News
Virgin Australia administrators seek details from government on support for industry
June 12th 2020
Administrators for Virgin Australia (VA) wrote to the Australian government this week to seek a guarantee on ticket sales that will give travellers confidence to book tickets with the carrier while it searches for a new owner, it was reported this week. Read More »
The request was among several measures included in administrator Deloitte's letter to Canberra as the two shortlisted candidates Bain Capital and Cyrus Capital Partners work towards a binding offer to buy VA by the June 22 deadline.
Several local media outlets reported this week the Deloitte letter sought details from the federal government about its intentions for future and ongoing support for the industry.
The administrator also sought assurances VA's takeoff and landing slots were protected and that a government scheme subsidising some domestic routes, due to expire on September 30, be extended to year-end.
Deloitte asked that the government scheme, Jobkeeper, that paid the wages of staff stood down during the coronavirus pandemic, also due to end in September, be continued. Otherwise, scores of VA staff potentially faced redundancy when a potential new owner was taking over the airline.
Transport Workers Union national secretary, Michael Kaine, said: "Qantas is limping along with funding from the federal government while Virgin’s future is entirely up in the air."
VA went into voluntary administration in April with debts of about A$7 billion (US$3.4 billion). Administrators recently narrowed the list of potential buyers to two – Bain Capital and Cyrus Capital Partners.
Australia’s prime minister, Scott Morrison, has been calling for states and territories with closed domestic borders to ease those restrictions to help "get planes flying around Australia". Australia's international border remains closed.
Despite the state border closures, VA announced this week it will double its domestic network by early July, representing an extra 320 flights, or about 30,000 seats a week.
VA group chief commercial officer, John MacLeod, said the capacity boost was in response to demand for air travel returning.
"It’s early days but these services will be a welcome boost to Australia’s tourism industry and help the nation’s economy and aviation sector to rebuild," MacLeod said.
"The services will also give us the opportunity to bring team members back to work, who I know have been looking forward to welcoming and sharing our award-winning customer service."
VA is introducing new sequenced boarding and disembarkation process and health questionnaires passengers must complete before travelling to minimise the risks associated with COVID-19.
