Virgin Australia to enter voluntary administration
Australia’s second largest airline, Virgin Australia, is expected to enter voluntary administration later today following a failure to secure a bailout from the Australian government.
The airline has been in talks with the Australian government in a bid to secure a $1.4bn AUD loan. Scott Morrison, the Australian prime minister, urged Australian pension funds to invest in the airline rather than provide a state loan.
Trade unions argue that Australia will struggle to repair its economy following COVID-19 without a second major airline.
An announcement will be made to Virgin Australia’s 16,000 employees by Paul Scurrah, the airline’s chief executive, on Tuesday morning to discuss the future of the airline.
If Virgin Australia collapses, it will leave the largest airline, Qantas to dominate the country and may result in increased fares, reduced services and lack of competition. Qantas has recently come under fire by for failing to protect its employees against COVID-19.
Richard Branson who owns a 10% stake in the airline has received criticism for not offering to bailout the airline despite having a £3.5bn net worth.
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