Find out why Virgin Australia still needs government help

You might remember an article we wrote a few weeks back on Virgin Australia. The Queensland Government was considering buying into the airline as they went into voluntary administration. You can read that here. Well, we have an update.

Until recently, there were still international flights into Australia. These flights were designed to bring Australian Citizens who were stranded overseas home. They were government-funded. On Monday, Virgin Australia and Qantas grounded their remaining international flight’s as the funding came to an end. 

It’s been heavily publicised that the government won’t give bailouts to any individual airline after Virgin Australia asked for a $1.4 billion bailout. But that has not stopped the company from trying to get some more cash as the administration process continues.

It’s been revealed this week by the ABC that Virgin Australia administrators, Deloitte Australia have written a letter to the federal government urging for support.

Reportedly, that the letter to the federal government stated there are two strong bidders to purchase the company, however, they are worried about the future of the aviation industry and this may halt the sale.

What does Virgin Australia want?

It’s further reported that Deloitte is asking for two things from the government:

  1. A government guarantee on all ticket purchases. This will likely make customers feel more comfortable booking a flight with the airline (The federal government will refund the ticket cost)
  2. The government extend the JobKeeper program for an extra 6 months for their 10,000 strong workforce. Of note, employees are one of the largest creditors for Virgin Australia. They’re owed about $451 million. 

The airline industry is only one of many that have been effectively closed as a result of Coronavirus. If the government should bail out individual companies remains a controversial topic, and currently, there has been no official response to Virgin Australia’s request. The future of the company remains uncertain and final bids for the airline are due by the 22nd of June 2020.

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