Virgin Australia enters administration

Virgin Australia has entered voluntary administration, but says it will continue to operate its scheduled international and domestic flights. The decision comes after the airline, reported to have about $5 billion in debt, sought financial assistance from a number of parties, including State and Federal Governments, to help it through the COVID-19 crisis. The Federal Government said today it remained committed to two commercially viable airlines operating domestically across Australia and would ensure the ACCC strongly enforced competition laws so airlines were able to compete effectively as the industry rebuilds. "In light of Virgin Australia’s announcement today, the Government has appointed Mr Nicholas Moore, former Macquarie Group CEO, to lead our engagement with the administrator. The Government’s preference continues to be for a market-led solution," Minister for Infrastructure, Transport and Regional Development Michael McCormack said. The group’s Board of Directors has appointed Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes of Deloitte as voluntary administrators of the company and a number of its subsidiaries. Mr Strawbridge, said: “Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible." Virgin Australia chief executive officer Paul Scurrah said the decision to enter administration was aimed at securing the future of the group and emerging on the other side of the COVID-19 crisis. “In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry. 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 $11 billion to the Australian economy every year,” Mr Scurrah said. “Australia needs a second airline and we are determined to keep flying. Virgin Australia will play a vital role in getting the Australian economy back on its feet after the COVID-19 pandemic by ensuring the country has access to competitive and high-quality air travel.” Meanwhile Regional Express (Rex) airlines today signed a Commonwealth Grant Agreement under the COVID-19 Regional Airline Network Support (RANS) program announced on March 28. Under the Federal Government program, regional airline carriers receive assistance to maintain a minimal weekly schedule to regional and remote ports. Under the agreement, Rex will receive funding to operate 1-2 return services a week to most destinations on its network. Queensland is among three State Governments which have also committed to funding additional services on top of what the Federal Governmentpackage is providing. https://www.i-q.net.au/main/eleventh-hour-reprieve-for-rex-regional-air-services https://www.i-q.net.au/main/lifeline-for-qantas-and-virgin-services

Virgin Australia enters administration

Industry Queensland

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