Virgin Australia declared bankruptcy last night, hoping to find new funds after the Australian government refused aid. In Britain, Virgin Atlantic boss Richard Branson once again pleaded for a repayable state loan.
Read Also: COVID-19: 1,500 to 2,000 jobs cut at KLM
The second-largest carrier in Australia behind Qantas, Virgin Australia did not resist the impact of the COVID-19 pandemic: it announced this April 21, 2020, to the stock market authorities its cessation of payments, with the appointment of court administrators at stake. Indebted to about five billion Australian dollars, she had asked the authorities for a loan of about 1.4 billion Australian dollars (820 million euros), which the government had refused. « Our decision is to secure the future of the Virgin Australia Group and its rebirth after the COVID-19 crisis, » CEO Paul Scurrah said in a statement. Australia « needs a second airline and we are determined to continue our flights, » he added.
Director Vaughan Strawbridge said, « Our intention is to undertake a process of restructuring and refinancing the business, and to remove it from the current situation as soon as possible. » « Interest searches » have been launched with the parties to help « recapitalize the business and its future », and he said there have been « several expressions of interest so far ». The Velocity Frequent Flyer loyalty program, managed separately, is not affected.
Read Also: CORONAVIRUS COVID-19: big impact on airlines
Virgin Australia will continue to operate « its scheduled international and domestic flights which help transport essential workers, maintain important freight corridors and bring Australians home, » said the Australian company. Its current flight program includes fifteen domestic routes from Brisbane, Melbourne, Perth and Sydney airports; international routes are suspended until June 14. Some 8,000 employees are already partially unemployed.