Virgin Australia rescue: more than 10 potential buyers
The airline could become a low-cost domestic carrier
Virgin Australia, Australian second largest carrier after Qantas, could soon find new owners after it was placed into voluntary administration following to the Canberra government's decision that once again excluded it from a bailout plan. Over ten potential aspirants -AVIONEWS reports it- are preparing to make a careful examination of the conditions of the company.
The board of international shareholders of Virgin Australia has appointed four senior officials of the international accounting firm Deloitte as directors, ensuring that the airline will continue to operate its minimum network of domestic and international flights. The carrier, almost at ground since March 25 due to the coronavirus, has seen the cash flow collapsed due to severe travel restrictions and is overburdened with a debt of over $ 3.4 billions.
It has already cut 80% of its direct workforce and has announced a thousand layoffs in the past few weeks.
Paul Scurrah, Virgin's chief executive, said the difficult decision followed nine federal government refusals to as many requests for financial assistance. "The Government has made its intentions clearly and we will make everything possible to get out of this situation with new important owners who will be able to capitalize on the company for as long as necessary". The decision by the Canberra government seems to be linked to the air company's foreign ownership and the need to make loans without adequate guarantees.
The future of the carrier will be decided within two or three months, Vaughan Strawbridge, Deloitte administrator assures, adding that there has already been a response "Extraordinary" by over ten potential international buyers. Treasury Minister Josh Frydenberg acknowledges that the airline has played a very important role, but "the Government does not intend to come to the rescue of five large foreign shareholders who together own 90% of this airline".The Government's expectation appears to be that once Virgin Australia's foreign ownership is extinguished, it will emerge from the voluntary administration as a scaled-down, low-cost domestic carrier when the skies open again post-pandemic.
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