Virgin Australia’s administrators have urged the federal government to provide more financial certainty for the airline, or risk its two remaining suitors walking away.
The administrators have specifically sought clarity on the future of the JobKeeper scheme, which is set to dry up from 27 September, as well as a guarantee on Virgin’s ticket sales, according to The Australian Financial Review.
Furthermore, The Australian reported that Deloitte is seeking protection of certain landing slots at Aussie airports for 12 months, an extension of subsidised domestic flights until December, a commitment to more federal government patronage on Virgin flights, and a guarantee that the Australian Competition and Consumer Commission will monitor Qantas’ moves closely following the airline’s sale.
According to both media reports, the administrators warned the government that the two remaining bidders – Bain Capital and Cyrus Capital Partners – for Virgin could fail to submit binding offers by the newly-extended deadline of 22 June if it couldn’t provide these financial assurances.
In a statement to Travel Weekly, Deloitte’s Vaughan Strawbridge confirmed the administrators wrote to the government last night asking for clarification of their intentions regarding future and ongoing support for the aviation industry.
“It’s important the bidders understand levels of government support so they know how to structure their bids,” he said.
Strawbridge also noted the administrators were “entirely comfortable with the process we have in place and the sale we are pursuing”.
However, it appears the government isn’t willing to grant the administrators’ wishes, particularly regarding JobKeeper, with Prime Minister Scott Morrison saying the best course of action for Virgin would be more domestic flights.
“If we’re concerned about Virgin employees … it is very important that we open up the domestic borders in this country,” he said, as reported by the AFR.
“We need to get planes flying around Australia, and if you want to see planes flying around Australia … we need to open up these domestic borders.”
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