their individual NHS doctor and they don't "share" even within the same practise.

Honestly I think the UK's pride in the NHS is complete bullshit, I think they should scrap it and bring in an Australian-style Medicare rebate system.

[Aractus]

Yes, we need to remember the Holden fiasco here in Australia too.  It would appear the Federal government has learned from this gross error of judgement.

General Motors Holden received $2.17 billion in Federal Government assistance from 2001 to 2013 in order to ensure the company stayed in Australia.  In early 2013, Holden's director of government affairs Matt Hobbs insisted that the assistance was "good value for taxpayers", and that there would be 20 new models by 2020. Also in 2013, GMH announced a $152.8 million loss however.   Less than three years later, in February 2017, GM announced it would be shutting down its Australian operations and leaving the country.

I would've been outraged had our government given any handout to an overseas-owned Virgin Airlines.

Rather than the government spending $35 billion for 12 Attack-class submarines for the Australian navy that'll be outdated when they hit the water, surely it'd be better value (for example) to purchase Virgin's entire 136 aircraft fleet, and virtually reinstate the defunct TAA/Australian branding as a government-owned, solely domestic airline opposite a "new" international-only QANTAS.

Well the car market is saturated, but I do appreciate the precedent in terms of government bailout funding availing to naught. I doubt their departure makes *any* meaningful difference in automotive, but as I mentioned above Ansett's collapse was ultimately shown to be positive for the market.

[Thumpalumpacus]

I don't think socialism is immoral, necessarily. It can be. It depends on the willing participation of citizens.

[Aractus]

An article in SMH by Neil Hansford appeared yesterday that goes over the motivations of the owners keeping Virgin Aust. in the red in much greater specificity detail than I did.

No reasonable person could argue for a taxpayer bailout of Virgin

“The fundamental Virgin business model was unsound. With a debt to be serviced believed to be in the order of $5 billion, the company was not in a position to pursue its ‘international adventures’.

“...

“In recent years, the company has accrued losses of over $1 billion on a turnover of $23 billion. There is no better sign that its strategy wasn’t working, not to mention that Virgin was not paying a cent of tax.

“The Virgin shareholding has always been a difficult mix, with more than 90 per cent of foreign ownership at the time of the airlines’ collapse. It is significant that Air New Zealand reluctantly sold its substantial shareholding when it couldn’t any longer influence the company's direction from on one it was unhappy with.

“The shareholding group had very different agendas. Government-owned Singapore Airlines wanted Virgin to feed to its international network. Etihad, also state-owned, in this case by Abu Dhabi, had similar aspirations to Singapore Airlines. The Chinese shareholder, Hainan, an instrument of the Chinese Communist Party, saw Virgin Australia as a method to get services to Hong Kong to support Hong Kong Airlines and Hong Kong Express. Nanshan, one of China’s top 500 companies, saw its VA investment as part of its international expansion. Richard Branson was most keen to protect the royalty for the Virgin name, which Virgin Australia paid him from Day One.

“When the government rebuffed its call for a $1.4 billion loan, management asked its well-heeled shareholders to come forward with a billion dollars in funds. They all declined to commit in realistic terms to refinance or sell to each other.

“...

“The narrative pushing a bailout has been driven by the Qantas and Alan Joyce haters and those who are concerned about a possible Qantas monopoly. But the ACCC's Rodd Sims would be watching Qantas should that ever eventuate and would keep it honest. ...

“with such a poor business strategy, administration was already likely and inevitable once COVID-19 hit the world.”

So just like I said their aim was to generate off-shore profits, but exactly how they did that and how much each of the five shareholders was getting remains complicated since their interests were obviously not completely aligned. Richard Branson has been paid around $200 million ($10 million per year) for the royalties to the Virgin trademark. The exact amount of the royalty has not been disclosed since 2013. The amount of profit the shareholders have generated overseas is not known, but it's hard to imagine it being significantly greater than the $5 billion in debts they generated for the airline here.

[SYZ]

Unfortunately, the ACCC is a toothless tiger.  It's forever "recommending", "warning", "advising" or "threatening" commercial miscreants,
but that's like hitting someone with a wet lettuce leaf.  The ACCC site says it cannot  "make formal decisions on whether a person or
business had breached the law as only the courts can do this".

And that's been made glaringly obvious by the current petrol pricing fiascos across all Australian states.

Three years ago, the ACCC published its broader enforcement priorities targeting:

   •  misleading and deceptive conduct, in particular by salespeople;  [gas/electricity salesmen, asphalt resurfacing and roof painting contractors knocking on pensioners' doors]

   •  cartels and anti-competitive conduct particularly in the commercial construction, energy, health and agricultural industries; [State governments "preferred tenderers" listings, energy suppliers    post-contractual price hikes]

   •  consumer guarantees in the airline, telecommunication and motor vehicle industries; [airlines refusing refunds for cancelled flights, Flight Centre pricing collusion, bandwidth "throttling" by telcos]

   •  non-compliance with the Franchising Code of Conduct, the Food and Grocery Code and the Horticulture Code; [Subway; Red Rooster; Wendys; Donut King; Michel's Patisserie; Brumby's Bakery;     Gloria Jeans - all shafted by franchisors]

   •  non-disclosure in the health insurance sector; [favours insurer as to what defines pre-existing condition and/or rejection of claim]

   •  companies failing to meet broadband performance and speed claims; [Telstra, Aussie Broadband selling unattainable 100Mbps plans, FTTP/copper pair fiasco]

   •  businesses charging excessive surcharges on debit and credit card purchases. ["Big 4" banks charging 19% to 21% on credit cards and $35 dishonour fees, $2.50 non-home ATM charges]

—So, after all these grandiose promises in 2017, the same old, same old still applies with the ACCC.