Desperate Virgin Australia is asking the federal government for support to dispel the coronavirus crisis
Virgin Australia’s desperate CEO is pleading with the government for $ 1.4 billion to stay afloat and avoid an “aviation monopoly” – as experts warn the company could fall over the next 100 days
- Virgin Australia asks for $ 1.4 billion in taxpayer money to stay afloat
- The airline had grounded 125 aircraft and employed 8,000 employees due to COVID-19
- CEO Paul Scurrah said the company’s collapse would create an airline monopoly
Virgin Australia warns that the country could face an airline monopoly if forced to fold due to the coronavirus pandemic.
The airline asks the federal government for financial support to help the company clear the uncertainty associated with COVID-19 until commercial activities return to normal.
Virgin Australia CEO Paul Scurrah insists it’s not a helping hand.
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Virgin Australia warns the country could get an airline monopoly if they are to fold due to the corona virus pandemic
“We are not looking for a rescue plan,” he told The Australian.
“We are looking for a hand-up, to help overcome the crisis. Trust is very important to airlines. ‘
Virgin Australia wants the federal government to make a “statement of trust” in the same way that it can help a bank.
The price tag to keep the airline operating is $ 1.4 billion and they’re looking for that from tax money.
Virgin Australia CEO Paul Scurrah (pictured) said the company’s collapse would create airline monopoly
Scurrah said the future of the carrier’s 9,500 employees depended on government support.
“The federal government wants to get out of this crisis with two airlines,” he said.
“And it won’t get without us. We all know what would happen if there was a monopoly. ‘
He said that Virgin Australia currently has approximately $ 800 million in cash reserves.
Fitch Ratings Analyst confirmed that the company only has about three months to have enough money to continue working, Fitch reports the Australian.
“When it comes to government-imposed aviation shutdown … They have a little more time than that – a few more months,” she said.
Prime Minister Scott Morrison questioned the prospect of a rescue plan for the airline last week, following Virgin’s original request
The airline’s major shareholders are all internationally owned – including Singapore Airines, Etihad Airways and two Chinese investors – the HNA group and Nanshan.
Australian shareholders make up about 9 percent of the company’s investors through listing on the Australian Stock Exchange.
Under the plan, the government would take an ownership interest in Virgin if the airline were unable to repay its debt within three years.
Prime Minister Scott Morrison questioned the prospect of a rescue plan for the airline last week, following Virgin’s original request.
“I can only point to the decisions the government has made and those decisions have been made across the industry,” he said.
Following Virgin’s initial request, rival Qantas placed a $ 4.2 billion price tag on the aid it would need if targeted rescue operations were to be provided.
The airline grounded 125 aircraft and stopped 8,000 employees from COVID-19
Virgin Australia asks for $ 1.4 billion in taxpayers’ money to support itself and restore operations to its 8,000 employees when COVID-19 restrictions are lifted