With aviation at a near-standstill globally, Virgin Australia has called in the administrators. But Sir Richard Branson has pledged to the staff of his Australian airline venture: “We are determined to see Virgin Australia back up and running soon.”
When the coronavirus pandemic began, the debt-ridden carrier was in fairly poor shape. As passenger numbers collapsed, the airline asked the Australian government for a A$1.4bn (£715m) bail-out.
Now the airline has entered voluntary administration.
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The airline is continuing to fly a limited schedule as it seeks fresh investment.
The administrator, Vaughan Strawbridge of Deloitte, vowed “to restructure and re-finance the business and bring it out of administration as soon as possible.”
“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far,” he said.
The chief executive, Paul Scurrah, said: “Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the Covid-19 crisis.
“We employ more than 10,000 people and a further 6,000 indirectly, fly to 41 destinations including major cities and regional communities, have more than 10 million members of our Velocity loyalty program, and contribute around $11bn [£5.6bn] to the Australian economy every year.”
Sir Richard, who founded the airline in 2000, wrote to staff to say: “I know how devastating the news today will be to you all.
“In most countries federal governments have stepped in, in this unprecedented crisis for aviation, to help their airlines. Sadly, that has not happened in Australia.”
In a swipe at Qantas, the national carrier and dominant airline in Australia, the Virgin founder said: “Never one to give up, I want to assure all of you – and our competitor – that we are determined to see Virgin Australia back up and running soon.
“We will work with Virgin Australia’s administrators and management team, with investors and with government to make this happen and create a stronger business.
“This is not the end for Virgin Australia, but I believe a new beginning. I promise that we will work day and night to turn this into reality.”
Sir Richard’s Virgin Group now owns just over one-10th of Virgin Australia. Larger investors include Etihad, the Abu-Dhabi based airline; HNA of China; and Singapore Airlines.
Virgin Australia’s loyalty scheme, Velocity Frequent Flyer, is a separate company and is not in administration.