Two Coffs flights secured as Virgin collapses
VIRGIN Australia has collapsed under a $5 billion debt pile and coronavirus travel restrictions after frantic negotiations failed to secure an 11th hour buyout.
The company was placed in voluntary administration and appointed Deloitte to try to save Australia's second-largest airline.
The company was put in a trading halt last Tuesday before moving into a voluntary suspension two days later.
It's still uncertain what the move will mean for the company's 10,000 employees, creditors, frequent flyers and customers holding tickets.
Deloitte administrators Vaughan Strawberry, John Greig and Richard Hughes will keep the airline flying and seek a path to viability after shedding debt and attempting to find new owners.
It followed a series of crisis talks on a day that started with a glimmer of hope on Monday as Queensland and NSW looked set to enter a bidding war to secure the company's headquarters and 5000 employees currently based at Bowen Hills.
Virgin had been seeking a $1.4 billion bailout from the Federal Government, with chief executive Paul Scurrah warning of "catastrophic" outcomes if the airline failed.
But the Government, which has committed almost $1.3 billion to the aviation industry during the coronavirus pandemic, refused to give Virgin a blank cheque from taxpayers.
In a joint statement issued this afternoon Treasurer Josh Frydenberg and Deputy Prime Minister Michael McCormack acknowledged the tough times being faced by Virgin staff, the company's suppliers and the general aviation industry.
"The Australian Government has and will continue to support the industry through our various initiatives which to date have seen more than $1.2 billion committed to maintaining operations across the sector and supporting jobs.
"This investment comes on top of the $130 billion JobKeeper package, which continues to be available to Virgin employees at this time.
"The Government remains committed to two commercially viable airlines operating domestically across Australia.
"This is important for competition and the Australian economy. We will ensure the ACCC strongly enforces competition laws so airlines are able to compete effectively as the industry rebuilds.
In light of Virgin Australia's announcement, the Federal Government has appointed Nicholas Moore, former Macquarie Group CEO, to lead its engagement with the administrator.
The government's preference continues to be for a market-led solution.
"Our objective is to help keep as many employees as possible in their jobs, a second major domestic airline in the sky, prices down and competition maintained so our economy recovers strongly on the other side of the coronavirus pandemic," the ministers stated.
Qantas flights between Coffs Harbour and Sydney have been locked in for at least the next eight weeks as part of the $165 million deal by the Australian Government to underwrite the cost of Qantas and Virgin's minimum domestic network.
Two return Qantas flights to Sydney will be available from Coffs Harbour Airport.
"It's great to see a couple of flights maintained between Coffs Harbour and Sydney during this challenging time for essential travel," Federal Member for Cowper Pat Conaghan said.
"I hope to see flights from Port Macquarie to Sydney again soon."
These minimum domestic air travel arrangements will last for the initial eight weeks with a review mechanism in place, where the government will continue to monitor the market and determine if further action is required.