AUSTRALIA. Virgin Australia has entered voluntary administration and is seeking a buyer or investors to help it survive the COVID-19 crisis. Australia’s second largest airline (after Qantas) has sought financial assistance from State and Federal Governments, but so far without success.
Virgin Australia will continue to operate its scheduled international and domestic flights which are helping to transport essential workers, maintain freight corridors and return Australians home.
CEO Paul Scurrah said: “Australia needs a second airline and we are determined to keep flying.”
He added: “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 programme, and contribute around A$11 billion to the Australian economy every year.”
The company said that the COVID-19 pandemic came as the group was progressing on a “significant transformation programme” to reset its cost base including consolidating its workforce, simplifying the fleet, withdrawing from unprofitable routes and reviewing and renegotiating supplier agreements.
Yesterday, Virgin Group Founder Richard Branson said: “Over the five decades I have been in business, this is the most challenging time we have ever faced.”
He said that Virgin Atlantic would require government assistance in the form of a commercial loan to survive, but this has yet to be agreed.
Branson said: “Together with the team at Virgin Atlantic, we will do everything we can to keep the airline going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.”
Branson said he would use his private island in the Caribbean as collateral to raise money to save other group interests. “As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the group,” he said.
