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Virgin Australia goes into administration
One of Australia’s largest airlines has gone into voluntary administration, leaving 15,000 jobs in limbo as well as leaving Australia with the possibility of having a single domestic carrier.
Virgin Australia goes into administration
One of Australia’s largest airlines has gone into voluntary administration, leaving 15,000 jobs in limbo as well as leaving Australia with the possibility of having a single domestic carrier.
Virgin Australia, who has appointed Deloitte as administrator, previously asked the Morrison government for a $1.4 billion handout to help save the embattled airline.
“Our intention is to undertake a process to restructure and refinance the business and bring it out of administration as soon as possible,” said administrator Vaughan Strawbridge.
“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far.”
Virgin’s business was pummelled by the coronavirus, which has caused precipitous drops in air traffic worldwide.
In a statement to the ASX, Virgin Australia said it was looking to “recapitalise the business and help ensure it is in a stronger position post-COVID-19 pandemic”.
“The decision comes as the group has continued to seek financial assistance from a number of parties, including state and federal governments, to help it through the unprecedented crisis, however is yet to secure the required support,” the statement continued.
The airline has committed to continue to operate its scheduled international and domestic flights that are helping to transport essential workers, maintain important freight corridors and return Australians home.
Virgin Australia Group chief executive officer Paul Scurrah said: “Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis.
“In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry. We employ more than 10,000 people and a further 6,000 indirectly, fly to 41 destinations, including major cities and regional communities, have more than 10 million members of our Velocity loyalty program, and contribute around $11 billion to the Australian economy every year,” said Mr Scurrah.
“Australia needs a second airline, and we are determined to keep flying. Virgin Australia will play a vital role in getting the Australian economy back on its feet after the COVID-19 pandemic by ensuring the country has access to competitive and high-quality air travel.”
Virgin has previously stood down 80 per cent of its workforce, as well as making 1,000 redundancies to help lower the cost of business.
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