Virgin Australia Holdings (Virgin Australia) has called in Vaughan Strawbridge of Deloitte to act as administrator for Australia’s second-largest airline which has accrued debts of AU$5 billion (US$3.15 billion). Having failed to operate profitably for the last seven years and the impact of the COVID-19 pandemic, failing to obtain a bailout loan of AU$1.4 billion from the Australian government, has proved to have send the airline into administration.
While the carrier continues to fly a skeleton schedule, over ten individual parties have expressed an interest in recapitalizing the carrier. “Generally, you get the best outcome where you sell it as a whole, so that is definitely the preferred approach,” Strawbridge told reporters on a teleconference, while, according to Reuters news agency, Australian private equity group BGH Capital is among the interested parties, but declined to comment when questioned.
Treasurer Josh Frydenberg told media at a separate briefing that the government has appointed Nicholas Moore, who for a decade led investment bank Macquarie Group, to engage with the administrator to find a “market-led solution” with a view to keeping two airlines on key routes.
Strawbridge said the airline was also seeking talks with Boeing about the future of its order for 40 737 MAX planes. The carrier employs over 10,000 staff directly and 6,000 people indirectly and its main rival, Qantas would now have a virtual monopoly if Virgin Australia ceased all operations. Shares in Qantas jumped 7.2% at one point on Aprils 21, before settling at an increased 3%.
Virgin Atlantic is part owned by Etihad Airways, Singapore Airlines, Nanshan Group, HNA Group and Virgin Group.Email Post to a Friend