Queensland government hands Virgin $200m lifeline (but there are strings attached)
The Queensland government has called upon the federal government and other states to support Virgin Australia, as speculation continues to swirl around its future.
Queensland’s Minister for State Development Cameron Dick said it was imperative Australia has two airlines to support tourism, jobs and regional investment.
“Queensland has given Australia both our national airlines – we won’t let them go, or let thousands of families watch their jobs go, without a fight,” he said.
“The Queensland government is ready to do its bit to support, offering $200 million towards a national support package to help get Virgin get back in the skies.
“But we can’t do it alone, and nor should we, because all parts of Australia benefit from two national airlines.”
Dick urged the federal government to lead a national effort to keep Virgin flying.
“We also want to keep the air fair. We know that it can cost up to 25 per cent more to fly on single-carrier routes, and we want to avoid that at all costs, when we emerge from this crisis,” he said.
Dick said Queensland government support was conditional on federal government backing, debt restructuring, shareholders and bond holders doing their bit, headquarters remaining in Brisbane, and ongoing regional flights.
“We know other investors are looking at Virgin too,” he said.
“Our message to potential investors is that we are prepared to put money on the line to keep a national carrier based in Queensland.”
The Transport Workers’ Union has echoed the Queensland government’s call for other state and federal governments to financially assist Virgin, with national secretary Michael Kaine saying now is the time for them to decide on the struggling airline’s fate.
“The choice is to save 16,000 jobs and it is about whether to consign Australia to a monopoly by one airline, which will mean the country will struggle to get back on its feet,” Kaine said.
“We welcome the announcement by the Queensland state government, and we urge the NSW and Victorian premiers and the federal government to follow suit.
“Virgin workers need certainty about their futures and the travelling public needs assurances that our economy will not be allowed to fall apart.”
Virgin CEO Paul Scurrah joined trade unions and industry experts in a roundtable discussion on Friday about the future of Australia’s aviation industry, and once again called for Qantas to “put rivalry aside”.
Scurrah has already complained to ASIC and the ACCC about Alan Joyce’s comments on what Virgin deserves in terms of government support.
Qantas and the federal government declined invitations to join the roundtable, according to the TWU.
The wait continues
Virgin has been in a trading halt on the ASX since last Tuesday, having extended the pause on Thursday to buy some more time for either the government or outside investors to come to the rescue.
The company originally proposed a $1.4 billion bailout from the government to help survive the impact of COVID-19.
However, given $165 million worth of funding has just been allocated to help keep Virgin and Qantas flying domestically, on top of the $715 million relief package for Aussie airlines announced last month, as well as a $300 million lifeline for the regional aviation sector, it seems unlikely that the government will offer specific financial support to Virgin.
Also, if the recent comments of Prime Minister Scott Morrison, Deputy Prime Minister Michael McCormack and Treasurer Josh Frydenberg are anything to go by, the government would prefer Virgin be saved by private investors.
Two companies that are continually being speculated as potentially lining up a play for the airline are Bain Capital and BGH Capital.
Right now, voluntary administration seems the most likely outcome for Virgin. It’s major shareholders – Etihad Airways, Singapore Airlines, Nanshan Group and HNA Group – have passed up the opportunity to provide an equity injection, according to media reports.
Richard Branson’s Virgin Group, which owns just over 10 per cent of Virgin Australia, still appears to be undecided as to whether it will help out.
And to make matters worse for Virgin, credit rating agencies Moody’s and Fitch have just issued downgrades for the airline.
In any case, we should have a clearer picture by Thursday.
Featured image credit: iStock/Andrew Hanlon
Email the Travel Weekly team at traveldesk@travelweekly.com.au
Cameron Dick federal government Michael Kaine Paul Scurrah Queensland government Transport Workers Union twu virgin virgin australiaLatest News
The Walshe Group Announces Two Key Appointments
What we really want to know is whether they got joint or separate welcome parties.
FAMIL: Agents explore the delights of Mauritius on 7-day tour
Go green with envy as you read this fabulous itinerary! Time to book that second honeymoon.
Hamad International recognised as world’s best airport at 2024 Skytrax World Airport Awards
Hamad airport is so good it is almost considered a destination in itself. Ballina, up your game.
Saudi Arabia highlights tourism investment opportunities at global investment event
Now is the time to start looking at Saudi Arabia if you are not already. There's big things to come.
“Rampant” – Aussies warned as dengue fever cases spike in Bali
Worried about Bali belly? Now you have something else to worry about.
TTC Tour Brand reveals slew of deals across operators including Trafalgar and Contiki
Everybody loves a bargain and you could do lot a lot worse than check out these deals from TTC!
Fiji Airways partners with Porter Airlines in US growth bid
Any initiative that gets more people visiting the delights of Fiji is a good initiative.
Flight Centre launches CruiseHQ – a marketplace exclusively for agents
The cruise industry has surpassed pre-Covid levels so this isn't one to miss!
Feeling festive? Wendy Wu tours unwraps Christmas collection
Get the Christmas hols booked now and avoid spending it with that elderly relative with dubious political views.
OPINION: In a world of screens, we crave experience
If you get feelings of deep shame and regret when you see your screen time, don't worry - you're not alone.
Sun Princess: High-end dining and world class entertainment awaits
If you are a foodie and you are not currently on the Sun Princess, we really have to ask - what are you doing?
YouGov: 2 in 5 Aussies would pay more for a sustainable hotel
If you want to be REALLY sustainable you can go camping. You just might lose the will to live.
“Can planes swim?” – Planes become boats as Dubai Airport is savaged by severe storm
Unfortunately, "can planes swim?" is a real life question and not an opener to a really bad joke...
Explora journeys reveals bespoke outdoor furniture designed by Matteo Nunziati
This is making your plastic table and chairs look really bad now, isn't it?
Bangkok Airways targets growth with renewed Sabre deal
Two stories abut Sabre's growth in one week and its only Wednesday! Watchout world.
PR agency Example wins pitch for InterContinental Sydney
We also went in for the contract but they said that a 'Be Our Guest'- themed TikTok was unoriginal! The cheek.
Norwegian Cruise Line reveals culinary experience aboard Norwegian Aqua
Once again, this TW journalist REALLY regrets writing this before getting lunch.
Signature Queensland hosts luxury tourism event
Known for its tropical beaches and unique wildlife, Queensland also offers luxury.
Capella Sydney recognised in prestigious Travel + Leisure’s 2024 ‘it list’ of best new hotels
You know that 'it girl' at school who everyone wanted to hang out with? Capella is the hotel version of that.
Rex launches 72-hour fare sale with NO school holiday blackout so you can take your kids (if you want to)
Sadly, leaving your children at home whilst you go on holiday is generally frowned upon.
Adventure World offers chance to connect with “heart and soul” of the US
I mean who hasn't dreamed of a road trip around the US?! Go with Adventure World and you're less likely to get lost.
Fiji’s family-owned luxury resort Likuliku Lagoon launches its own app
We were relieved to find out that having a "concierge in your pocket" referred to an app on your phone.
Hawaii: The US’ laid-back front door for Australians
If you needed another sign that you should definitely head to Hawaii - this is it!
Sabre targets Asia Pacific growth with latest hire
Call the Avengers! Sabre continues its bid for world domination with latest hire.
Air New Zealand signs its largest EVER deal for sustainable aviation fuel
Air New Zealand makes huge step towards sustainable travel. We bet it recycles its rubbish properly too.
IHG Hotels & Resorts continues regional growth with Sunshine Coast Holiday Inn
This Holiday Inn looks considerably flashier than some of the ones we have stayed at in our time.
Budget carrier Scoot welcomes first of 9 E190-E2 aircrafts
Here at TW we would like to offer Embraer E190-E2 a warm welcome! It's not easy being the first of the fleet.
Singapore Airlines grows group passenger traffic by 13.9% for March
This is one of the few situations where an increase in traffic is a good thing.
Number of Aussies going on cruises beats pre-pandemic levels
To be honest, if being stuck inside for two years doesn't give you the travel bug, then nothing will.
Vietjet slashes prices on flights across Vietnam, India & Australia
You can now fly to Vietnam for less money than a night out in Sydney or Melbourne. Time to reconsider the budget.
The Australian Hotels Association (WA) names accommodation excellence award winners
Think blowing up the airbed for your mate qualifies as accommodation excellence? Think again.
Abercrombie & Kent launches Peruvian riverboat tour
If you think being left at a port is scary? Imagine being stuck in the Amazon.
Club Med Bali reveals last-minute group travel deal
If you haven't frolicked across a beach in Bali with your colleagues have you even lived?
Regent Seven Seas Cruises grows sales team across Australia & New Zealand
It is only Monday and Regent Seven Seas Cruises is already announcing hires. Great stuff!
Out of the Ordinary Outback offers caravanners and campers a free night
It's the perfect getaway if your neighbours are starting to drive you a little insane.
Luxury Escapes reveals third signature series tour with Miguel Maestre
We would recommend reading this after lunch, otherwise you risk slobbering at your desk.