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Virgin Australia goes into voluntary administration
Struggling airline Virgin Australia will go into voluntary administration with its future – and a competitive airline market in Australia – up in the air.
The AFP reports the 10,000 Virgin staff were informed late on Monday as a desperately needed A$1.4 billion bailout from the government wasn’t forthcoming.
The next step is to appoint administrators to find a buyer or restructure debt, which is reportedly about A$5 billion.
Australian media reported Deloitte has been appointed as administrator.
A bailout never came as Virgin is 90% foreign owned and its ‘investors have deep pockets’, according to the treasury department.
At stake is a competitive market with two full-service airlines and the future of thousands of jobs.
"It is a viable and much-needed business and without it Australia will struggle to get its economy back on track once the crisis abates," said Transport Workers Union national secretary Michael Kaine.
Unions and the Australian Competition and Consumer Commission have also warned of the impact of Virgin Australia going bust and leaving Qantas as the only viable option on many routes.
"Australia went into this crisis with two full-service airlines and it’s really important that we come out the other end with two full-service airlines," said ACCC chair Rod Sims.
Queensland and NSW state governments had been competing against each other with cash injections for the Brisbane-based airline, but the reported A$200 million was well short of what it needs just to survive.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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