AVIATION Draw Down.

[lancer425]

Just now, AVB said:

Who in their right mind would want to holiday in the UK! It's overpriced, service is ****, people are generally ungrateful and weather is normally pants as well. Happy to see fewer cheap flights around though, especially if it stops the great unwashed from travelling and cluttering up decent places abroad. Nothing worse than arriving at an airport and seeing a flight from Liverpool or Manchester arrive! In fact close regional airports south of East Midlands, and leave one in Scotland.  Actually close Luton and Stansted as well as they only survive on low cost airlines. 😂    

Uk holidays might have been over priced compared to Spanish Greek Portuguese etc holidays prior to this pandemic. But who is to say that status will survive this economic minefield.

Might be the travel alone would buy the entire British holiday by the time this is all finished.

 

[Konnie]

I think  a point is being missed, what about how many 100s of millions of PROFIT  that has been made say over the last 5yrs by these large outfits, and handed out in dividends etc. Then when it gets tough its someone else's fault how about a bail out.

Too me it seems like a oneway street mostly driving in the company's favour, or so they would like.??.just how it looks.

[AVB]

1 minute ago, lancer425 said:

Uk holidays might have been over priced compared to Spanish Greek Portuguese etc holidays prior to this pandemic. But who is to say that status will survive this economic minefield.

Might be the travel alone would buy the entire British holiday by the time this is all finished.

 

I am not sure. BA recon that the holiday market will recover quite quickly but that business travel will take longer to recover. Part of me agrees with you but many countries are so dependent on tourism that they will be desperate to attract visitors and will slash prices. So flights might go up but accommodation will come down. 

 

2 minutes ago, Konnie said:

I think  a point is being missed, what about how many 100s of millions of PROFIT  that has been made say over the last 5yrs by these large outfits, and handed out in dividends etc. Then when it gets tough its someone else's fault how about a bail out.

Too me it seems like a oneway street mostly driving in the company's favour, or so they would like.??.just how it looks.

If a company makes a profit then it pays Corporation Tax on those profits. Anything left over can be paid as a dividend. If the Government is imposing restrictions that prevent that company from trading don't you think it fair that the Government should help out considering the tax it would have paid in the past? Or are you saying there should be no state aid at all, including the furlough scheme?     

[grrclark]

24 minutes ago, Dave-G said:

You are much more capable than me at finding facts - would I be right to say most very big business is actually run on credit or debt?

There is not a single answer to the question and it really cannot be broken down that simply.

Where were you going with asking the question though?

[Dave-G]

3 minutes ago, lancer425 said:

Uk holidays might have been over priced compared to Spanish Greek Portuguese etc holidays prior to this pandemic. But who is to say that status will survive this economic minefield.

Might be the travel alone would buy the entire British holiday by the time this is all finished.

 

That's my thinking too, UK holidays are made to appear expensive because of the too cheap package holidays that manage solely on stack it high sell it too cheap bargains. Several holiday firms have gone bust leaving people stranded over seas over the last few years. Totally irresponsible in my opinion. I suspect far too many large industries are running on credit or other peoples money. 

[TIGHTCHOKE]

3 minutes ago, Dave-G said:

That's my thinking too, UK holidays are made to appear expensive because of the too cheap package holidays that manage solely on stack it high sell it too cheap bargains. Several holiday firms have gone bust leaving people stranded over seas over the last few years. Totally irresponsible in my opinion. I suspect far too many large industries are running on credit or other peoples money. 

And who pays for the rescue?

Edited May 1, 2020 by TIGHTCHOKE
a W

[Dave-G]

2 minutes ago, grrclark said:

There is not a single answer to the question and it really cannot be broken down that simply.

Where were you going with asking the question though?

just that airlines and holiday companies going bust suggest to me they are being run too cheaply.

 

2 minutes ago, TIGHTCHOKE said:

And ho pays for the rescue?

I think a reserve fund?

 

[lancer425]

5 minutes ago, AVB said:

I must have been asleep when that was going on. I can understand the hostility towards Branson but not towards VA. And why single out VA when many other companies have foreign shareholders who probably don't pay UK income tax. 

Very true and companies like BA can see the writing on the wall I think here their statement about reassessing †he need for their Gatwick hub. 

Like anything Air lines  are going to have to adapt and survive. the aviation environment "financial / logistics/ diversification"  Will have to scale down to fit in with demand, which is  governed by their  users disposable cash.

It could be we are at or will at least see big downturns in the holiday/ aviation business. Not even the venues abroad are going to be unaffected.  Lots to consider with few if any certainties.

[TRINITY]

As far as ryanair are concerned, it's up to the Irish and their European mates to bail them out. Also as far as I am aware ryanair have all their planes on lease so if they go down they will make a massive problem for someone else.

[Konnie]

3 minutes ago, AVB said:

I am not sure. BA recon that the holiday market will recover quite quickly but that business travel will take longer to recover. Part of me agrees with you but many countries are so dependent on tourism that they will be desperate to attract visitors and will slash prices. So flights might go up but accommodation will come down. 

 

If a company makes a profit then it pays Corporation Tax on those profits. Anything left over can be paid as a dividend. If the Government is imposing restrictions that prevent that company from trading don't you think it fair that the Government should help out considering the tax it would have paid in the past? Or are you saying there should be no state aid at all, including the furlough scheme?     

As I see it the furlough scheme is there to protect employees as a asset to the company,  the company should have enough foresight to maintain enough operating capital, as banks were eventually made too.  Not purchasing planes on credit  so monies can be paid out this format only works when times are good, 

This is again only as I see it I'm furloughed and work in construction my boss still has to pay for plant  etc smaller scale just upscale on multimillion industries. 

[AVB]

6 minutes ago, Dave-G said:

That's my thinking too, UK holidays are made to appear expensive because of the too cheap package holidays that manage solely on stack it high sell it too cheap bargains. Several holiday firms have gone bust leaving people stranded over seas over the last few years. Totally irresponsible in my opinion. I suspect far too many large industries are running on credit or other peoples money. 

I suspect that the pressure on the travel companies has come about through people 'self selecting' their holiday on-line rather than the traditional way of booking a package holiday via a travel agent. When you used to go on holiday abroad you went into a travel agents and booked it. Now you do all of the research on-line and book cheap flights and accommodation independently via Expedia etc.  

[lancer425]

7 minutes ago, TIGHTCHOKE said:

And who pays for the rescue?

Absolutely TC.

14 minutes ago, Dave-G said:

just that airlines and holiday companies going bust suggest to me they are being run too cheaply.

 

I think a reserve fund?

 

And Ultimately us.

[TRINITY]

16 minutes ago, TIGHTCHOKE said:

And who pays for the rescue?

TC this got me thinking a little wider on this subject. As far as I remember with the Brexit process many companies moved their head offices to Ireland to keep in the EU. I really hope when some of these get out the begging bowl,which will inevitably happen, they are told to foxtrot oscar and go and ask the Irish government.

[TIGHTCHOKE]

4 minutes ago, TRINITY said:

TC this got me thinking a little wider on this subject. As far as I remember with the Brexit process many companies moved their head offices to Ireland to keep in the EU. I really hope when some of these get out the begging bowl,which will inevitably happen, they are told to foxtrot oscar and go and ask the Irish government.

Good point, but if I remember the last collapse of a hoiliday firm the Government stepped in and ultimately the Britis Tax Payer picked up the bill.

 

So much for all the holiday insurance schemes.

[oowee]

10 minutes ago, TRINITY said:

TC this got me thinking a little wider on this subject. As far as I remember with the Brexit process many companies moved their head offices to Ireland to keep in the EU. I really hope when some of these get out the begging bowl,which will inevitably happen, they are told to foxtrot oscar and go and ask the Irish government.

Interesting point but there are very many on here that would deny that we lost business as a result of Brexit. I am with the sentiment entirely but hope that the government will look at the impact to UK interests and in particular UK jobs. After all many of these businesses are in part owned by you and me. 

Edited May 1, 2020 by oowee

[grrclark]

21 minutes ago, oowee said:

Interesting point but there are very many on here that would deny that we lost business as a result of Brexit. I am with the sentiment entirely but hope that the government will look at the impact to UK interests and in particular UK jobs. After all many of these businesses are in part owned by you and me. 

Yep, for every person clamouring for those listed businesses to be allowed to go bust they need to be checking their pension funds or other investment vessels.

Could get very ugly very quickly.

[TRINITY]

I use ryanair a lot to go over to Spain, I have already lost 2 sets of flights that I paid for which were cancelled.  The first lot, they offered me a refund, but never paid a thing to me so far. Now they are only offering credit notes as far as I know. Talking to others,they are also offering credit notes to them for lost flights. Knowing that little snake o,Leary, he will  build up a massive credit note back log, then wind the company up. This will enable him to wipe slate clean debt wise. Get all his leased planes back on better financial terms. Re employ most of his staff on worse contracts and employment terms. Ok it's a wild guess, but knowing ryanair I would not bet against it.

[JohnfromUK]

3 minutes ago, TRINITY said:

Now they are only offering credit notes as far as I know.

Not sure that is correct.  He was interviewed today (Radio 4) and was specifically asked that question.  He said (on radio) that refunds can be in cash if requested, but may take 'some months'.

Then again - what he says and what actually happens may not be joined up.

[oowee]

7 minutes ago, TRINITY said:

I use ryanair a lot to go over to Spain, I have already lost 2 sets of flights that I paid for which were cancelled.  The first lot, they offered me a refund, but never paid a thing to me so far. Now they are only offering credit notes as far as I know. Talking to others,they are also offering credit notes to them for lost flights. Knowing that little snake o,Leary, he will  build up a massive credit note back log, then wind the company up. This will enable him to wipe slate clean debt wise. Get all his leased planes back on better financial terms. Re employ most of his staff on worse contracts and employment terms. Ok it's a wild guess, but knowing ryanair I would not bet against it.

I am in the same boat with two ticket to South Africa with SA airlines. They are close to going bust or bust already. Fortunately I paid with credit card.

[lancer425]

4 minutes ago, grrclark said:

Yep, for every person clamouring for those listed businesses to be allowed to go bust they need to be checking their pension funds or other investment vessels.

Could get very ugly very quickly.

I don’t think anybody is / will be CLAMOURING to see any  Aviation companies go bust. But i also think the bail out tab being picked up by the tax payers of this country is getting old.

There has to be a balance somewhere and The aviation companies need to start taking responsibility for how they operate. Dane gelt was a bad idea in 800Ad and its still the same today.

[grrclark]

3 minutes ago, lancer425 said:

I don’t think anybody is / will be CLAMOURING to see any  Aviation companies go bust. But i also think the bail out tab being picked up by the tax payers of this country is getting old.

There has to be a balance somewhere and The aviation companies need to start taking responsibility for how they operate. Dane gelt was a bad idea in 800Ad and its still the same today.

There is a balance to be struck for sure.  I think bailout is perhaps used a bit disingenuously at times, Branson for example was asking for a loan at commercial terms from the government, not a grant or handout as such.

The circumstance just now is also exceptional.

[JohnfromUK]

3 minutes ago, grrclark said:

Branson for example was asking for a loan at commercial terms

For some reason none of the 'commercial' lenders apparently will offer it - which suggests that they see the risk as too high - in which case - it probably actually ceases to be 'commercial terms'.

It is alledged (and I have no idea if it is true) that Branson has largely operated from tax havens - and so paid limited UK tax - which is why he is having trouble getting help now.

[AVB]

21 minutes ago, JohnfromUK said:

For some reason none of the 'commercial' lenders apparently will offer it - which suggests that they see the risk as too high - in which case - it probably actually ceases to be 'commercial terms'.

It is alledged (and I have no idea if it is true) that Branson has largely operated from tax havens - and so paid limited UK tax - which is why he is having trouble getting help now.

Branson as a shareholder lives in a tax haven but Virgin Atlantic is a UK registered company and pays UK taxes. Many companies have shareholders who live overseas. 

[grrclark]

1 hour ago, JohnfromUK said:

For some reason none of the 'commercial' lenders apparently will offer it - which suggests that they see the risk as too high - in which case - it probably actually ceases to be 'commercial terms'.

It is alledged (and I have no idea if it is true) that Branson has largely operated from tax havens - and so paid limited UK tax - which is why he is having trouble getting help now.

As AVB suggests RB as an individual may live outside the UK so has limited personal tax liabilities in the UK, but Virgin Atlantic and his other UK enterprises don’t offshore profit to dodge tax, they pay corporation tax and employees pay income tax. A net contribution so genuine wealth creation.

Why should a business be penalised from government lending, that is available to others, because a shareholder is a UK non dom?

As for commercial terms, that means interest bearing in line with the market rate, i.e. it’s not a grant.  Of course the government might be being asked as other factors preclude lending from a commercial bank, i genuinely don’t know what the truth is in this case.

[JohnfromUK]

8 minutes ago, grrclark said:

Why should a business be penalised from government lending, that is available to others, because a shareholder is a UK non dom?

It shouldn't - not for that reason anyway.  My guess is that people won't lend money because they suspect that 'after the Covid event is over', there will not be an immediate rosy future for aviation, and so some companies may not survive.  I have no idea how good Virgin's financial position is compared to other rival operators, but it has been suggested that British Airways are in one of the stronger positions, and they are a big rival ........