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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.

    • Kim

      says:

      Well said, Josh. Many years ago when I was travelling Qantas Business class for work, I and my family took holiday (Y) class airfares with Ansett. We were better treated by Ansett staff from check-in to stepping out of the terminal, than by Qantas staff who have, and still have, the idea that they are not there to serve. Long live Virgin – their Premium Economy is the best I have experienced!

    • Nik

      says:

      Josh I was thinking the same thing. Talk about hypocrisy. I wonder how Qantas would be going if they had started from the same position as Virgin and Virgin was the one who had all the said government advantages coupled with increasing market share to an essential monopoly after Annset’s collapse.

      It is in the best interest of all Australians for there to be a competitor to Qantas, because as we know, Qantas doesn’t give a toss about the public. History has shown that they will inflate their ticket prices in a heart beat if they could.

    • Ben

      says:

      Yeah and you don’t even need to look that far back to discover AJ went cap-in-hand to the Feds in 2014 when QF announced that massive loss. He seems to have forgotten that. I don’t necessarily agree with Governments giving handouts to individual companies, but QF has had it’s fair share so can hardly carry on the way they currently are…

    • Rocket

      says:

      @ JOSH, your comment is not correct.
      Qantas was starved of capital for its entire existence in government ownership. Yes, TAA was owned by the government but any advantage from that was offset by the fact Qantas had to dig deep and pay $400M out of cash reserves and loan to buy TN. It then had to pay off that debt.
      The Commonwealth put its hand out for a dividend every year from 1947 to 1995 and in that entire time, except for a modest injection at BA’s insistence having paid a premium for their shares, it received from the Commonwealth a total of 167M in capital in 47 years and 80M of that was in 1984 to fund the purchase of the 747-300s and first lot of 767s. Everything else it had to do itself.
      TAA doesn’t count as it ceased to exist and was bought out by Qantas.
      VA should NOT be bailed out after being mismanaged without QF being given the same consideration to emerge in the fit state it entered this in.

  • ALAN

    says:

    TRUST JOYCDE TO BE THE TYPICAL ARESHOLE HE IS!! SO PETTY AND VINDICTIVE. HATES THE COMPETITION.
    WHY DOES HE NOT GET A LIFE AND LOOK AFTER HIS OWN INTERESTS INSTEAD OF POKING HIS SHITTY NOSE IN VIRGIN’S BUSINESS!!

  • Again your correspondent misses critical Points. The Virgin shareholders include 2 Chinese shareholders in the order of 47% which are Hainan which is owned by the Communist Party of China and Nanshan which is a private building products company with minor aviation interests. It is on the public record that Hainan/CPC have been told to get out of the airline sector by the Government.
    If Australia lends one cent to Virgin it must be against enforceable Directors and shareholders guarantees and if the transfer of ownership option was to be taken it should be for 49% with a “golden share” held in trust by an Australian bank.
    My prediction is that none of the shareholders would step up.
    Singapore Airlines has just borrowed 49 billion from their government with no mention of supporting their shareholding in virgin Australia. Branson has only put money into virgin UK operations. VA is over 90% foreign owned!

  • Red Cee

    says:

    Very interesting. How would Nationalisation go with all the foreign shareholders?

  • Bill O'Really

    says:

    Let the Irish team take over the whole thing and lets run it like Ryan Air. And make sure that $24,000,000 is the minimum salary for the lad at the top. No need for Richard when Al Pal comes to the party, and what a party he can splash too.

  • Ian

    says:

    Apparently Joyce has forgotten his plea for a bailout just a few years ago

  • Salesh Prasad

    says:

    I understand the need to save jobs, but why bail out a foreign owned company. Would the Government bailout one of the foreign owned mining companies, which employs more people than Virgin?
    The Government should look at the possibility of Government buying QF, and having a cap on airfares?
    For example, City Rail is owned and run by NSW Government, (no competition), but NSW rail fares are very reasonable.

  • Craigy

    says:

    @ Josh, that is just silly. You are trying to apply a set of circumstances from another era to today. It just isn’t the same. Before the mid 90s’ Qantas was an international airline only. Its domestic counterpart was TAA who with Ansett, operated under the two airline policy, where no competitors could enter the market. Up until the 80s, they operated the same equipment and similar schedules. Then Ansett replaced the DC9s with B737-200s and ordered the Boeing 767 (with a flight engineer). TAA continued to operate the DC9 and oredered the A300B4. Then both Ansett and Australian operated the B737-300 replacing DC9s and B737-200s.

    In the 90s’ Qantas and Australian were merged and sold off. 25% was sold to British Airways and controlled by the Qantas Sale Act. Between then and now, Compass (1and 2), East West, Ansett and Southern Cross have all gone broke. If you want a level playing field for Qantas and Virgin, get rid of the Qantas Sale Act which would allow Qantas for example to borrow on better terms etc.

    And for the record, Qantas did have competition on international routes to the US, Japan and Hong Kong when Ansett started longhaul services with ex Singapore Airlines B743 and B744 equipment.

  • Christopher Emery

    says:

    Perhaps they should be bailed out in proportion to their taxes paid in Australia over the last 5 years.

  • Bernard Samms

    says:

    You are right there Josh. Also picking up Australia airlines (ex TAA) for $400M was a huge bonus for Qantas. They then had a feed into domestic services. God help us if Virgin goes under, as Mr Joyce will need more accountants to count his money and the public will pay through the nose. It will be years, maybe decades before another airline will popup as a true competitor.

  • BJDUBAUS

    says:

    Dale, Agree with your comments wholeheartedly, although I would add that not just major shareholders, but minor shareholders would absolutely jump at the chance to reduce their VA holdings right now if they weren’t valued at about 1/4 of what the majority of them paid for the stocks!

  • Well said Josh and Kim. To have VA disappear from the scene would be a dream come true for AJ.

  • Jeff Carswell

    says:

    Let Virgin’s owners provide the necessary funds. Australian tax payers should not support a failing poorly managed airline.

  • AlanH

    says:

    I’m no economist but how would a $4.2 billion loan by an airline that is already larger, stronger and in a more privileged position “level the playing field” against a $1.4 billion loan to VA? Despite being foreign-owned, Virgin needs to be rescued if only to prevent Qantas gaining a monopoly. That would be disastrous for Australian RPT aviation. But rather than simply give VA a loan perhaps the Gov’t needs to discuss their current position with its overseas owners.

    • Rocket

      says:

      His point is because they have managed their balance sheet and VA has not, not making any profits for 7 years. His point is why should one company burn its house down and get it rebuilt by the government when the other company looked after theirs and paid their mortgage off early, to use an analogy. I doubt QF want the money as it would upset their shareholders who would lose some of their equity, its the point of why bother saving money, paying cash for aircraft, negotiating hard on leases (VA’s leases on some aircraft are allegedly some of the most expensive), doing proper fuel hedging and saving money only to have your less managed competitor bailed out.

  • Andrew

    says:

    Wish my mortgage went the same was as this ‘offer’ to tax payers…. if everything goes well i will pay back the loan and keep the company, if its goes bad you can have the company*.
    *Oh and by the way i spent your $1.4b….

  • Lucas

    says:

    what’s the point of handing over fists full of cash when the airline is not committed to maintaining jobs? It has just made all Tigerair and NZ based pilots redundant.

  • Mark

    says:

    funny, These capitalists turn socialist real quick….and i bet the won’t pay a cent back when they start to make their millions back!!!

  • Bernhard

    says:

    I hope the govt is making sure it’s getting certain agreements from all airlines it bailouts which benefit the travelling public and regional areas in particular instead of ‘here’s the cash do as you please’ practices the USA did in 2008/9 with banks and car industry and others. This might mean making sure each airline services particular regional areas to ensure a service exists and not just milking the popular routes, so that airlines cover profitable and non-profitable routes. The 747s and a380s should be kept and some routes exited; airlines been talking too long about pilot shortages, well use larger planes to keep costs down instead of smaller planes which ended requiring more crew and maintenance for arguably less overall income. For example don’t have 2or 3 flights going somewhere in a day, use bigger planes to reduce the need for multiple trips. Add in the recent borrowing against planes and where does that leave the airline when planes are overused and worn out and debts still need paying-increased fares, inferior product/service.

  • Peter Orange

    says:

    Certainly think memories are short with QF Management and the public money they received for many many years and they were then gifted the domestic network with the merger to TAA. There are considerable number of jobs at stake – skilled jobs from crew to engineers. Nationalisation is not the answer but assistance certainly is

  • Brad

    says:

    Virgin are foreign owned & those backers (big backers at that) need to step up. QF has got to where it is through good management….Virgin (not a full service carrier) is where they are due to their management. I’ve had many a great Qantas flight & think they’re more than entitled to ask for a fair playing field. I support the national carrier 100%.

  • Craig

    says:

    Every one is forgetting that Qantas was once government owned till the 1990s and forced out rivals now its comoplaining and like other comments it was allowed to swallow up rivals even after virgin arrived just remember Virgin has only asked for a loan history is repeating what happened in England when a major airline had good competition

  • Wayno

    says:

    If Virgin collapses, Qantas and it’s Jetstar subsidiary will have a powerful monopolistic stranglehold on the domestic aviation market in Australia. There will be significant obstacles for another competitor to enter the Australian market, much more so than when Virgin Blue gained a foothold during the demise of Ansett. Mr Joyce is no mug. This pandemic will indeed cause significant short term pain to the Qantas bottom line, but the long term play here is that it provides Qantas with the perfect opportunity to wipe out it’s only real competitor in the domestic market. With Virgin gone Qantas will significantly increase it’s market share overnight, thus providing it significant power to manipulate ticket prices and effectively ‘lock in’ the airlines long term dominance in the domestic market. Hence the strong rhetoric from Qantas to discourage any lifeline investment in Virgin at this time. As a consumer, irrespective of your thoughts around the foreign ownership of Virgin, be careful in giving ANY company the opportunity to put itself in a monopolistic position in such an important industry to this nation.

  • davistev

    says:

    Unbelievable – first the airlines refuse to refund customers their money for cancelled flights, now they want to rob the taxpayer.

    Essentially, they were operating while insolvent if they need future monies to stay open today.

    • Rocket

      says:

      Most of the airfare conditions state the ticket is non-refundable, non-transferable or attracts some sort of penalty for any change, people never read the conditions, they just click through then when they get refused a refund, it’s never their fault, always the airline.

  • Albertina Pettenon

    says:

    We need to come together & help one another, this is so important at this difficult time. We are all in this together. Australians have been using the services with Virgin, Qantas & other airlines so it’s only right that the government helps out to everyone. Together with a loving heart we can move mountains.

    • Rocket

      says:

      Hear, Hear!!!

  • Kurt

    says:

    Joyce is such an arrogant little trumped up twit. He spouts off all this nasty negative comments without engaging his brain before he speaks. I put that down to his “short mans” syndrome. Competition is vital and all QF wants is market domination and to hell with those whose livelihood relies on working for a competitor.

    • Rocket

      says:

      Yes, because he’s highly paid by Qantas’ shareholders to make sure Virgin makes a profit and Qantas gets the bad end of any deal.
      It’s like saying a Defense Attorney shouldn’t criticize the prosecution’s case.

  • Paul R

    says:

    Whilst it is essential we have a competitor remaining in the domestic market when things get back to normal, to give the public a choice of carriers, Virgins long haul international ops are no longer sustainable,
    There are plenty of airlines that will offer the Australian public choice of product and fares for international travel!

  • TD

    says:

    How much bailout do they really need considering the government has already given them (and other operators) exemptions / handouts on some operating costs and if all of their staff (including Tiger) were faithfully kept on as staff as promised and went on the government s keep me follow on payments? How much “bailout” are the overseas owners willing to or are contributing ? It is Australian taxpayers money after all which could have better uses for Australian companies or humanitarian reasons.
    If they do get a bailout ,and they probably will ,then let’s make sure Australians get their “investment ” back as it is to be a loan (to overseas companies) after all.

  • If virgin is allowed to follow Virgin Blue, Compass, Ansett etc, the trade off should be to allow ALL foreign operators to pick up passengers any where in Australia for transport to any where in Australia,for example AIRNIUGINI, CATHAY PACIFIC, SINGAPORE, BRITISH AIRWAYS, Air NewZealand, CAIRNS to BRISBANE and SYDNEY, instead finding no flight Syd to Cns between noon and 4pm.

    • Rocket

      says:

      Absolute rubbish, that’s something that exists no where else in the world. Besides, no interntatonal airline operates domestic sectors anymore and you can’t just have 100s of domestic passengers milling around in international terminals.
      The answer, if VA folds is to offer tax breaks for someone else to come in and take up the place (Ryannair or Air NZ with the Air NZ Express product, the latter would be my preference) or make Qantas divest itself of Jetstar, join it with Rex and nationalise a majority of Qantas so fares can be more easily regulated.
      Every example you gave (except Virgin Blue, which still exists, it’s called Virgin Australia) is ample evidence that without some element of government ownership and some smart regulation, Australia isn’t big enough for two major airlines. It never has been, the closest to us with that situation is Canada and they have 37M people in a country where air travel is essential like ours.

  • Monirul Sheikh

    says:

    QANTAS, the Australian brand is in big trouble. What will happen to it is similar to what happened to HOLDEN. It is time to let go the government share in Qantas and let it compete in int’l market. Let Qantas dictate it terms freehand. But Alan Joyce must go as he is just not the calibre what Qantas need. We need someone who truly understand the global aviation, like the one in Emirates, Tim Clark.

    • Rocket

      says:

      @ MONIRUL.

      You are completely wrong… Qantas is NOT OWNED BY the government, it hasn’t been for 26 years. It is a very strong and very large carrier with a stronger balance sheet and less debt than most of the airlines in the world. Airlines will fail, Qantas will not be one of them.
      Comparing it with Holden is just utter rubbish and shows you don’t know the facts. Holden once it was bought by GM in the 40s was NEVER an Australian company. Qantas has ALWAYS been and was only owned by the government for 45 of it’s 100 years.
      Please do some research and to use Tim Clark, what a complete joke. Emirates is TOTALLY STATE OWNED and is so efficient it’s being bailed out by the UAE. Qantas does not NEED a bailout, it just doesn’t want a poorly managed airline like Virgin get money when it has been mismanaged while Qantas has managed its finances very well, which would be totally unfair.

  • Mick

    says:

    Qantas was seeking Government assistance in 2014. I can’t recall Virgin threatening the Government not to come to their rescue.

    • Rocket

      says:

      No, that was an ambit claim, they wanted the restrictions on the 49% lifted (no more than 49% to be foreign owned, no more than 35% to be owned by foreign companies and no other airline to own more than 25%).
      They got most of what they wanted which was to remove all the restrictions within the 49% foreign ownership cap but the Commonwealth left the 51% ownership cap in place. It also opened the door for Qantas Domestic to be structured so it can be more than 50% foreign owned however I’m not sure that was approved.
      That was all the bail out demand was about, offsetting an alternative they didn’t want to get something they did want.

    • Rocket

      says:

      PS: Qantas’ request also came from Virgin being able to raise unlimited offshore capital as it had just acquired $300M from overseas. Virgin did object to Qantas getting a bail out and that’s why the offshore ownership limits were redrafted.

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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.

    • Kim

      says:

      Well said, Josh. Many years ago when I was travelling Qantas Business class for work, I and my family took holiday (Y) class airfares with Ansett. We were better treated by Ansett staff from check-in to stepping out of the terminal, than by Qantas staff who have, and still have, the idea that they are not there to serve. Long live Virgin – their Premium Economy is the best I have experienced!

    • Nik

      says:

      Josh I was thinking the same thing. Talk about hypocrisy. I wonder how Qantas would be going if they had started from the same position as Virgin and Virgin was the one who had all the said government advantages coupled with increasing market share to an essential monopoly after Annset’s collapse.

      It is in the best interest of all Australians for there to be a competitor to Qantas, because as we know, Qantas doesn’t give a toss about the public. History has shown that they will inflate their ticket prices in a heart beat if they could.

    • Ben

      says:

      Yeah and you don’t even need to look that far back to discover AJ went cap-in-hand to the Feds in 2014 when QF announced that massive loss. He seems to have forgotten that. I don’t necessarily agree with Governments giving handouts to individual companies, but QF has had it’s fair share so can hardly carry on the way they currently are…

    • Rocket

      says:

      @ JOSH, your comment is not correct.
      Qantas was starved of capital for its entire existence in government ownership. Yes, TAA was owned by the government but any advantage from that was offset by the fact Qantas had to dig deep and pay $400M out of cash reserves and loan to buy TN. It then had to pay off that debt.
      The Commonwealth put its hand out for a dividend every year from 1947 to 1995 and in that entire time, except for a modest injection at BA’s insistence having paid a premium for their shares, it received from the Commonwealth a total of 167M in capital in 47 years and 80M of that was in 1984 to fund the purchase of the 747-300s and first lot of 767s. Everything else it had to do itself.
      TAA doesn’t count as it ceased to exist and was bought out by Qantas.
      VA should NOT be bailed out after being mismanaged without QF being given the same consideration to emerge in the fit state it entered this in.

  • ALAN

    says:

    TRUST JOYCDE TO BE THE TYPICAL ARESHOLE HE IS!! SO PETTY AND VINDICTIVE. HATES THE COMPETITION.
    WHY DOES HE NOT GET A LIFE AND LOOK AFTER HIS OWN INTERESTS INSTEAD OF POKING HIS SHITTY NOSE IN VIRGIN’S BUSINESS!!

  • Again your correspondent misses critical Points. The Virgin shareholders include 2 Chinese shareholders in the order of 47% which are Hainan which is owned by the Communist Party of China and Nanshan which is a private building products company with minor aviation interests. It is on the public record that Hainan/CPC have been told to get out of the airline sector by the Government.
    If Australia lends one cent to Virgin it must be against enforceable Directors and shareholders guarantees and if the transfer of ownership option was to be taken it should be for 49% with a “golden share” held in trust by an Australian bank.
    My prediction is that none of the shareholders would step up.
    Singapore Airlines has just borrowed 49 billion from their government with no mention of supporting their shareholding in virgin Australia. Branson has only put money into virgin UK operations. VA is over 90% foreign owned!

  • Red Cee

    says:

    Very interesting. How would Nationalisation go with all the foreign shareholders?

  • Bill O'Really

    says:

    Let the Irish team take over the whole thing and lets run it like Ryan Air. And make sure that $24,000,000 is the minimum salary for the lad at the top. No need for Richard when Al Pal comes to the party, and what a party he can splash too.

  • Ian

    says:

    Apparently Joyce has forgotten his plea for a bailout just a few years ago

  • Salesh Prasad

    says:

    I understand the need to save jobs, but why bail out a foreign owned company. Would the Government bailout one of the foreign owned mining companies, which employs more people than Virgin?
    The Government should look at the possibility of Government buying QF, and having a cap on airfares?
    For example, City Rail is owned and run by NSW Government, (no competition), but NSW rail fares are very reasonable.

  • Craigy

    says:

    @ Josh, that is just silly. You are trying to apply a set of circumstances from another era to today. It just isn’t the same. Before the mid 90s’ Qantas was an international airline only. Its domestic counterpart was TAA who with Ansett, operated under the two airline policy, where no competitors could enter the market. Up until the 80s, they operated the same equipment and similar schedules. Then Ansett replaced the DC9s with B737-200s and ordered the Boeing 767 (with a flight engineer). TAA continued to operate the DC9 and oredered the A300B4. Then both Ansett and Australian operated the B737-300 replacing DC9s and B737-200s.

    In the 90s’ Qantas and Australian were merged and sold off. 25% was sold to British Airways and controlled by the Qantas Sale Act. Between then and now, Compass (1and 2), East West, Ansett and Southern Cross have all gone broke. If you want a level playing field for Qantas and Virgin, get rid of the Qantas Sale Act which would allow Qantas for example to borrow on better terms etc.

    And for the record, Qantas did have competition on international routes to the US, Japan and Hong Kong when Ansett started longhaul services with ex Singapore Airlines B743 and B744 equipment.

  • Christopher Emery

    says:

    Perhaps they should be bailed out in proportion to their taxes paid in Australia over the last 5 years.

  • Bernard Samms

    says:

    You are right there Josh. Also picking up Australia airlines (ex TAA) for $400M was a huge bonus for Qantas. They then had a feed into domestic services. God help us if Virgin goes under, as Mr Joyce will need more accountants to count his money and the public will pay through the nose. It will be years, maybe decades before another airline will popup as a true competitor.

  • BJDUBAUS

    says:

    Dale, Agree with your comments wholeheartedly, although I would add that not just major shareholders, but minor shareholders would absolutely jump at the chance to reduce their VA holdings right now if they weren’t valued at about 1/4 of what the majority of them paid for the stocks!

  • Well said Josh and Kim. To have VA disappear from the scene would be a dream come true for AJ.

  • Jeff Carswell

    says:

    Let Virgin’s owners provide the necessary funds. Australian tax payers should not support a failing poorly managed airline.

  • AlanH

    says:

    I’m no economist but how would a $4.2 billion loan by an airline that is already larger, stronger and in a more privileged position “level the playing field” against a $1.4 billion loan to VA? Despite being foreign-owned, Virgin needs to be rescued if only to prevent Qantas gaining a monopoly. That would be disastrous for Australian RPT aviation. But rather than simply give VA a loan perhaps the Gov’t needs to discuss their current position with its overseas owners.

    • Rocket

      says:

      His point is because they have managed their balance sheet and VA has not, not making any profits for 7 years. His point is why should one company burn its house down and get it rebuilt by the government when the other company looked after theirs and paid their mortgage off early, to use an analogy. I doubt QF want the money as it would upset their shareholders who would lose some of their equity, its the point of why bother saving money, paying cash for aircraft, negotiating hard on leases (VA’s leases on some aircraft are allegedly some of the most expensive), doing proper fuel hedging and saving money only to have your less managed competitor bailed out.

  • Andrew

    says:

    Wish my mortgage went the same was as this ‘offer’ to tax payers…. if everything goes well i will pay back the loan and keep the company, if its goes bad you can have the company*.
    *Oh and by the way i spent your $1.4b….

  • Lucas

    says:

    what’s the point of handing over fists full of cash when the airline is not committed to maintaining jobs? It has just made all Tigerair and NZ based pilots redundant.

  • Mark

    says:

    funny, These capitalists turn socialist real quick….and i bet the won’t pay a cent back when they start to make their millions back!!!

  • Bernhard

    says:

    I hope the govt is making sure it’s getting certain agreements from all airlines it bailouts which benefit the travelling public and regional areas in particular instead of ‘here’s the cash do as you please’ practices the USA did in 2008/9 with banks and car industry and others. This might mean making sure each airline services particular regional areas to ensure a service exists and not just milking the popular routes, so that airlines cover profitable and non-profitable routes. The 747s and a380s should be kept and some routes exited; airlines been talking too long about pilot shortages, well use larger planes to keep costs down instead of smaller planes which ended requiring more crew and maintenance for arguably less overall income. For example don’t have 2or 3 flights going somewhere in a day, use bigger planes to reduce the need for multiple trips. Add in the recent borrowing against planes and where does that leave the airline when planes are overused and worn out and debts still need paying-increased fares, inferior product/service.

  • Peter Orange

    says:

    Certainly think memories are short with QF Management and the public money they received for many many years and they were then gifted the domestic network with the merger to TAA. There are considerable number of jobs at stake – skilled jobs from crew to engineers. Nationalisation is not the answer but assistance certainly is

  • Brad

    says:

    Virgin are foreign owned & those backers (big backers at that) need to step up. QF has got to where it is through good management….Virgin (not a full service carrier) is where they are due to their management. I’ve had many a great Qantas flight & think they’re more than entitled to ask for a fair playing field. I support the national carrier 100%.

  • Craig

    says:

    Every one is forgetting that Qantas was once government owned till the 1990s and forced out rivals now its comoplaining and like other comments it was allowed to swallow up rivals even after virgin arrived just remember Virgin has only asked for a loan history is repeating what happened in England when a major airline had good competition

  • Wayno

    says:

    If Virgin collapses, Qantas and it’s Jetstar subsidiary will have a powerful monopolistic stranglehold on the domestic aviation market in Australia. There will be significant obstacles for another competitor to enter the Australian market, much more so than when Virgin Blue gained a foothold during the demise of Ansett. Mr Joyce is no mug. This pandemic will indeed cause significant short term pain to the Qantas bottom line, but the long term play here is that it provides Qantas with the perfect opportunity to wipe out it’s only real competitor in the domestic market. With Virgin gone Qantas will significantly increase it’s market share overnight, thus providing it significant power to manipulate ticket prices and effectively ‘lock in’ the airlines long term dominance in the domestic market. Hence the strong rhetoric from Qantas to discourage any lifeline investment in Virgin at this time. As a consumer, irrespective of your thoughts around the foreign ownership of Virgin, be careful in giving ANY company the opportunity to put itself in a monopolistic position in such an important industry to this nation.

  • davistev

    says:

    Unbelievable – first the airlines refuse to refund customers their money for cancelled flights, now they want to rob the taxpayer.

    Essentially, they were operating while insolvent if they need future monies to stay open today.

    • Rocket

      says:

      Most of the airfare conditions state the ticket is non-refundable, non-transferable or attracts some sort of penalty for any change, people never read the conditions, they just click through then when they get refused a refund, it’s never their fault, always the airline.

  • Albertina Pettenon

    says:

    We need to come together & help one another, this is so important at this difficult time. We are all in this together. Australians have been using the services with Virgin, Qantas & other airlines so it’s only right that the government helps out to everyone. Together with a loving heart we can move mountains.

    • Rocket

      says:

      Hear, Hear!!!

  • Kurt

    says:

    Joyce is such an arrogant little trumped up twit. He spouts off all this nasty negative comments without engaging his brain before he speaks. I put that down to his “short mans” syndrome. Competition is vital and all QF wants is market domination and to hell with those whose livelihood relies on working for a competitor.

    • Rocket

      says:

      Yes, because he’s highly paid by Qantas’ shareholders to make sure Virgin makes a profit and Qantas gets the bad end of any deal.
      It’s like saying a Defense Attorney shouldn’t criticize the prosecution’s case.

  • Paul R

    says:

    Whilst it is essential we have a competitor remaining in the domestic market when things get back to normal, to give the public a choice of carriers, Virgins long haul international ops are no longer sustainable,
    There are plenty of airlines that will offer the Australian public choice of product and fares for international travel!

  • TD

    says:

    How much bailout do they really need considering the government has already given them (and other operators) exemptions / handouts on some operating costs and if all of their staff (including Tiger) were faithfully kept on as staff as promised and went on the government s keep me follow on payments? How much “bailout” are the overseas owners willing to or are contributing ? It is Australian taxpayers money after all which could have better uses for Australian companies or humanitarian reasons.
    If they do get a bailout ,and they probably will ,then let’s make sure Australians get their “investment ” back as it is to be a loan (to overseas companies) after all.

  • If virgin is allowed to follow Virgin Blue, Compass, Ansett etc, the trade off should be to allow ALL foreign operators to pick up passengers any where in Australia for transport to any where in Australia,for example AIRNIUGINI, CATHAY PACIFIC, SINGAPORE, BRITISH AIRWAYS, Air NewZealand, CAIRNS to BRISBANE and SYDNEY, instead finding no flight Syd to Cns between noon and 4pm.

    • Rocket

      says:

      Absolute rubbish, that’s something that exists no where else in the world. Besides, no interntatonal airline operates domestic sectors anymore and you can’t just have 100s of domestic passengers milling around in international terminals.
      The answer, if VA folds is to offer tax breaks for someone else to come in and take up the place (Ryannair or Air NZ with the Air NZ Express product, the latter would be my preference) or make Qantas divest itself of Jetstar, join it with Rex and nationalise a majority of Qantas so fares can be more easily regulated.
      Every example you gave (except Virgin Blue, which still exists, it’s called Virgin Australia) is ample evidence that without some element of government ownership and some smart regulation, Australia isn’t big enough for two major airlines. It never has been, the closest to us with that situation is Canada and they have 37M people in a country where air travel is essential like ours.

  • Monirul Sheikh

    says:

    QANTAS, the Australian brand is in big trouble. What will happen to it is similar to what happened to HOLDEN. It is time to let go the government share in Qantas and let it compete in int’l market. Let Qantas dictate it terms freehand. But Alan Joyce must go as he is just not the calibre what Qantas need. We need someone who truly understand the global aviation, like the one in Emirates, Tim Clark.

    • Rocket

      says:

      @ MONIRUL.

      You are completely wrong… Qantas is NOT OWNED BY the government, it hasn’t been for 26 years. It is a very strong and very large carrier with a stronger balance sheet and less debt than most of the airlines in the world. Airlines will fail, Qantas will not be one of them.
      Comparing it with Holden is just utter rubbish and shows you don’t know the facts. Holden once it was bought by GM in the 40s was NEVER an Australian company. Qantas has ALWAYS been and was only owned by the government for 45 of it’s 100 years.
      Please do some research and to use Tim Clark, what a complete joke. Emirates is TOTALLY STATE OWNED and is so efficient it’s being bailed out by the UAE. Qantas does not NEED a bailout, it just doesn’t want a poorly managed airline like Virgin get money when it has been mismanaged while Qantas has managed its finances very well, which would be totally unfair.

  • Mick

    says:

    Qantas was seeking Government assistance in 2014. I can’t recall Virgin threatening the Government not to come to their rescue.

    • Rocket

      says:

      No, that was an ambit claim, they wanted the restrictions on the 49% lifted (no more than 49% to be foreign owned, no more than 35% to be owned by foreign companies and no other airline to own more than 25%).
      They got most of what they wanted which was to remove all the restrictions within the 49% foreign ownership cap but the Commonwealth left the 51% ownership cap in place. It also opened the door for Qantas Domestic to be structured so it can be more than 50% foreign owned however I’m not sure that was approved.
      That was all the bail out demand was about, offsetting an alternative they didn’t want to get something they did want.

    • Rocket

      says:

      PS: Qantas’ request also came from Virgin being able to raise unlimited offshore capital as it had just acquired $300M from overseas. Virgin did object to Qantas getting a bail out and that’s why the offshore ownership limits were redrafted.

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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.

    • Kim

      says:

      Well said, Josh. Many years ago when I was travelling Qantas Business class for work, I and my family took holiday (Y) class airfares with Ansett. We were better treated by Ansett staff from check-in to stepping out of the terminal, than by Qantas staff who have, and still have, the idea that they are not there to serve. Long live Virgin – their Premium Economy is the best I have experienced!

    • Nik

      says:

      Josh I was thinking the same thing. Talk about hypocrisy. I wonder how Qantas would be going if they had started from the same position as Virgin and Virgin was the one who had all the said government advantages coupled with increasing market share to an essential monopoly after Annset’s collapse.

      It is in the best interest of all Australians for there to be a competitor to Qantas, because as we know, Qantas doesn’t give a toss about the public. History has shown that they will inflate their ticket prices in a heart beat if they could.

    • Ben

      says:

      Yeah and you don’t even need to look that far back to discover AJ went cap-in-hand to the Feds in 2014 when QF announced that massive loss. He seems to have forgotten that. I don’t necessarily agree with Governments giving handouts to individual companies, but QF has had it’s fair share so can hardly carry on the way they currently are…

    • Rocket

      says:

      @ JOSH, your comment is not correct.
      Qantas was starved of capital for its entire existence in government ownership. Yes, TAA was owned by the government but any advantage from that was offset by the fact Qantas had to dig deep and pay $400M out of cash reserves and loan to buy TN. It then had to pay off that debt.
      The Commonwealth put its hand out for a dividend every year from 1947 to 1995 and in that entire time, except for a modest injection at BA’s insistence having paid a premium for their shares, it received from the Commonwealth a total of 167M in capital in 47 years and 80M of that was in 1984 to fund the purchase of the 747-300s and first lot of 767s. Everything else it had to do itself.
      TAA doesn’t count as it ceased to exist and was bought out by Qantas.
      VA should NOT be bailed out after being mismanaged without QF being given the same consideration to emerge in the fit state it entered this in.

  • ALAN

    says:

    TRUST JOYCDE TO BE THE TYPICAL ARESHOLE HE IS!! SO PETTY AND VINDICTIVE. HATES THE COMPETITION.
    WHY DOES HE NOT GET A LIFE AND LOOK AFTER HIS OWN INTERESTS INSTEAD OF POKING HIS SHITTY NOSE IN VIRGIN’S BUSINESS!!

  • Again your correspondent misses critical Points. The Virgin shareholders include 2 Chinese shareholders in the order of 47% which are Hainan which is owned by the Communist Party of China and Nanshan which is a private building products company with minor aviation interests. It is on the public record that Hainan/CPC have been told to get out of the airline sector by the Government.
    If Australia lends one cent to Virgin it must be against enforceable Directors and shareholders guarantees and if the transfer of ownership option was to be taken it should be for 49% with a “golden share” held in trust by an Australian bank.
    My prediction is that none of the shareholders would step up.
    Singapore Airlines has just borrowed 49 billion from their government with no mention of supporting their shareholding in virgin Australia. Branson has only put money into virgin UK operations. VA is over 90% foreign owned!

  • Red Cee

    says:

    Very interesting. How would Nationalisation go with all the foreign shareholders?

  • Bill O'Really

    says:

    Let the Irish team take over the whole thing and lets run it like Ryan Air. And make sure that $24,000,000 is the minimum salary for the lad at the top. No need for Richard when Al Pal comes to the party, and what a party he can splash too.

  • Ian

    says:

    Apparently Joyce has forgotten his plea for a bailout just a few years ago

  • Salesh Prasad

    says:

    I understand the need to save jobs, but why bail out a foreign owned company. Would the Government bailout one of the foreign owned mining companies, which employs more people than Virgin?
    The Government should look at the possibility of Government buying QF, and having a cap on airfares?
    For example, City Rail is owned and run by NSW Government, (no competition), but NSW rail fares are very reasonable.

  • Craigy

    says:

    @ Josh, that is just silly. You are trying to apply a set of circumstances from another era to today. It just isn’t the same. Before the mid 90s’ Qantas was an international airline only. Its domestic counterpart was TAA who with Ansett, operated under the two airline policy, where no competitors could enter the market. Up until the 80s, they operated the same equipment and similar schedules. Then Ansett replaced the DC9s with B737-200s and ordered the Boeing 767 (with a flight engineer). TAA continued to operate the DC9 and oredered the A300B4. Then both Ansett and Australian operated the B737-300 replacing DC9s and B737-200s.

    In the 90s’ Qantas and Australian were merged and sold off. 25% was sold to British Airways and controlled by the Qantas Sale Act. Between then and now, Compass (1and 2), East West, Ansett and Southern Cross have all gone broke. If you want a level playing field for Qantas and Virgin, get rid of the Qantas Sale Act which would allow Qantas for example to borrow on better terms etc.

    And for the record, Qantas did have competition on international routes to the US, Japan and Hong Kong when Ansett started longhaul services with ex Singapore Airlines B743 and B744 equipment.

  • Christopher Emery

    says:

    Perhaps they should be bailed out in proportion to their taxes paid in Australia over the last 5 years.

  • Bernard Samms

    says:

    You are right there Josh. Also picking up Australia airlines (ex TAA) for $400M was a huge bonus for Qantas. They then had a feed into domestic services. God help us if Virgin goes under, as Mr Joyce will need more accountants to count his money and the public will pay through the nose. It will be years, maybe decades before another airline will popup as a true competitor.

  • BJDUBAUS

    says:

    Dale, Agree with your comments wholeheartedly, although I would add that not just major shareholders, but minor shareholders would absolutely jump at the chance to reduce their VA holdings right now if they weren’t valued at about 1/4 of what the majority of them paid for the stocks!

  • Well said Josh and Kim. To have VA disappear from the scene would be a dream come true for AJ.

  • Jeff Carswell

    says:

    Let Virgin’s owners provide the necessary funds. Australian tax payers should not support a failing poorly managed airline.

  • AlanH

    says:

    I’m no economist but how would a $4.2 billion loan by an airline that is already larger, stronger and in a more privileged position “level the playing field” against a $1.4 billion loan to VA? Despite being foreign-owned, Virgin needs to be rescued if only to prevent Qantas gaining a monopoly. That would be disastrous for Australian RPT aviation. But rather than simply give VA a loan perhaps the Gov’t needs to discuss their current position with its overseas owners.

    • Rocket

      says:

      His point is because they have managed their balance sheet and VA has not, not making any profits for 7 years. His point is why should one company burn its house down and get it rebuilt by the government when the other company looked after theirs and paid their mortgage off early, to use an analogy. I doubt QF want the money as it would upset their shareholders who would lose some of their equity, its the point of why bother saving money, paying cash for aircraft, negotiating hard on leases (VA’s leases on some aircraft are allegedly some of the most expensive), doing proper fuel hedging and saving money only to have your less managed competitor bailed out.

  • Andrew

    says:

    Wish my mortgage went the same was as this ‘offer’ to tax payers…. if everything goes well i will pay back the loan and keep the company, if its goes bad you can have the company*.
    *Oh and by the way i spent your $1.4b….

  • Lucas

    says:

    what’s the point of handing over fists full of cash when the airline is not committed to maintaining jobs? It has just made all Tigerair and NZ based pilots redundant.

  • Mark

    says:

    funny, These capitalists turn socialist real quick….and i bet the won’t pay a cent back when they start to make their millions back!!!

  • Bernhard

    says:

    I hope the govt is making sure it’s getting certain agreements from all airlines it bailouts which benefit the travelling public and regional areas in particular instead of ‘here’s the cash do as you please’ practices the USA did in 2008/9 with banks and car industry and others. This might mean making sure each airline services particular regional areas to ensure a service exists and not just milking the popular routes, so that airlines cover profitable and non-profitable routes. The 747s and a380s should be kept and some routes exited; airlines been talking too long about pilot shortages, well use larger planes to keep costs down instead of smaller planes which ended requiring more crew and maintenance for arguably less overall income. For example don’t have 2or 3 flights going somewhere in a day, use bigger planes to reduce the need for multiple trips. Add in the recent borrowing against planes and where does that leave the airline when planes are overused and worn out and debts still need paying-increased fares, inferior product/service.

  • Peter Orange

    says:

    Certainly think memories are short with QF Management and the public money they received for many many years and they were then gifted the domestic network with the merger to TAA. There are considerable number of jobs at stake – skilled jobs from crew to engineers. Nationalisation is not the answer but assistance certainly is

  • Brad

    says:

    Virgin are foreign owned & those backers (big backers at that) need to step up. QF has got to where it is through good management….Virgin (not a full service carrier) is where they are due to their management. I’ve had many a great Qantas flight & think they’re more than entitled to ask for a fair playing field. I support the national carrier 100%.

  • Craig

    says:

    Every one is forgetting that Qantas was once government owned till the 1990s and forced out rivals now its comoplaining and like other comments it was allowed to swallow up rivals even after virgin arrived just remember Virgin has only asked for a loan history is repeating what happened in England when a major airline had good competition

  • Wayno

    says:

    If Virgin collapses, Qantas and it’s Jetstar subsidiary will have a powerful monopolistic stranglehold on the domestic aviation market in Australia. There will be significant obstacles for another competitor to enter the Australian market, much more so than when Virgin Blue gained a foothold during the demise of Ansett. Mr Joyce is no mug. This pandemic will indeed cause significant short term pain to the Qantas bottom line, but the long term play here is that it provides Qantas with the perfect opportunity to wipe out it’s only real competitor in the domestic market. With Virgin gone Qantas will significantly increase it’s market share overnight, thus providing it significant power to manipulate ticket prices and effectively ‘lock in’ the airlines long term dominance in the domestic market. Hence the strong rhetoric from Qantas to discourage any lifeline investment in Virgin at this time. As a consumer, irrespective of your thoughts around the foreign ownership of Virgin, be careful in giving ANY company the opportunity to put itself in a monopolistic position in such an important industry to this nation.

  • davistev

    says:

    Unbelievable – first the airlines refuse to refund customers their money for cancelled flights, now they want to rob the taxpayer.

    Essentially, they were operating while insolvent if they need future monies to stay open today.

    • Rocket

      says:

      Most of the airfare conditions state the ticket is non-refundable, non-transferable or attracts some sort of penalty for any change, people never read the conditions, they just click through then when they get refused a refund, it’s never their fault, always the airline.

  • Albertina Pettenon

    says:

    We need to come together & help one another, this is so important at this difficult time. We are all in this together. Australians have been using the services with Virgin, Qantas & other airlines so it’s only right that the government helps out to everyone. Together with a loving heart we can move mountains.

    • Rocket

      says:

      Hear, Hear!!!

  • Kurt

    says:

    Joyce is such an arrogant little trumped up twit. He spouts off all this nasty negative comments without engaging his brain before he speaks. I put that down to his “short mans” syndrome. Competition is vital and all QF wants is market domination and to hell with those whose livelihood relies on working for a competitor.

    • Rocket

      says:

      Yes, because he’s highly paid by Qantas’ shareholders to make sure Virgin makes a profit and Qantas gets the bad end of any deal.
      It’s like saying a Defense Attorney shouldn’t criticize the prosecution’s case.

  • Paul R

    says:

    Whilst it is essential we have a competitor remaining in the domestic market when things get back to normal, to give the public a choice of carriers, Virgins long haul international ops are no longer sustainable,
    There are plenty of airlines that will offer the Australian public choice of product and fares for international travel!

  • TD

    says:

    How much bailout do they really need considering the government has already given them (and other operators) exemptions / handouts on some operating costs and if all of their staff (including Tiger) were faithfully kept on as staff as promised and went on the government s keep me follow on payments? How much “bailout” are the overseas owners willing to or are contributing ? It is Australian taxpayers money after all which could have better uses for Australian companies or humanitarian reasons.
    If they do get a bailout ,and they probably will ,then let’s make sure Australians get their “investment ” back as it is to be a loan (to overseas companies) after all.

  • If virgin is allowed to follow Virgin Blue, Compass, Ansett etc, the trade off should be to allow ALL foreign operators to pick up passengers any where in Australia for transport to any where in Australia,for example AIRNIUGINI, CATHAY PACIFIC, SINGAPORE, BRITISH AIRWAYS, Air NewZealand, CAIRNS to BRISBANE and SYDNEY, instead finding no flight Syd to Cns between noon and 4pm.

    • Rocket

      says:

      Absolute rubbish, that’s something that exists no where else in the world. Besides, no interntatonal airline operates domestic sectors anymore and you can’t just have 100s of domestic passengers milling around in international terminals.
      The answer, if VA folds is to offer tax breaks for someone else to come in and take up the place (Ryannair or Air NZ with the Air NZ Express product, the latter would be my preference) or make Qantas divest itself of Jetstar, join it with Rex and nationalise a majority of Qantas so fares can be more easily regulated.
      Every example you gave (except Virgin Blue, which still exists, it’s called Virgin Australia) is ample evidence that without some element of government ownership and some smart regulation, Australia isn’t big enough for two major airlines. It never has been, the closest to us with that situation is Canada and they have 37M people in a country where air travel is essential like ours.

  • Monirul Sheikh

    says:

    QANTAS, the Australian brand is in big trouble. What will happen to it is similar to what happened to HOLDEN. It is time to let go the government share in Qantas and let it compete in int’l market. Let Qantas dictate it terms freehand. But Alan Joyce must go as he is just not the calibre what Qantas need. We need someone who truly understand the global aviation, like the one in Emirates, Tim Clark.

    • Rocket

      says:

      @ MONIRUL.

      You are completely wrong… Qantas is NOT OWNED BY the government, it hasn’t been for 26 years. It is a very strong and very large carrier with a stronger balance sheet and less debt than most of the airlines in the world. Airlines will fail, Qantas will not be one of them.
      Comparing it with Holden is just utter rubbish and shows you don’t know the facts. Holden once it was bought by GM in the 40s was NEVER an Australian company. Qantas has ALWAYS been and was only owned by the government for 45 of it’s 100 years.
      Please do some research and to use Tim Clark, what a complete joke. Emirates is TOTALLY STATE OWNED and is so efficient it’s being bailed out by the UAE. Qantas does not NEED a bailout, it just doesn’t want a poorly managed airline like Virgin get money when it has been mismanaged while Qantas has managed its finances very well, which would be totally unfair.

  • Mick

    says:

    Qantas was seeking Government assistance in 2014. I can’t recall Virgin threatening the Government not to come to their rescue.

    • Rocket

      says:

      No, that was an ambit claim, they wanted the restrictions on the 49% lifted (no more than 49% to be foreign owned, no more than 35% to be owned by foreign companies and no other airline to own more than 25%).
      They got most of what they wanted which was to remove all the restrictions within the 49% foreign ownership cap but the Commonwealth left the 51% ownership cap in place. It also opened the door for Qantas Domestic to be structured so it can be more than 50% foreign owned however I’m not sure that was approved.
      That was all the bail out demand was about, offsetting an alternative they didn’t want to get something they did want.

    • Rocket

      says:

      PS: Qantas’ request also came from Virgin being able to raise unlimited offshore capital as it had just acquired $300M from overseas. Virgin did object to Qantas getting a bail out and that’s why the offshore ownership limits were redrafted.

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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.

    • Kim

      says:

      Well said, Josh. Many years ago when I was travelling Qantas Business class for work, I and my family took holiday (Y) class airfares with Ansett. We were better treated by Ansett staff from check-in to stepping out of the terminal, than by Qantas staff who have, and still have, the idea that they are not there to serve. Long live Virgin – their Premium Economy is the best I have experienced!

    • Nik

      says:

      Josh I was thinking the same thing. Talk about hypocrisy. I wonder how Qantas would be going if they had started from the same position as Virgin and Virgin was the one who had all the said government advantages coupled with increasing market share to an essential monopoly after Annset’s collapse.

      It is in the best interest of all Australians for there to be a competitor to Qantas, because as we know, Qantas doesn’t give a toss about the public. History has shown that they will inflate their ticket prices in a heart beat if they could.

    • Ben

      says:

      Yeah and you don’t even need to look that far back to discover AJ went cap-in-hand to the Feds in 2014 when QF announced that massive loss. He seems to have forgotten that. I don’t necessarily agree with Governments giving handouts to individual companies, but QF has had it’s fair share so can hardly carry on the way they currently are…

    • Rocket

      says:

      @ JOSH, your comment is not correct.
      Qantas was starved of capital for its entire existence in government ownership. Yes, TAA was owned by the government but any advantage from that was offset by the fact Qantas had to dig deep and pay $400M out of cash reserves and loan to buy TN. It then had to pay off that debt.
      The Commonwealth put its hand out for a dividend every year from 1947 to 1995 and in that entire time, except for a modest injection at BA’s insistence having paid a premium for their shares, it received from the Commonwealth a total of 167M in capital in 47 years and 80M of that was in 1984 to fund the purchase of the 747-300s and first lot of 767s. Everything else it had to do itself.
      TAA doesn’t count as it ceased to exist and was bought out by Qantas.
      VA should NOT be bailed out after being mismanaged without QF being given the same consideration to emerge in the fit state it entered this in.

  • ALAN

    says:

    TRUST JOYCDE TO BE THE TYPICAL ARESHOLE HE IS!! SO PETTY AND VINDICTIVE. HATES THE COMPETITION.
    WHY DOES HE NOT GET A LIFE AND LOOK AFTER HIS OWN INTERESTS INSTEAD OF POKING HIS SHITTY NOSE IN VIRGIN’S BUSINESS!!

  • Again your correspondent misses critical Points. The Virgin shareholders include 2 Chinese shareholders in the order of 47% which are Hainan which is owned by the Communist Party of China and Nanshan which is a private building products company with minor aviation interests. It is on the public record that Hainan/CPC have been told to get out of the airline sector by the Government.
    If Australia lends one cent to Virgin it must be against enforceable Directors and shareholders guarantees and if the transfer of ownership option was to be taken it should be for 49% with a “golden share” held in trust by an Australian bank.
    My prediction is that none of the shareholders would step up.
    Singapore Airlines has just borrowed 49 billion from their government with no mention of supporting their shareholding in virgin Australia. Branson has only put money into virgin UK operations. VA is over 90% foreign owned!

  • Red Cee

    says:

    Very interesting. How would Nationalisation go with all the foreign shareholders?

  • Bill O'Really

    says:

    Let the Irish team take over the whole thing and lets run it like Ryan Air. And make sure that $24,000,000 is the minimum salary for the lad at the top. No need for Richard when Al Pal comes to the party, and what a party he can splash too.

  • Ian

    says:

    Apparently Joyce has forgotten his plea for a bailout just a few years ago

  • Salesh Prasad

    says:

    I understand the need to save jobs, but why bail out a foreign owned company. Would the Government bailout one of the foreign owned mining companies, which employs more people than Virgin?
    The Government should look at the possibility of Government buying QF, and having a cap on airfares?
    For example, City Rail is owned and run by NSW Government, (no competition), but NSW rail fares are very reasonable.

  • Craigy

    says:

    @ Josh, that is just silly. You are trying to apply a set of circumstances from another era to today. It just isn’t the same. Before the mid 90s’ Qantas was an international airline only. Its domestic counterpart was TAA who with Ansett, operated under the two airline policy, where no competitors could enter the market. Up until the 80s, they operated the same equipment and similar schedules. Then Ansett replaced the DC9s with B737-200s and ordered the Boeing 767 (with a flight engineer). TAA continued to operate the DC9 and oredered the A300B4. Then both Ansett and Australian operated the B737-300 replacing DC9s and B737-200s.

    In the 90s’ Qantas and Australian were merged and sold off. 25% was sold to British Airways and controlled by the Qantas Sale Act. Between then and now, Compass (1and 2), East West, Ansett and Southern Cross have all gone broke. If you want a level playing field for Qantas and Virgin, get rid of the Qantas Sale Act which would allow Qantas for example to borrow on better terms etc.

    And for the record, Qantas did have competition on international routes to the US, Japan and Hong Kong when Ansett started longhaul services with ex Singapore Airlines B743 and B744 equipment.

  • Christopher Emery

    says:

    Perhaps they should be bailed out in proportion to their taxes paid in Australia over the last 5 years.

  • Bernard Samms

    says:

    You are right there Josh. Also picking up Australia airlines (ex TAA) for $400M was a huge bonus for Qantas. They then had a feed into domestic services. God help us if Virgin goes under, as Mr Joyce will need more accountants to count his money and the public will pay through the nose. It will be years, maybe decades before another airline will popup as a true competitor.

  • BJDUBAUS

    says:

    Dale, Agree with your comments wholeheartedly, although I would add that not just major shareholders, but minor shareholders would absolutely jump at the chance to reduce their VA holdings right now if they weren’t valued at about 1/4 of what the majority of them paid for the stocks!

  • Well said Josh and Kim. To have VA disappear from the scene would be a dream come true for AJ.

  • Jeff Carswell

    says:

    Let Virgin’s owners provide the necessary funds. Australian tax payers should not support a failing poorly managed airline.

  • AlanH

    says:

    I’m no economist but how would a $4.2 billion loan by an airline that is already larger, stronger and in a more privileged position “level the playing field” against a $1.4 billion loan to VA? Despite being foreign-owned, Virgin needs to be rescued if only to prevent Qantas gaining a monopoly. That would be disastrous for Australian RPT aviation. But rather than simply give VA a loan perhaps the Gov’t needs to discuss their current position with its overseas owners.

    • Rocket

      says:

      His point is because they have managed their balance sheet and VA has not, not making any profits for 7 years. His point is why should one company burn its house down and get it rebuilt by the government when the other company looked after theirs and paid their mortgage off early, to use an analogy. I doubt QF want the money as it would upset their shareholders who would lose some of their equity, its the point of why bother saving money, paying cash for aircraft, negotiating hard on leases (VA’s leases on some aircraft are allegedly some of the most expensive), doing proper fuel hedging and saving money only to have your less managed competitor bailed out.

  • Andrew

    says:

    Wish my mortgage went the same was as this ‘offer’ to tax payers…. if everything goes well i will pay back the loan and keep the company, if its goes bad you can have the company*.
    *Oh and by the way i spent your $1.4b….

  • Lucas

    says:

    what’s the point of handing over fists full of cash when the airline is not committed to maintaining jobs? It has just made all Tigerair and NZ based pilots redundant.

  • Mark

    says:

    funny, These capitalists turn socialist real quick….and i bet the won’t pay a cent back when they start to make their millions back!!!

  • Bernhard

    says:

    I hope the govt is making sure it’s getting certain agreements from all airlines it bailouts which benefit the travelling public and regional areas in particular instead of ‘here’s the cash do as you please’ practices the USA did in 2008/9 with banks and car industry and others. This might mean making sure each airline services particular regional areas to ensure a service exists and not just milking the popular routes, so that airlines cover profitable and non-profitable routes. The 747s and a380s should be kept and some routes exited; airlines been talking too long about pilot shortages, well use larger planes to keep costs down instead of smaller planes which ended requiring more crew and maintenance for arguably less overall income. For example don’t have 2or 3 flights going somewhere in a day, use bigger planes to reduce the need for multiple trips. Add in the recent borrowing against planes and where does that leave the airline when planes are overused and worn out and debts still need paying-increased fares, inferior product/service.

  • Peter Orange

    says:

    Certainly think memories are short with QF Management and the public money they received for many many years and they were then gifted the domestic network with the merger to TAA. There are considerable number of jobs at stake – skilled jobs from crew to engineers. Nationalisation is not the answer but assistance certainly is

  • Brad

    says:

    Virgin are foreign owned & those backers (big backers at that) need to step up. QF has got to where it is through good management….Virgin (not a full service carrier) is where they are due to their management. I’ve had many a great Qantas flight & think they’re more than entitled to ask for a fair playing field. I support the national carrier 100%.

  • Craig

    says:

    Every one is forgetting that Qantas was once government owned till the 1990s and forced out rivals now its comoplaining and like other comments it was allowed to swallow up rivals even after virgin arrived just remember Virgin has only asked for a loan history is repeating what happened in England when a major airline had good competition

  • Wayno

    says:

    If Virgin collapses, Qantas and it’s Jetstar subsidiary will have a powerful monopolistic stranglehold on the domestic aviation market in Australia. There will be significant obstacles for another competitor to enter the Australian market, much more so than when Virgin Blue gained a foothold during the demise of Ansett. Mr Joyce is no mug. This pandemic will indeed cause significant short term pain to the Qantas bottom line, but the long term play here is that it provides Qantas with the perfect opportunity to wipe out it’s only real competitor in the domestic market. With Virgin gone Qantas will significantly increase it’s market share overnight, thus providing it significant power to manipulate ticket prices and effectively ‘lock in’ the airlines long term dominance in the domestic market. Hence the strong rhetoric from Qantas to discourage any lifeline investment in Virgin at this time. As a consumer, irrespective of your thoughts around the foreign ownership of Virgin, be careful in giving ANY company the opportunity to put itself in a monopolistic position in such an important industry to this nation.

  • davistev

    says:

    Unbelievable – first the airlines refuse to refund customers their money for cancelled flights, now they want to rob the taxpayer.

    Essentially, they were operating while insolvent if they need future monies to stay open today.

    • Rocket

      says:

      Most of the airfare conditions state the ticket is non-refundable, non-transferable or attracts some sort of penalty for any change, people never read the conditions, they just click through then when they get refused a refund, it’s never their fault, always the airline.

  • Albertina Pettenon

    says:

    We need to come together & help one another, this is so important at this difficult time. We are all in this together. Australians have been using the services with Virgin, Qantas & other airlines so it’s only right that the government helps out to everyone. Together with a loving heart we can move mountains.

    • Rocket

      says:

      Hear, Hear!!!

  • Kurt

    says:

    Joyce is such an arrogant little trumped up twit. He spouts off all this nasty negative comments without engaging his brain before he speaks. I put that down to his “short mans” syndrome. Competition is vital and all QF wants is market domination and to hell with those whose livelihood relies on working for a competitor.

    • Rocket

      says:

      Yes, because he’s highly paid by Qantas’ shareholders to make sure Virgin makes a profit and Qantas gets the bad end of any deal.
      It’s like saying a Defense Attorney shouldn’t criticize the prosecution’s case.

  • Paul R

    says:

    Whilst it is essential we have a competitor remaining in the domestic market when things get back to normal, to give the public a choice of carriers, Virgins long haul international ops are no longer sustainable,
    There are plenty of airlines that will offer the Australian public choice of product and fares for international travel!

  • TD

    says:

    How much bailout do they really need considering the government has already given them (and other operators) exemptions / handouts on some operating costs and if all of their staff (including Tiger) were faithfully kept on as staff as promised and went on the government s keep me follow on payments? How much “bailout” are the overseas owners willing to or are contributing ? It is Australian taxpayers money after all which could have better uses for Australian companies or humanitarian reasons.
    If they do get a bailout ,and they probably will ,then let’s make sure Australians get their “investment ” back as it is to be a loan (to overseas companies) after all.

  • If virgin is allowed to follow Virgin Blue, Compass, Ansett etc, the trade off should be to allow ALL foreign operators to pick up passengers any where in Australia for transport to any where in Australia,for example AIRNIUGINI, CATHAY PACIFIC, SINGAPORE, BRITISH AIRWAYS, Air NewZealand, CAIRNS to BRISBANE and SYDNEY, instead finding no flight Syd to Cns between noon and 4pm.

    • Rocket

      says:

      Absolute rubbish, that’s something that exists no where else in the world. Besides, no interntatonal airline operates domestic sectors anymore and you can’t just have 100s of domestic passengers milling around in international terminals.
      The answer, if VA folds is to offer tax breaks for someone else to come in and take up the place (Ryannair or Air NZ with the Air NZ Express product, the latter would be my preference) or make Qantas divest itself of Jetstar, join it with Rex and nationalise a majority of Qantas so fares can be more easily regulated.
      Every example you gave (except Virgin Blue, which still exists, it’s called Virgin Australia) is ample evidence that without some element of government ownership and some smart regulation, Australia isn’t big enough for two major airlines. It never has been, the closest to us with that situation is Canada and they have 37M people in a country where air travel is essential like ours.

  • Monirul Sheikh

    says:

    QANTAS, the Australian brand is in big trouble. What will happen to it is similar to what happened to HOLDEN. It is time to let go the government share in Qantas and let it compete in int’l market. Let Qantas dictate it terms freehand. But Alan Joyce must go as he is just not the calibre what Qantas need. We need someone who truly understand the global aviation, like the one in Emirates, Tim Clark.

    • Rocket

      says:

      @ MONIRUL.

      You are completely wrong… Qantas is NOT OWNED BY the government, it hasn’t been for 26 years. It is a very strong and very large carrier with a stronger balance sheet and less debt than most of the airlines in the world. Airlines will fail, Qantas will not be one of them.
      Comparing it with Holden is just utter rubbish and shows you don’t know the facts. Holden once it was bought by GM in the 40s was NEVER an Australian company. Qantas has ALWAYS been and was only owned by the government for 45 of it’s 100 years.
      Please do some research and to use Tim Clark, what a complete joke. Emirates is TOTALLY STATE OWNED and is so efficient it’s being bailed out by the UAE. Qantas does not NEED a bailout, it just doesn’t want a poorly managed airline like Virgin get money when it has been mismanaged while Qantas has managed its finances very well, which would be totally unfair.

  • Mick

    says:

    Qantas was seeking Government assistance in 2014. I can’t recall Virgin threatening the Government not to come to their rescue.

    • Rocket

      says:

      No, that was an ambit claim, they wanted the restrictions on the 49% lifted (no more than 49% to be foreign owned, no more than 35% to be owned by foreign companies and no other airline to own more than 25%).
      They got most of what they wanted which was to remove all the restrictions within the 49% foreign ownership cap but the Commonwealth left the 51% ownership cap in place. It also opened the door for Qantas Domestic to be structured so it can be more than 50% foreign owned however I’m not sure that was approved.
      That was all the bail out demand was about, offsetting an alternative they didn’t want to get something they did want.

    • Rocket

      says:

      PS: Qantas’ request also came from Virgin being able to raise unlimited offshore capital as it had just acquired $300M from overseas. Virgin did object to Qantas getting a bail out and that’s why the offshore ownership limits were redrafted.

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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.

    • Kim

      says:

      Well said, Josh. Many years ago when I was travelling Qantas Business class for work, I and my family took holiday (Y) class airfares with Ansett. We were better treated by Ansett staff from check-in to stepping out of the terminal, than by Qantas staff who have, and still have, the idea that they are not there to serve. Long live Virgin – their Premium Economy is the best I have experienced!

    • Nik

      says:

      Josh I was thinking the same thing. Talk about hypocrisy. I wonder how Qantas would be going if they had started from the same position as Virgin and Virgin was the one who had all the said government advantages coupled with increasing market share to an essential monopoly after Annset’s collapse.

      It is in the best interest of all Australians for there to be a competitor to Qantas, because as we know, Qantas doesn’t give a toss about the public. History has shown that they will inflate their ticket prices in a heart beat if they could.

    • Ben

      says:

      Yeah and you don’t even need to look that far back to discover AJ went cap-in-hand to the Feds in 2014 when QF announced that massive loss. He seems to have forgotten that. I don’t necessarily agree with Governments giving handouts to individual companies, but QF has had it’s fair share so can hardly carry on the way they currently are…

    • Rocket

      says:

      @ JOSH, your comment is not correct.
      Qantas was starved of capital for its entire existence in government ownership. Yes, TAA was owned by the government but any advantage from that was offset by the fact Qantas had to dig deep and pay $400M out of cash reserves and loan to buy TN. It then had to pay off that debt.
      The Commonwealth put its hand out for a dividend every year from 1947 to 1995 and in that entire time, except for a modest injection at BA’s insistence having paid a premium for their shares, it received from the Commonwealth a total of 167M in capital in 47 years and 80M of that was in 1984 to fund the purchase of the 747-300s and first lot of 767s. Everything else it had to do itself.
      TAA doesn’t count as it ceased to exist and was bought out by Qantas.
      VA should NOT be bailed out after being mismanaged without QF being given the same consideration to emerge in the fit state it entered this in.

  • ALAN

    says:

    TRUST JOYCDE TO BE THE TYPICAL ARESHOLE HE IS!! SO PETTY AND VINDICTIVE. HATES THE COMPETITION.
    WHY DOES HE NOT GET A LIFE AND LOOK AFTER HIS OWN INTERESTS INSTEAD OF POKING HIS SHITTY NOSE IN VIRGIN’S BUSINESS!!

  • Again your correspondent misses critical Points. The Virgin shareholders include 2 Chinese shareholders in the order of 47% which are Hainan which is owned by the Communist Party of China and Nanshan which is a private building products company with minor aviation interests. It is on the public record that Hainan/CPC have been told to get out of the airline sector by the Government.
    If Australia lends one cent to Virgin it must be against enforceable Directors and shareholders guarantees and if the transfer of ownership option was to be taken it should be for 49% with a “golden share” held in trust by an Australian bank.
    My prediction is that none of the shareholders would step up.
    Singapore Airlines has just borrowed 49 billion from their government with no mention of supporting their shareholding in virgin Australia. Branson has only put money into virgin UK operations. VA is over 90% foreign owned!

  • Red Cee

    says:

    Very interesting. How would Nationalisation go with all the foreign shareholders?

  • Bill O'Really

    says:

    Let the Irish team take over the whole thing and lets run it like Ryan Air. And make sure that $24,000,000 is the minimum salary for the lad at the top. No need for Richard when Al Pal comes to the party, and what a party he can splash too.

  • Ian

    says:

    Apparently Joyce has forgotten his plea for a bailout just a few years ago

  • Salesh Prasad

    says:

    I understand the need to save jobs, but why bail out a foreign owned company. Would the Government bailout one of the foreign owned mining companies, which employs more people than Virgin?
    The Government should look at the possibility of Government buying QF, and having a cap on airfares?
    For example, City Rail is owned and run by NSW Government, (no competition), but NSW rail fares are very reasonable.

  • Craigy

    says:

    @ Josh, that is just silly. You are trying to apply a set of circumstances from another era to today. It just isn’t the same. Before the mid 90s’ Qantas was an international airline only. Its domestic counterpart was TAA who with Ansett, operated under the two airline policy, where no competitors could enter the market. Up until the 80s, they operated the same equipment and similar schedules. Then Ansett replaced the DC9s with B737-200s and ordered the Boeing 767 (with a flight engineer). TAA continued to operate the DC9 and oredered the A300B4. Then both Ansett and Australian operated the B737-300 replacing DC9s and B737-200s.

    In the 90s’ Qantas and Australian were merged and sold off. 25% was sold to British Airways and controlled by the Qantas Sale Act. Between then and now, Compass (1and 2), East West, Ansett and Southern Cross have all gone broke. If you want a level playing field for Qantas and Virgin, get rid of the Qantas Sale Act which would allow Qantas for example to borrow on better terms etc.

    And for the record, Qantas did have competition on international routes to the US, Japan and Hong Kong when Ansett started longhaul services with ex Singapore Airlines B743 and B744 equipment.

  • Christopher Emery

    says:

    Perhaps they should be bailed out in proportion to their taxes paid in Australia over the last 5 years.

  • Bernard Samms

    says:

    You are right there Josh. Also picking up Australia airlines (ex TAA) for $400M was a huge bonus for Qantas. They then had a feed into domestic services. God help us if Virgin goes under, as Mr Joyce will need more accountants to count his money and the public will pay through the nose. It will be years, maybe decades before another airline will popup as a true competitor.

  • BJDUBAUS

    says:

    Dale, Agree with your comments wholeheartedly, although I would add that not just major shareholders, but minor shareholders would absolutely jump at the chance to reduce their VA holdings right now if they weren’t valued at about 1/4 of what the majority of them paid for the stocks!

  • Well said Josh and Kim. To have VA disappear from the scene would be a dream come true for AJ.

  • Jeff Carswell

    says:

    Let Virgin’s owners provide the necessary funds. Australian tax payers should not support a failing poorly managed airline.

  • AlanH

    says:

    I’m no economist but how would a $4.2 billion loan by an airline that is already larger, stronger and in a more privileged position “level the playing field” against a $1.4 billion loan to VA? Despite being foreign-owned, Virgin needs to be rescued if only to prevent Qantas gaining a monopoly. That would be disastrous for Australian RPT aviation. But rather than simply give VA a loan perhaps the Gov’t needs to discuss their current position with its overseas owners.

    • Rocket

      says:

      His point is because they have managed their balance sheet and VA has not, not making any profits for 7 years. His point is why should one company burn its house down and get it rebuilt by the government when the other company looked after theirs and paid their mortgage off early, to use an analogy. I doubt QF want the money as it would upset their shareholders who would lose some of their equity, its the point of why bother saving money, paying cash for aircraft, negotiating hard on leases (VA’s leases on some aircraft are allegedly some of the most expensive), doing proper fuel hedging and saving money only to have your less managed competitor bailed out.

  • Andrew

    says:

    Wish my mortgage went the same was as this ‘offer’ to tax payers…. if everything goes well i will pay back the loan and keep the company, if its goes bad you can have the company*.
    *Oh and by the way i spent your $1.4b….

  • Lucas

    says:

    what’s the point of handing over fists full of cash when the airline is not committed to maintaining jobs? It has just made all Tigerair and NZ based pilots redundant.

  • Mark

    says:

    funny, These capitalists turn socialist real quick….and i bet the won’t pay a cent back when they start to make their millions back!!!

  • Bernhard

    says:

    I hope the govt is making sure it’s getting certain agreements from all airlines it bailouts which benefit the travelling public and regional areas in particular instead of ‘here’s the cash do as you please’ practices the USA did in 2008/9 with banks and car industry and others. This might mean making sure each airline services particular regional areas to ensure a service exists and not just milking the popular routes, so that airlines cover profitable and non-profitable routes. The 747s and a380s should be kept and some routes exited; airlines been talking too long about pilot shortages, well use larger planes to keep costs down instead of smaller planes which ended requiring more crew and maintenance for arguably less overall income. For example don’t have 2or 3 flights going somewhere in a day, use bigger planes to reduce the need for multiple trips. Add in the recent borrowing against planes and where does that leave the airline when planes are overused and worn out and debts still need paying-increased fares, inferior product/service.

  • Peter Orange

    says:

    Certainly think memories are short with QF Management and the public money they received for many many years and they were then gifted the domestic network with the merger to TAA. There are considerable number of jobs at stake – skilled jobs from crew to engineers. Nationalisation is not the answer but assistance certainly is

  • Brad

    says:

    Virgin are foreign owned & those backers (big backers at that) need to step up. QF has got to where it is through good management….Virgin (not a full service carrier) is where they are due to their management. I’ve had many a great Qantas flight & think they’re more than entitled to ask for a fair playing field. I support the national carrier 100%.

  • Craig

    says:

    Every one is forgetting that Qantas was once government owned till the 1990s and forced out rivals now its comoplaining and like other comments it was allowed to swallow up rivals even after virgin arrived just remember Virgin has only asked for a loan history is repeating what happened in England when a major airline had good competition

  • Wayno

    says:

    If Virgin collapses, Qantas and it’s Jetstar subsidiary will have a powerful monopolistic stranglehold on the domestic aviation market in Australia. There will be significant obstacles for another competitor to enter the Australian market, much more so than when Virgin Blue gained a foothold during the demise of Ansett. Mr Joyce is no mug. This pandemic will indeed cause significant short term pain to the Qantas bottom line, but the long term play here is that it provides Qantas with the perfect opportunity to wipe out it’s only real competitor in the domestic market. With Virgin gone Qantas will significantly increase it’s market share overnight, thus providing it significant power to manipulate ticket prices and effectively ‘lock in’ the airlines long term dominance in the domestic market. Hence the strong rhetoric from Qantas to discourage any lifeline investment in Virgin at this time. As a consumer, irrespective of your thoughts around the foreign ownership of Virgin, be careful in giving ANY company the opportunity to put itself in a monopolistic position in such an important industry to this nation.

  • davistev

    says:

    Unbelievable – first the airlines refuse to refund customers their money for cancelled flights, now they want to rob the taxpayer.

    Essentially, they were operating while insolvent if they need future monies to stay open today.

    • Rocket

      says:

      Most of the airfare conditions state the ticket is non-refundable, non-transferable or attracts some sort of penalty for any change, people never read the conditions, they just click through then when they get refused a refund, it’s never their fault, always the airline.

  • Albertina Pettenon

    says:

    We need to come together & help one another, this is so important at this difficult time. We are all in this together. Australians have been using the services with Virgin, Qantas & other airlines so it’s only right that the government helps out to everyone. Together with a loving heart we can move mountains.

    • Rocket

      says:

      Hear, Hear!!!

  • Kurt

    says:

    Joyce is such an arrogant little trumped up twit. He spouts off all this nasty negative comments without engaging his brain before he speaks. I put that down to his “short mans” syndrome. Competition is vital and all QF wants is market domination and to hell with those whose livelihood relies on working for a competitor.

    • Rocket

      says:

      Yes, because he’s highly paid by Qantas’ shareholders to make sure Virgin makes a profit and Qantas gets the bad end of any deal.
      It’s like saying a Defense Attorney shouldn’t criticize the prosecution’s case.

  • Paul R

    says:

    Whilst it is essential we have a competitor remaining in the domestic market when things get back to normal, to give the public a choice of carriers, Virgins long haul international ops are no longer sustainable,
    There are plenty of airlines that will offer the Australian public choice of product and fares for international travel!

  • TD

    says:

    How much bailout do they really need considering the government has already given them (and other operators) exemptions / handouts on some operating costs and if all of their staff (including Tiger) were faithfully kept on as staff as promised and went on the government s keep me follow on payments? How much “bailout” are the overseas owners willing to or are contributing ? It is Australian taxpayers money after all which could have better uses for Australian companies or humanitarian reasons.
    If they do get a bailout ,and they probably will ,then let’s make sure Australians get their “investment ” back as it is to be a loan (to overseas companies) after all.

  • If virgin is allowed to follow Virgin Blue, Compass, Ansett etc, the trade off should be to allow ALL foreign operators to pick up passengers any where in Australia for transport to any where in Australia,for example AIRNIUGINI, CATHAY PACIFIC, SINGAPORE, BRITISH AIRWAYS, Air NewZealand, CAIRNS to BRISBANE and SYDNEY, instead finding no flight Syd to Cns between noon and 4pm.

    • Rocket

      says:

      Absolute rubbish, that’s something that exists no where else in the world. Besides, no interntatonal airline operates domestic sectors anymore and you can’t just have 100s of domestic passengers milling around in international terminals.
      The answer, if VA folds is to offer tax breaks for someone else to come in and take up the place (Ryannair or Air NZ with the Air NZ Express product, the latter would be my preference) or make Qantas divest itself of Jetstar, join it with Rex and nationalise a majority of Qantas so fares can be more easily regulated.
      Every example you gave (except Virgin Blue, which still exists, it’s called Virgin Australia) is ample evidence that without some element of government ownership and some smart regulation, Australia isn’t big enough for two major airlines. It never has been, the closest to us with that situation is Canada and they have 37M people in a country where air travel is essential like ours.

  • Monirul Sheikh

    says:

    QANTAS, the Australian brand is in big trouble. What will happen to it is similar to what happened to HOLDEN. It is time to let go the government share in Qantas and let it compete in int’l market. Let Qantas dictate it terms freehand. But Alan Joyce must go as he is just not the calibre what Qantas need. We need someone who truly understand the global aviation, like the one in Emirates, Tim Clark.

    • Rocket

      says:

      @ MONIRUL.

      You are completely wrong… Qantas is NOT OWNED BY the government, it hasn’t been for 26 years. It is a very strong and very large carrier with a stronger balance sheet and less debt than most of the airlines in the world. Airlines will fail, Qantas will not be one of them.
      Comparing it with Holden is just utter rubbish and shows you don’t know the facts. Holden once it was bought by GM in the 40s was NEVER an Australian company. Qantas has ALWAYS been and was only owned by the government for 45 of it’s 100 years.
      Please do some research and to use Tim Clark, what a complete joke. Emirates is TOTALLY STATE OWNED and is so efficient it’s being bailed out by the UAE. Qantas does not NEED a bailout, it just doesn’t want a poorly managed airline like Virgin get money when it has been mismanaged while Qantas has managed its finances very well, which would be totally unfair.

  • Mick

    says:

    Qantas was seeking Government assistance in 2014. I can’t recall Virgin threatening the Government not to come to their rescue.

    • Rocket

      says:

      No, that was an ambit claim, they wanted the restrictions on the 49% lifted (no more than 49% to be foreign owned, no more than 35% to be owned by foreign companies and no other airline to own more than 25%).
      They got most of what they wanted which was to remove all the restrictions within the 49% foreign ownership cap but the Commonwealth left the 51% ownership cap in place. It also opened the door for Qantas Domestic to be structured so it can be more than 50% foreign owned however I’m not sure that was approved.
      That was all the bail out demand was about, offsetting an alternative they didn’t want to get something they did want.

    • Rocket

      says:

      PS: Qantas’ request also came from Virgin being able to raise unlimited offshore capital as it had just acquired $300M from overseas. Virgin did object to Qantas getting a bail out and that’s why the offshore ownership limits were redrafted.

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Virgin asks for $1.4bn bailout, Qantas responds

written by Adam Thorn | March 31, 2020

Virgin Australia Group has asked the government for a $1.4 billion loan, according to reports that sparked a pause in trading on the ASX just before 10am on Tuesday.

The proposals would apparently see the government able to convert the package into ownership if it is not repaid in the next two to three years. The Sydney Morning Herald said a formal request was made last week, which also called for a broader $5 billion bailout for the industry.

However, Qantas has hit back with a “well-placed source” telling the government that, if its rival were to be bailed out, then the carrier would itself insist on a $4.2 billion loan to “level the playing field”.

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So far, the Deputy Prime Minister has unveiled a relief package for national and regional carriers worth more than $1 billion, though this is mostly a waiving of fees and levies.

A spokesman for the business told the SMH that while it would not provide details of the letter, a bailout would be “necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over”.

The Virgin Group later confirmed the speculation in a statement to the ASX at midday, saying it “continues to explore a range of options” including requesting financial support from the government “in the order of $1.4 billion”. It said it “may or may not” include conversion to equity.

A package of help would be controversial as the group is 90 per cent owned by foreign interests such as Etihad Airways, Singapore Airlines and the Virgin Group.

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Last Wednesday, Virgin Australia announced it was standing down 80 per cent of its staff and would increase domestic capacity reductions from 50 to 90 per cent. The next day, it confirmed 1,000 of the 8,000 suspended employees would be made permanently redundant, including all 220 Tigerair pilots.

On Friday, credit rating agency Standard and Poor’s downgraded Virgin Australia Group for the second time in a fortnight after its staff and capacity cuts.

S&P lowered the airline from B- to CCC, which it blamed on “cash flow and liquidity pressures”. However, it maintained the business was “fundamentally well managed”.

S&P said in a statement explaining its decision, “Virgin Australia’s previous $900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

A bailout is likely to infuriate Qantas, which has loudly urged the government to give the same help to both rivals.

Virgin Australia has five Boeing 777-300ERs in its fleet. (Louis Loizou)
A Virgin Australia Boeing 777-300ER (Louis Loizou)

So much so that Virgin Australia’s chief executive wrote to the competition watchdog to formally complain about Qantas’ recent attacks on his airline.

In the letter, Virgin’s Paul Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

57 Comments

  • Alessio

    says:

    Personally, I think that Qantas should just tone it down a bit. I do understand where Qantas I coming from, but in a time of crisis, we need to come together as an aviation community and help one another, not try and be the better one. If Qantas was helping and providing advice/support, it would look better on their part then what they are doing now. Hopefully, the situation becomes better and we can see these majestic aircrafts back in the air. (And hopefully, Qantas’s 747 before it retires!)

    • Rocket

      says:

      Than, not then and there’s no such word as ‘aircrafts’. The plural of aircraft is aircraft.

      Having said that, this is like two houses side by side. One owner never bothers to clean up their yard, their guttering and their insurance is not up to date. The other does all the right things.

      A once in a 100 year fire ravages both properties and both need rebuilding. The responsible owner claims on insurance, wears the cost of an excess and future increased premiums. The bad neighbour has the government repair his/her house, rebuild it and clean up the yard and they spend their money instead, on a 75 inch TV.

      If you think that is unfair then so is the situation in this article. It is fundamentally unfair that the staff suffer while the business has been run into the ground and mismanaged while execs continue to take bonuses. The other company, yes, high paid executives, but it’s profitable and there is a very serious question to be asked as to why a well managed business should be not given equal support so at the very least, they both emerge in the same shape as they went in and VA doesn’t come out stronger and Qantas weakened through no fault of it’s own.

    • Kevin

      says:

      The only reason Qantas have an issue with the loan is the equity clause. To them it’s like their parents are adopting a new child ? Qantas have never gotten over from being sold of by the government. Spoiled child behaviour ??‍♂️

  • SydDan

    says:

    In support of a loan, they’ve made big changes in the past 12 months to help save the airline.

    • Rocket

      says:

      We’ve heard it all before… ‘cash flow positive’ and all those weasel words to cover up the fact it’s been mismanaged.

  • Meeski

    says:

    Let the foreign parent companies throw more money into this black hole instead of wasting Australian taxpayer dollars.

  • Russell

    says:

    For god sake AJ needs to grow up yeh ok both airlines are struggling. QF has a lot more cash than VA or other lines for that matter so i think he needs to shut up and take what there given

    • Rocket

      says:

      Rubbish. So if you live next door to me and I always clean my yard and gutters and have insurance and you do none of those things, letting grass grow dry and 6 ft high, if a fire comes through why should I pay insurance and extra premiums and dip into savings to rebuild my property and you get yours fixed by the government and be rewarded for mismanaging your property?

      I do NOT want my taxes put into this foreign company without the Australian company being given the same support so they come out in the same positions they were in beforehand. It’s just not fair that VA get a leg up and if they do, it must come with equity and a total broom through the management.

      • Christopher Allan

        says:

        I like the way you think. One thing to consider though – given the astonishing losses that the Virgin group have sustained over the years, it’s unlikely their foreign investors have seen any profit heading their way for quite a while. As an employee at Tiger about to lose my job, what I have seen is job opportunities for thousands of Aussies, and those are in jeopardy. Foreign ownership has allowed me to keep my job since we were “rescued” by Virgin in 2011.

  • Dale

    says:

    Any Virgin Australia bailout by the Australian taxpayer should come in the form of equity compulsorily acquired from all foreign-owned stock in the airline. AUS$1.4B worth of Singapore, Etihad, Nanshan, HNA and Virgin Group equity on a pro-rata basis should be surrendered in return for any Government assistance. Although those major shareholders would probably jump at the chance to reduce their VA holdings right now!

    • John Geary

      says:

      Good idea. That way Virgin “Australia ” would be Australian.

      • james

        says:

        hold on Virgin is an australian flag carrier. Qantas is only 51% Australian.

        • Rocket

          says:

          No, Qantas meets the definition of Australian as it is majority Australian owned, in fact it’s sitting somewhere around 55-70% and has been for a while. About 8% of VA is freely held by Australian shareholders, 90% is owned by foreign governments through their State owned airlines. It’s the very definition of foreign owned. Back to maths class for you.

  • Josh

    says:

    How about Virgin gets the same assistance Qantas did, namely fifty years as a government-owned airline in a regulated environment, building it’s brand, network and assets at the taxpayers expense. Only then will it be a level playing field.

    • Dee Thom

      says:

      Agree. Governments, Alan Joyce, and others conveniently forget the merger of TAA and Qantas back in the 1980’s which was financed by the then Government, read taxpayers, and then sold off. Seems that VA is asking for a bit of help to stop QF from having a monopoly on air travel in Australia, to which I totally agree with.

      • Rocket

        says:

        @ DEE THOM

        Get your facts right. Qantas was floated in 1995, partially floated in 1992. It purchased Australian/TAA for $400M. The merger was just a euphemism. The government MADE Qantas purchase TN. They weren’t ‘merged’, Qantas had to buy TN and take on it’s debt which is one of the reasons it was renamed Qantas because they had to claw back the savings on a very expensive loan to buy the domestic airline.
        You think Ansett was better??? Well when you throw $$ at any produce with no regard for making a profit to the point where the airline collapses, sure, it’s going to feel better until the reckoning comes.
        Bottom line, stop conflating TAA with Qantas. TAA no longer exists, it was bought out by Qantas to secure a domestic market, AN was then awarded nearly every international set of traffic rights offered from then on to give them a foothold in international as well. AN was mismanaged all the way through the 80s and 90s and finally collapsed under the weight of an obscenely over-the-top price paid by NZ for 50%.
        It’s a pity some of the rhetoric and passion thrown at QF here wasn’t matched by an actual knowledge of facts and history.