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- Virgin Australia’s (VAH) financial administrator, Deloitte, is pleading that the Australian Government to support the suspended airline
- Deloitte wrote to the Morrison Government on Tuesday for a six-month extension on the ‘JobKeeper’ scheme for 10,000 of the airline’s workers
- Deloitte Partner Vaughan Strawbridge, says the absence of the support from the Government could turn away Virgin’s final two bidders
- A binding bid from either Bain Capital or Cyrus Capital is due by June 22
- Shares in Virgin remain frozen at 8.6 cents, following on from their early April suspension
Virgin Australia’s (VAH) administrator Deloitte, has pressed the Australian Government to extend financial support and keep bidders interested.
Deloitte sent a formal plea to the Government, asking for the ‘JobKeeper’ scheme to extend another six months. This would ensure that 10,000 workers are financially supported.
The administrator of the suspended airline has also asked for a guarantee of tickets to customers, landing spots at major airports, and an extension of subsidised domestic flights.
Part of these demands would ensure that a newly bought Virgin can compete with a healthy Qantas — therefore keeping bidders interested.
The plea comes after Federal support for the country’s COVID-stricken aviation industry came to a halt over the weekend, while the JobKeeper scheme is set to expire in September.
The funding was part of a billion-dollar plan.
Since business was slowed for many airlines, Qantas has notably whittled its number of daily domestic flights down to a minimum.
As the funding scheme ended less than a week ago, Qantas and Jetstar grounded their remaining international routes to save on cash.
The pandemic, however, delivered a crushing blow to Virgin Australia that put the airline into voluntary administration.
Handled by Deloitte, the airline is now picking between two final bidders for the business: Bain Capital and Cyrus Capital Partners.
Bain handles a larger portfolio at A$155 billion annually, while Cyrus Capital founder Stephen Freidheim, is an associate of Virgin co-founder Richard Branson.
Deloitte partner Vaughan Strawbridge, who is heading operations for Virgin Australia, said he was ‘comfortable’ with the sale process staying on course.
“Last night, we wrote to the government asking for clarification of their intentions regarding future and ongoing support for the aviation industry,” he said.
“It’s important the bidders understand levels of government support so they know how to structure their bids,” Vaughan continued.
Despite Strawbridge’s confidence, he said financial uncertainty about being unsupported by the Australian Government could complicate plans for the final bidders.
Legally binding bids for Virgin are due by June 22. Deloitte is then expecting a new owner for the airline in mid-August.
Shares in Virgin Australia froze in early April at 8.6 cents each, and remain suspended from quotation.
