VAH.AX - Virgin Australia Holdings Limited

ASX - ASX Delayed price. Currency in AUD
0.0860
0.0000 (0.00%)
At close: 4:10PM AEST
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Previous close0.0860
Open0.0820
Bid0.1250 x 0
Ask0.0500 x 0
Day's range0.0820 - 0.0870
52-week range0.0500 - 0.1750
Volume4,577,489
Avg. volume2,763,525
Market cap726.289M
Beta (5Y monthly)0.25
PE ratio (TTM)N/A
EPS (TTM)-0.0410
Earnings date19 Aug 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend date25 Feb 2008
1y target est0.21
  • Bloomberg

    Bain Capital, Cyrus Emerge as Final Virgin Australia Suitors

    (Bloomberg) -- Bain Capital and Cyrus Capital Partners emerged as the final suitors for Virgin Australia Holdings Ltd. as administrators race to sell the airline before it runs out of cash.Deloitte, which is overseeing the sale, said Tuesday it whittled down possible buyers for the collapsed carrier to U.S. private-equity firm Bain and U.S. investment group Cyrus following five second-round bids last week. Deloitte described both groups as “well-funded.”Final offers are due by June 12, and Deloitte said it still plans to strike a deal by June 30.Virgin Australia has about A$100 million in cash, enough to see it through this month and complete the sale process, according to Deloitte. The airline collapsed in April, overwhelmed by about A$6.8 billion ($4.6 billion) in debt as revenue dried up in the coronavirus crisis.“We are in a strong place when it comes to delivering the best possible commercial outcome for all creditors, and to see a strong and sustainable Virgin Australia emerge from this process,“ Deloitte administrator Vaughan Strawbridge said in a statement.Representatives for Bain and Cyrus didn’t immediately reply to emails seeking comment.Cyrus has a history of aviation investment alongside billionaire Richard Branson’s Virgin Group Ltd., a 10% shareholder in Virgin Australia. Cyrus was also among the early investors in Virgin America.The latest shortlist drops Australian private equity firm BGH Capital, Brookfield Asset Management of Canada and private equity firms Indigo Partners and Oaktree Capital Management. Still, Deloitte left the door open for those parties and others to team up with the final bidders.“That will, of course, be a matter for them,” Strawbridge said in the statement.The state of Queensland is also considering co-investing in the airline through investment manager QIC in the hope of ensuring the business keeps its headquarters in the region, State Treasurer Cameron Dick has said.(Updates with background on bidder Cyrus in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bain Capital Plans Second-Round Bid for Virgin Australia
    Bloomberg

    Bain Capital Plans Second-Round Bid for Virgin Australia

    (Bloomberg) -- Bain Capital LP is preparing a second-round proposal to become the owner and operator of Virgin Australia Holdings Ltd., the U.S. alternative asset manager said on Sunday.Its Sydney-based managing director Mike Murphy is leading the team bidding for Virgin Australia, which entered voluntary administration last month. Bain Capital is being advised by KordaMentha and is supported by Jayne Hrdlicka, the former chief executive officer of budget carrier Jetstar.“We have the strongest capital base of any of the bidders,” Murphy said in an emailed statement. “We know aviation isn’t going to return to normal any time soon, but Bain Capital is here for the long haul with deep funding to navigate these difficult times.”Bain is among four shortlisted bidders vying for Virgin Australia, which collapsed in April overwhelmed by about A$6.5 billion ($4.2 billion) in debt. The carrier’s problems were amplified by years of losses and a severe revenue shortfall from coronavirus-linked travel cancellations.U.S. private equity firm Indigo Partners has said it would like a local partner for its bid. The other two shortlisted bidders are BGH Capital and Cyrus Capital Partners, the Australian Financial Review has reported, citing unidentified sources.Brookfield Asset Management Inc. is in discussions with administrators Deloitte over rejoining the bidding for the airline after withdrawing from consideration, people familiar with the matter said on Friday.Brookfield Is Said to Discuss Rejoining Virgin Australia BiddingDeloitte, which hasn’t named the shortlisted parties, has said it plans to work intensely with them as it seeks binding offers by mid-June.Bain Capital’s deal team includes 15 local Australian professionals, global leaders from private equity and credit businesses, and specialists in aviation, retail and consumer sectors, according to the statement.(Updates with details on Bain Capital’s adviser, background)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Brookfield to Discuss Rejoining Virgin Australia Bidding
    Bloomberg

    Brookfield to Discuss Rejoining Virgin Australia Bidding

    (Bloomberg) -- Brookfield Asset Management Inc. is in discussions with administrators for Virgin Australia Holdings Ltd. over rejoining the bidding for the airline after withdrawing from consideration, people familiar with the matter said.The Canadian asset manager had submitted a proposal before the May 15 deadline for indicative offers for the carrier, but withdrew over concerns about the competitive environment, said one of the people, who asked not to be identified as the discussions are private.Brookfield’s concerns about the process include that there are too many bidders and that the timeline is too short, both of which make it difficult to ascertain the key information they would need to firm up a bid, said the people.The revival of Brookfield’s bid would shake up a shortlist that Deloitte had described as a small number of well-funded parties with strong aviation credentials. The process has included as many as 20 parties initially expressing interest.Either the administrators or Brookfield could decide not to proceed with the discussions. Representatives for Brookfield and Deloitte declined to comment.In its May 18 statement confirming that it had determined the shortlist, Deloitte said it could not comment on who the chosen parties were due to confidentiality commitments.Deloitte has said it plans to work intensely with the shortlisted parties, as it seeks binding offers by mid-June.Virgin Australia entered voluntary administration last month after being overwhelmed by A$6.5 billion ($4.3 billion) in debt amplified by years of losses and a severe revenue shortfall from coronavirus-related travel cancellations.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Brookfield, Indian Tycoon Said to Mull Virgin Australia Bids
    Bloomberg

    Brookfield, Indian Tycoon Said to Mull Virgin Australia Bids

    (Bloomberg) -- Brookfield Asset Management Inc. and Indian aviation tycoon Rahul Bhatia are considering bids for Virgin Australia Holdings Ltd., joining a score of suitors seeking to capitalize on Asia’s first airline casualty from the coronavirus pandemic, people with knowledge of the matter said.The Canadian investment firm, which manages more than $540 billion, is planning to make its own indicative offer before the end of this week, according to the people. Brookfield could team up with other bidders later in the process, one of the people said, asking not to be identified because the information is private.Bhatia, the billionaire co-founder of Indian budget carrier IndiGo, is separately evaluating information on the Australian airline and finalizing his strategy for a potential bid, according to another person. The proposal is being prepared by Bhatia’s private holding company InterGlobe Enterprises Ltd. and doesn’t involve IndiGo, the person said.No final decisions have been made, and there’s no certainty the deliberations will lead to an agreement, the people said. Representatives for Brookfield and InterGlobe Enterprises declined to comment. IndiGo denied an earlier report it plans to bid for Virgin Australia.Brookfield’s interest was reported earlier by the Australian Financial Review, which cited unidentified people.Virgin Australia has attracted at least 20 potential buyers as its administrator, Deloitte, races to sell the airline within two months of its collapse. Deloitte is seeking indicative bids by Friday and binding offers in June, targeting a deal by the end of that month.The airline, which was started by Richard Branson, collapsed owing A$6.84 billion ($4.4 billion) to more than 10,000 creditors, overwhelmed by a near-halt in revenue as the coronavirus shut down travel.Virgin Australia reported seven consecutive annual losses before it folded. At the time of its first flight from Brisbane to Sydney in 2000, Virgin had just two aircraft and one route.Under Chief Executive Officer John Borghetti, who took over in 2010, the airline transformed itself into a full-service carrier, selling business-class seats across its domestic network. Borghetti went head-to head against his old employer, Qantas Airways Ltd.The huge investment required for the battle, and a capacity war with Qantas, spawned almost endless losses. Borghetti’s successor Paul Scurrah, who took the helm in 2019, was in the middle of a turnaround plan to reduce debt and costs when the coronavirus emerged and swamped any hopes of a recovery.A plan to operate Virgin as a low-cost carrier may run into opposition in Australia. Such a strategy would hand almost all the corporate and business-class market to Qantas, which itself owns budget carrier Jetstar. The head of Australia’s competition watchdog, Rod Sims, has already called for Virgin to return as a full-service carrier. The government also said it wants the country to have two competing airlines.(Updates the story throughout with Brookfield’s plans to lodge an indicative offer)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    This Cozy Airline Carve-Up Is a Pandemic Chimera

    (Bloomberg Opinion) -- What do you get for the airline magnate who has everything? If he knows what’s best for him, the answer isn’t “another airline.”Rahul Bhatia, the biggest shareholder in India’s biggest carrier, InterGlobe Aviation Ltd., is evaluating data and considering a bid for Virgin Australia Holdings Ltd., a person familiar with the matter told Anurag Kotoky and Angus Whitley of Bloomberg News. He would bid via the vehicle he uses to invest in IndiGo, as India’s biggest budget airline is known, the person said.It’s not hard to see the attractions. IndiGo’s home market is fiercely competitive, with half a dozen major carriers duking it out even after Jet Airways India Ltd. was forced into bankruptcy last year. Jet was squeezed between the loss-making full-service flights offered by state-owned Air India Ltd. and IndiGo’s own devastatingly cheap fares. Australia, on the other hand, is more or less a duopoly between Virgin Australia — which was itself put into a coronavirus-induced administration last month — and a dominant Qantas Airways Ltd. That should offer the opportunity for the two carriers to cozily carve up the market between themselves.Opportunities to break into the Australian airline game don’t come along often. The last time was when Ansett Australia Ltd. collapsed just days after the Sept. 11 attacks. A fledgling Virgin Australia, at the time a budget carrier named Virgin Blue, was perfectly placed to capitalize.Despite the vast disparity in population, Australia isn’t that much smaller than India as a market, thanks to greater wealth and a higher propensity to fly. Traffic last year came to about 71 billion revenue passenger kilometers, roughly the size of the fast-growing Indian aviation market five years ago. It also has close links to India, raising the prospect that an Australian network could feed passengers via international flights into IndiGo’s domestic web of destinations. Indian-Australians make up close to 2% of the population, and the number of non-resident Indians — the subset of the diaspora who are most likely to take regular flights back to the motherland — is the largest after the U.K., U.S., Singapore, Nepal, and the Persian Gulf countries.(1)For all that, Bhatia should pass up the chance to have a crack at Virgin Australia. In its ruthless efficiency in controlling its home turf, Qantas behaves a lot like IndiGo, one reason that Australia has for a decade been a graveyard for ambitious foreign airlines. His best opportunities lie closer to home.Both Qantas and IndiGo exploit a rare and priceless phenomenon known as the S-curve, by which dominant airlines end up with more connections and a greater share of traffic the more planes they add. That makes life extremely difficult for competitors.Singapore’s attempt to set up a bridgehead via an outpost of its budget carrier Tiger Airways Holdings Pte. ended up being sold to Virgin Australia back in 2014 at a valuation of A$2.50 ($1.62), after years of struggle. AirAsia Group Bhd. showed fitful interest in establishing a bigger presence Down Under, but ended up mostly steering clear.Virgin Australia itself spent years trying to break the Flying Kangaroo’s dominance with the backing of strategic overseas players. Ordinary shareholders hold less than 10% of the now-worthless stock, with the balance being held by a rotating cast of carriers including Etihad Airways PJSC, Singapore Airlines Ltd., Hainan Airlines Holding Co., Qingdao Airlines, Air New Zealand Ltd., and Richard Branson’s Virgin Group itself. Their indifference to profits enabled Virgin to compete against Qantas for longer than many would have thought possible, but it hasn’t been enough to win the battle.The distance between Australia and India is too great to make connecting the two markets an easy play, too. IndiGo’s aircraft of choice is the Airbus SE A320neo, which some budget carriers have been using to open up longer-range routes — but it would be operating at its limits even on flights between India and Perth, which is a long way from Australia’s more populous east coast. That would necessitate Bhatia either using an unfriendly hub airport in Southeast Asia, or investing in bigger, more expensive twin-aisle jets.IndiGo is so powerful in its home market that it’s natural its owners should be looking at overseas expansion — but as we’ve argued, the better place for that is in the Persian Gulf, where a far bigger Indian diaspora is closer to home and largely flown across the Arabian Sea on Gulf carriers such as Emirates.With a pandemic-induced passenger drought threatening most non-state-backed players in the global aviation market, this is no time for Bhatia to go planting seeds in Australia’s barren soil.(1) India also counts foreign citizens with Indian ancestry as "Persons of Indian Origin" but they're as a group probably less likely to travel to the subcontinent frequently.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Virgin Australia falls to virus crisis
    Reuters Videos

    Virgin Australia falls to virus crisis

    Virgin Australia has become Asia's biggest victim of the air travel industry's ongoing crisis. The country's second-biggest airline had reported an annual loss for seven straight years, even before authorities around the globe began restricting movement. It still managed to secure a third of Australia's domestic market before calling in administrators with a debt of over $3 billion U.S. dollars. But after the current crisis grew worse, Australian officials rejected a plea for an $800 million U.S. dollar loan. Now the airline's succumbed to restructuring that could lead to it being sold and the company has gone under 'administration' - Australia's closest thing to Chapter 11 bankruptcy. CEO Paul Scurrah called it a necessary decision. (SOUNDBITE) (English) VIRGIN AUSTRALIA CHIEF EXECUTIVE OFFICER, PAUL SCURRAH, SAYING: "This is not just something that is hurting Virgin Australia. We know it's hurting the industry globally and is the worst aviation crisis we have ever seen in our history. We're not immune to that. Our board made a very courageous decision last night to put the company into voluntary administration and do so quickly, with the intent of working with our administrator Deloitte to come through and be as strong as we possibly can on the other side of this crisis." More than 90% of Virgin's shares are controlled by a group of investors including Singapore Airlines, Etihad Airways, Chinese conglomerate HNA Group and Richard Branson's Virgin Group. The airline is continuing to fly a skeletion schedule for now. The company's Deloitte administrator says the aim is to complete a sale within a few months.

  • Richard Branson Doesn't Have a Drop to Drink
    Bloomberg

    Richard Branson Doesn't Have a Drop to Drink

    Water, water, everywhere, Nor any drop to drink. (Bloomberg Opinion) -- Richard Branson, the billionaire entrepreneur and occasional poet, spends much of his time on his private island, Necker, indulging a passion for kite surfing. And he’s risked life and limb crossing the Atlantic and Pacific oceans in a hot-air balloon. But it’s only in the past few days that the above line from Samuel Taylor Coleridge’s “Rime of the Ancient Mariner” will have begun to resonate as regards his financial affairs.On Monday he penned an extraordinary public letter appealing to the British government to provide an emergency loan to prevent the collapse of transatlantic carrier Virgin Atlantic Airways Ltd., which he owns jointly along with Delta Air Lines Inc. of the U.S.Travel restrictions to curb the new coronavirus have walloped Branson’s travel and leisure holdings. He’s already spent $250 million to support his various Virgin Group portfolio companies, but most of his $5.9 billion net worth isn’t “sitting as cash in a bank account ready to withdraw,” Branson said. That has forced him to consider the drastic step of mortgaging his beloved Caribbean island home, which doubles as an ultra-expensive retreat.On one level Branson’s predicament is simple, and pretty common for someone about to turn 70: He’s asset rich, and cash poor. But considering his pretty relaxed approach to business, Branson’s financial arrangements — spanning his British Virgin Islands tax residency and a portfolio of often debt-laden holdings — are as complicated as they come.This, alongside the unappealing politics of being seen to bail out a billionaire, makes governments wary of offering a helping hand. Another of his investments, Virgin Australia Holdings Ltd., collapsed into administration this week, having failed to secure a lifeline from Canberra. British regional airline Flybe, in which Virgin held a minority stake, went bust last month after Boris Johnson’s government declined to provide further assistance.Branson has plenty of financial capital but he appears to have very little of the political kind. Even now that he’s put the keys to the family home on the table, this probably won’t change. Helped by his gift for self-publicity, many Britons are as familiar with Branson’s business career as they are with their own personal finances. But the consequence of stamping the Virgin name on everything, often in return for no more than a licensing fee, is that the public thinks he owns half of the economy and is in no need of a handout.In reality, Branson has exited businesses such as the broadband provider Virgin Media (now owned by Liberty Global) and he owns only a small piece of high-profile companies like Virgin Money UK Plc, gym chain Virgin Active and Virgin Trains USA (operator of a high-speed Florida rail line).  Branson’s talent has attracted wealthy partners, willing to invest alongside him in return for a share of the profits. One of the more unfortunately timed of these was a fleet of Virgin-branded cruise ships, co-funded by Bain Capital and the Singapore sovereign fund GIC Pte., due to start sailing this year.  Because Branson doesn’t own many Virgin Group companies outright, he can’t easily switch cash between one investment and another. And having multiple owners complicates decisions on who should bail the business out when trouble strikes. Delta and the U.S. government haven’t offered publicly to help Virgin Atlantic, for example. At Virgin Australia the buck stopped with Etihad Airways, Singapore Airlines and other foreign airline investors whose holdings were larger than Branson’s 10% stake.    Some of Branson’s businesses were struggling before the coronavirus struck. Virgin Atlantic lost money in the last two years for which there are published accounts. It carries a lot of debt, rents many of its planes and funded its daily operations with cash from selling tickets in advance. Passengers whose flights have been cancelled are demanding refunds. Even the company’s valuable Heathrow takeoff slots have been used as collateral.Lately Branson has reinvested profits and dividends from his various ventures into the cruise ships venture, a chain of American hotels and, above all, his space-travel company Virgin Galactic Holdings Inc. But with millions of people fretting about how to make their next mortgage or car payment, even the jobs created by these new Virgin ventures are no guarantee of winning taxpayer support. His Virgin Galactic stake is worth almost $2 billion by my calculation.(1) Monetizing it might not be easy(2) but as collateral it’s worth much more than Necker.In making his case for a bailout, Branson cited the detrimental impact on competition if his airlines were allowed to fail. He’d be the first to admit, though, that failure is part of being an entrepreneur. If he can’t persuade commercial backers to provide loans, then governments too must drive a hard bargain in exchange for assistance.Unlike Coleridge’s sailor, the similarly gray-bearded Branson might have some drinkable financial water. For now, it happens to be tied up in spaceships.(1) Based on the current share price and adjusting for Aabar's ownership interest.(2) Details of the shareholder lockups are in this SEC filing.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    The Era of Airline Buccaneers May Be Ending

    (Bloomberg Opinion) -- Aviation has always carried a whiff of the pirate ship about it. Richard Branson, founder of Virgin Atlantic Airways Ltd., likes to describe himself as an “adventurer and troublemaker,” and once claimed to have found buried treasure on his private Caribbean island as a prank.Right now, the buccaneering executives who have driven the airline industry since the 1980s, when the era of state-owned flag carriers started to break down, are facing their appointment with the gallows.Branson’s Australian affiliate, Virgin Australia Holdings Ltd., was taken into administration Tuesday after years of losses. Virgin Atlantic will go the same way if it doesn’t receive a government loan, Branson wrote in a letter to employees Monday.Other carriers may be heading in the same direction. South African Airways is planning to lay off its entire workforce after years of losses, Bloomberg News reported last week; Norwegian Air Shuttle ASA’s debt-for-equity workout is heading down to the wire; bonds issued by Colombia’s Avianca Holdings SA due in 2023 are trading at 20 cents on the dollar, while PT Garuda Indonesia sukuk due in June are at 48 cents.The major American players aren’t immune, either. Five-year credit default swaps protecting against non-payment of American Airlines Group Inc.’s debt have soared to 2,883 basis points, with United Airlines Holdings Inc. on 960 basis points and Delta Air Lines Inc. at 694 basis points. These are fear-and-loathing levels: Lehman Brothers Holdings Inc.’s swaps peaked at 707 basis points on the eve of its 2008 collapse.There are plenty of national champions among that group of walking wounded. Still, the differing experiences of Virgin Australia and its 20% shareholder Singapore Airlines Ltd. suggest that robust state ownership, for so long considered a millstone for ambitious airline companies, is turning into a life-raft.Singapore’s $10.5 billion capital raising last month — backed by its largest shareholder, state-owned investment company  Temasek Holdings Pte. — is the most striking instance of support offered to an airline in the current crisis. Less than a tenth of that sum would have been sufficient to provide the A$1.4 billion ($882 million) rescue loan that Virgin had sought from the Australian government. There’s no legal barrier to Singapore buying out the remaining 80% of the company. Consolidating control would have given it a stronger foothold in a domestic aviation market that it once coveted, at a time when only within-country flights are likely to be operating in significant numbers for some time. It’s telling, then, that the company  turned down this option.Since the dawn of commercial flying, aviation businesses have had a complicated relationship with nation states. After an initial flurry of private enterprise, most of the global industry was nationalized during World War II and remained that way until the deregulation of the 1980s.In recent decades, former flag carriers such as British Airways have been privatized and at times amalgamated into cross-border giants, while budget airlines have swallowed up short-haul market share to become some of the most profitable businesses in the global industry. The only state-owned airlines that have prospered have been those, like Singapore Air and Emirates, that have been able to count on the traffic of busy hub airports and the unquestioning backing of their governments.For all that, aviation is anything but a free market. Most of the world’s airline routes are oligopolies where only a handful of carriers compete. The number of seats available between countries is still decided in government-to-government treaty talks, which often limit the ability of commercial carriers to operate. Airlines remain a vital piece of national infrastructure, and can throw themselves on the mercy of governments if things get tight.We may be on the brink of a realignment as dramatic as the 1980s privatizations. The Austrian, Swiss and Belgian governments are all in talks with Lufthansa AG about support for the former flag-carriers that it absorbed in recent decades. Air France-KLM’s state shareholders in Paris and The Hague are looking to do the same. In most cases, it’s doubtful whether these attempts will be sufficient to survive an extended crisis. It’s hard for governments to argue that full-service airlines are a national interest as vital for European nations as they are for an island-state like Singapore, especially when rail travel causes so much less carbon pollution.The result is likely to be a hollowing out of the middle ground. Budget airlines such as Southwest Airlines Co., Ryanair Holdings Plc and Interglobe Aviation Ltd. have always known that they had no hope of government support. As a result, their more conservative balance sheets, lower costs and smaller shares of long-haul traffic given them the best chances of survival. True state champions such as Singapore Air and Emirates can count on the indulgence of their shareholders, too.The hybrid carriers that remain, however, will find the going tough. Neither lean enough to survive on their own, nor politically connected enough to count on unlimited support, they may find the implicit backing of their governments less forthcoming than they’d hoped.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Australia’s Morrison Wants Pensions to Fund Company Bailouts

    (Bloomberg) -- Australia’s Prime Minister Scott Morrison wants the nation’s pension funds to take more action to cushion the blow from the coronavirus crisis.In an interview with the Australian Broadcasting Corporation’s 7:30 program Thursday night, Morrison said the nation’s A$2.95 trillion ($1.9 trillion) pension pot should be used to bail out companies as the government “is not the only economic actor in this event.”“I’d like to see the industry and broader superannuation funds playing a more active role in dealing with the economic issues that we’re dealing with at the moment,” he said.The plea comes as Australia begins pumping an unprecedented amount of stimulus into the economy in a bid to avert falling into a crippling long-term recession. It’s pledged more than A$320 billion in fiscal and monetary measures, including an A$130 billion jobs-rescue plan to subsidize wages and keep struggling businesses afloat.The government has also relaxed rules to allow people hit by the epidemic to dip into their retirement savings early. Pension funds expect up to A$50 billion will be given to those taking advantage of the scheme, causing liquidity fears at the worst affected funds.The most pressing issue is Virgin Australia Holdings Ltd. that’s suspended from trading amid discussions over a potential financial restructuring. It had asked the government for a A$1.4 billion loan to weather the crisis after stopping virtually all services as authorities restricted domestic and international travel to slow the virus’ spread.While the government wants two commercially viable airlines, which would include Virgin’s main Australian competitor, Qantas Airways Ltd., Morrison said it will only offer support on an industrywide basis and won’t “get in the way of a commercial solution.” Instead, pension funds including TWUSUPER, the scheme that looks after A$5.5 billion in retirement savings for transport and logistics workers, should recapitalize the airline, he said.“Its own workers have been paying in to industry funds and there are funds out there, in these super funds that could be investing in a number of companies,” Morrison said. “I appreciate that comes in a different risk premium, but this is their own contributors that are involved here.”TWUSUPER didn’t immediately reply to a request for comment outside normal business hours. Industry Super Australia, the body that represents 15 union-aligned not-for-profit pension funds, declined to comment.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Australian Employment Holds Up for Now as Virus Blow Looms
    Bloomberg

    Australian Employment Holds Up for Now as Virus Blow Looms

    (Bloomberg) -- Australia posted a surprise rise in jobs in March before the full impact of coronavirus restrictions was captured and was likely bolstered by hiring at supermarkets and associated supply chains to assist with a surge in spending ahead of the lockdown.Confounding the expectations of most economists, employers added 5,900 roles versus estimates for a 30,000 drop. The jobless rate edged up to 5.2% from 5.1% in February and the participation rate held at 66%.The statistics agency said the lack of impact from the virus was mainly due to surveys falling in the first half of March, when there was a relatively low number of confirmed COVID-19 cases and many of the trading restrictions had either not yet been announced or taken effect.“Impact from the major COVID-19 related actions will be evident in the April data,” said Bruce Hockman, chief economist at the Australian Bureau of Statistics.The Australian dollar initially trimmed some of its decline after the data, but within an hour was back where it started, down 0.5% at around 62.90 U.S. cents.Companies ranging from Australia’s two major airlines to casino operator Star Entertainment Group Ltd. to department store chain Myer Holdings Ltd. have furloughed or stood down tens of thousands of workers as demand collapsed amid forced shut downs.The government and central bank responded with a massive fiscal-monetary injection worth 16.4% of gross domestic product to support an economy spiraling toward its first recession in almost 30 years. The Treasury forecasts unemployment to climb to 10% this quarter and said it would probably have reached about 15% if not for the government spending measures.Among other details in the report:Under-employment climbed 0.1 percentage point to 8.8%Full-time jobs fell by 400 and part-time roles rose 6,400Monthly hours worked in all jobs increased by 8.6 million hours or 0.5%At a state level, the largest increases in employment were recorded in Victoria, up 13,300, and South Australia, up 3,500In Mid-March, Coles announced it was recruiting more than 5,000 casual team members to work in its supermarkets across Australia to allow outlets to replenish shelves faster amid a pre-lockdown buying frenzy.Qantas Airways Ltd. last month furloughed most of its 30,000-strong workforce and rival Virgin Australia Holdings Ltd. temporarily stood down 80% of its workforce. Star furloughed 90% of its 9,000 employees after the government ordered the closure of casinos.Australia’s tourism and hospitality industries were hit first by the bushfire crisis over summer, then the initial coronavirus outbreak in top trading partner China stopping travelers during the peak time of Lunar New Year, and now by lockdowns at home.The pandemic has already had a dramatic impact on consumer and business confidence. Reports this week showed household sentiment fell by the most in the 47-year history of the survey and the outlook for firms tumbled to the lowest reading ever.(Updates with details from report)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Australia Tells Citizens Not to Travel Abroad, Bans Gatherings
    Bloomberg

    Australia Tells Citizens Not to Travel Abroad, Bans Gatherings

    (Bloomberg) -- Prime Minister Scott Morrison warned all Australian citizens not to travel abroad indefinitely and banned non-essential gatherings of 100 people or more, in a dramatic escalation of the government’s response to the coronavirus outbreak.The “Level 4” advice against any international travel is unprecedented, Morrison told reporters in Canberra Wednesday after meeting with the national cabinet and medical officials late yesterday.The government also declared a human biosecurity emergency to enable authorities to deal with the growing crisis that has infected more than 450 people in Australia and left five people dead. Schools and universities will remain open.“This is a once in a 100-year type of event,” Morrison said. “There is no two-week answer to what we are confronting,” he said. “We are looking at a situation of at least six months for how we deal with this.”Australia had already banned mass gatherings of 500 people or more, leading to a wave of sporting and cultural events being canceled. The government is also urging Australians overseas to return home before other nations enact travel bans.Morrison said public transport will remain open, but he emphasized the importance of social distancing to halt the spread of the virus. Public Anzac Day commemorations on April 25, which recognize war veterans in Australia and New Zealand, will be halted both home and abroad.The measures are another escalation of the response by the government, which has announced a A$17.6 billion ($10.6 billion) stimulus package to buttress the economy and ordered anyone arriving in the country to self-isolate for 14 days.Nations around the world are trying to shield citizens from the deadly virus, imposing curfews, lockdowns, travel bans and shutting shops, bars, schools, and restaurants.Australian stocks have joined other global indexes in collapsing into a bear market amid growing concern about the economic impact of the spreading virus. The nation’s benchmark index has fallen 26% from its Feb. 20 record high as of the close of trading Tuesday, and the Australian dollar has slipped below 60 U.S. cents.The government also unveiled a A$715 million relief package for Qantas Airways Ltd., Virgin Australia Holdings Ltd. and other regional airlines, including refunds and waivers of fuel excise, air services charges and regional security fares.Virgin Australia announced on Wednesday it will suspend all international flights until June 14 and will slash domestic capacity by 50%. That followed the move by Qantas to cut international flights by 90% and domestic trips by 60%Morrison said his government is working on further economic support designed to cushion the impact on small businesses and welfare recipients. He urged Australians to stop hoarding supplies amid scenes of chaos in supermarkets as people strip shelves of food.“Stop hoarding,” Morrison said. “I can’t be more blunt about it. Stop it. It is not sensible, it is not helpful and it has been one of the most disappointing things I have seen in Australian behavior in response to this crisis. That is not who we are as a people.”(Updates with details of measures in 6th paragraph and throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • CEO, MD & Director Paul Scurrah Just Bought Shares In Virgin Australia Holdings Limited (ASX:VAH)
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  • Airlines Aren’t About to Succumb to the Coronavirus
    Bloomberg

    Airlines Aren’t About to Succumb to the Coronavirus

    (Bloomberg Opinion) -- Airlines are perpetually on the alert against crashes. That doesn’t mean the coronavirus epidemic will lead to any corporate disasters.The outbreak that originated in the Chinese city of Wuhan could push some airlines in Asia to the wall, according to Alan Joyce, chief executive officer of Australia’s biggest carrier Qantas Airways Ltd. “A lot of airlines may not be able to keep some of these operations going,” he told Angus Whitley and Kyunghee Park of Bloomberg News. “It’s survival of the fittest.”Such an outcome would provoke some schadenfreude at Qantas, the best-performing full-service carrier in a Bloomberg index of Asia-Pacific airlines over the past year. At the same time, it’s hard to point to any major company that’s plausibly close to the edge. While the aviation industry is perpetually teetering on the edge of profitability, one of the main reasons is that so many carriers are controlled by indulgent shareholders who will go to extraordinary lengths to see their businesses through rough patches.The impact of the epidemic is likely to be sharp. In 2003, SARS caused Asia-Pacific carriers to lose $6 billion in revenue and 8% of their traffic, according to the International Air Transport Association.At the same time, it will probably be short, too. As we’ve written, coronaviruses are winter diseases that should be well and truly in retreat by late spring. Should control measures now being implemented prove effective, recovery could be under way even sooner. If SARS is any guide, that will trigger a surge of pent-up demand from leisure and business travelers.Then there’s the fact that people around the world don’t just decide to stop travelling because there’s a virus outbreak in China. Indeed, the more likely response in many countries will be to encourage tourists to stay closer to home. That may benefit airlines’ domestic aviation businesses, which tend to be more profitable than longer-haul international arms.China’s market has remained frustratingly closed. Right now, that may be a blessing. About two-thirds of the passenger traffic beginning or ending at Chinese airports is operated by mainland carriers or Hong Kong-based Cathay Pacific Airways Ltd. The remaining traffic with a Chinese leg represents only about 5.7% of the global market, so only the most China-exposed operators are likely to see a material shock.Some airlines are clearly more vulnerable than others. Thailand, a major destination for Chinese tourists, is home to four struggling carriers where fierce competition has driven passenger revenue below operating costs, causing the listed industry to lose about three-quarters of its market capitalization in the past three-and-a-half years.Still, while all four are failing to pay their interest expenses out of income and only Thai Airways International Pcl can boast positive free cash flow, other factors may support them.Bangkok Airways Pcl was founded and is controlled by Prasert Prasarttong-Osoth, who may do quite well over the next few months since his fortune is based on operating private hospitals. Nok Airlines Pcl has a similar relationship with the Jurangkool auto-parts dynasty, and had already been acquiring fresh loans and capital infusions to keep its planes in the air. Thai Airways, which quashed speculation of imminent bankruptcy last year, is majority-owned by the government, while Asia Aviation Pcl is the local arm of the AirAsia Bhd empire, so should be able to count on similar support from head office.There’s no shortage of forgiving shareholders among cash-strapped airlines elsewhere in the region. PT Garuda Indonesia is, like Thai Airways, controlled by the government; PAL Holdings Inc. by Philippines billionaire Lucio Tan. Asiana Airlines Inc. and Virgin Australia Holdings Ltd. have been struggling for years, but the former was bailed out by a consortium of local investors in December while the latter has a long history of being supported by offshore airlines interested in keeping Qantas on the backfoot in its home market.It’s a similar picture in China itself, which will take the brunt of the impact. Only Air China Ltd. has been consistently racking up positive free cash flow of late, but every major listed carrier has ample interest coverage so shouldn’t be fearing imminent talks with creditors.Those that are state-owned enterprises will be able to count on the state standing behind them; Hainan Airlines Holding Co., which isn’t exactly, is already being looked after as part of the multi-year workout of the buying spree that its controlling shareholder HNA Group Co. went on in the middle part of the last decade.Cathay, for its part, has endured an annus horribilis but has for generations been a favorite child of its largest shareholder Swire Pacific Ltd. Like Virgin Australia, it has enough deep-pocketed owners to see it through a rough patch.That doesn’t mean that the region’s airlines won’t struggle over the months ahead. Still, the dream scenario for Qantas — where competitors go under and take some capacity out of Asia’s fiercely competitive market — may remain just that: a dream.To contact the author of this story: David Fickling at dfickling@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Have Insiders Been Buying Virgin Australia Holdings Limited (ASX:VAH) Shares?
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    Hong Kong Airlines Delay Salaries Due to Unrest in Hong Kong

    Investing.com - Chinese conglomerate HNA Group’s Hong Kong Airlines has has to delay salaries for some of its staff as its business has been “severely affected” by unrest in Hong Kong, the airline said in a statement released on Friday.

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  • Investing.com

    Asian Markets Mixed as Traders Await More Sino-U.S. Trade News

    Investing.com - Asian markets were mixed in morning trade on Wednesday as traders monitored developments on U.S.-China trade.

  • More Airlines Ban MacBook Pros in Checked Luggage
    Bloomberg

    More Airlines Ban MacBook Pros in Checked Luggage

    (Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Restrictions on MacBook Pro laptops on flights spread, with Qantas Airways Ltd. barring some models from checked-in luggage on concern that batteries could catch fire.All 15-inch versions of Apple Inc.’s MacBook Pro must be carried in the cabin and switched off, Qantas said in a statement Wednesday. The rule went into effect Tuesday morning. Rival Virgin Australia Holdings Ltd. went further on Aug. 26, banning all Apple laptops from checked-in luggage.Australia’s two biggest airlines join a growing list of carriers and jurisdictions across the world cracking down on the portable computers out of concern some could self-combust.The models in question are some 15-inch MacBook Pros sold from September 2015 to February 2017. Apple issued the recall in June, saying “in a limited number of older generation 15-inch MacBook Pro units, the battery may overheat and pose a fire safety risk.”Singapore Airlines Ltd. and Thai Airways International PCL have already stopped passengers from taking any of the affected models on their aircraft.The U.S. Federal Aviation Administration earlier this month said it alerted major U.S. airlines about Apple’s recall. The FAA reminded airlines to follow 2016 safety instructions for goods with recalled batteries, which means the affected Apple laptops should not be taken on flights as cargo or carry-on baggage.The European Union Aviation Safety Agency issued its own warning about these MacBook Pro models on Aug. 1.While there have been repeated incidents of phones, laptops and other devices overheating and catching fire in planes’ passenger compartments, a fire hasn’t ever gone out of control. There have been at least three accidents, two of them fatal, on cargo airlines since 2006 in which lithium batteries were suspected of causing fires.To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Reed Stevenson, Angus WhitleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Investing.com

    Asian Markets Mixed; Inversion of U.S. Treasury Yield Curve, Trade War in Focus

    Investing.com - Asian markets were mixed in morning trade on Wednesday. An inversion of the U.S. Treasury yield curve sparked some concerns, while the latest developments on the Sino-U.S. trade war remained in focus.