Buckle your seat belts. We’re in for a bumpy ride! Virgin Australia has crashed into voluntary administration as it loses its battle against massive debts and the impact of Coronavirus travel shutdown.
The second most prominent airline in Australia has already appointed Deloitte to manage potential restructuring options, ass reported in SMH. The accounting firm will most likely run the administration process and is expected to look at ways to keep the airline from a crash ‘n burn situation.
The Board of directors of Virgin Australia met today and a knowledgable source has said that the board has given the go-ahead and the official administration announcement is inevitable.
The airline has an enormous debt of around $5-billion and its negative situation was exacerbated by the COVID-19 travel ban.
No To A Loan
Virgin Australia has previously asked the federal government for a $1.4 billion loan, but its request was denied, with Prime Minister Scott Morrison saying he did not want to ‘get in the way of a commercial resolution’.
NSW Vs QLD
Meanwhile, both NSW and Queensland governments have offered assistance to the beleaguered airline, with strings attached of course.
New South Wales has offered short-term funding if the airline agreed to relocate to the new airport in Sydney’s West.
The Queensland government has offered $200-million as long as the airline kept its headquarters in Brisbane.
Virgin Australia has suspended all but one domestic route, stood down 8,000 workers and had its credit rating downgraded.
Virgin employs about 10,000 people directly and supports another 6000 jobs indirectly.
Watch this (air) space…
Do you have any flights booked with Virgin Australia? Tell us in the comments below.