Qantas shares spiked within minutes of Virgin Australia entering voluntary administration on Tuesday morning – but have subsequently slumped after interest grew in acquiring its rival.
Shares in the national flag carrier peaked at $3.79 at 10am on 21 April, close to its biggest peak in six weeks, but are now trading at just $3.34.
Virgin Australia confirmed its collapse into administration on Tuesday morning after struggling to service a $4.8 billion debt pile with little revenue coming in.
After the announcement, Deloitte administrator Vaughan Strawbridge and Virgin chief executive Paul Scurrah revealed more than 10 parties have expressed interest in recapitalising the company, which they described as being “very sophisticated parties”.
Later, Melbourne Airport and the Victoria government seemingly joined a growing list of states to enter a bailout bidding war to tempt a reborn Virgin to relocate.
Speaking to The Australian Financial Review on Thursday morning, the airport group’s chief executive, Lyell Strambi, said Virgin Australia should make the Victorian capital the cornerstone of its new network.
“That doesn’t necessarily have to mean corporate HQ, though it certainly could,” he said. “If a lean, fitter, stronger Virgin wants to rebuild, Melbourne has to be at the heart of the plan.”
For more of our in-depth coverage on Virgin’s administration, click the links below:
- Velocity Frequent Flyer points have been paused, but won’t be cancelled;
- Sir Richard Branson hits out at the Australian government as he pays tribute to Virgin staff;
- The TWU and opposition urges the government to make a ‘bold’ move to save the airline;
- Virgin’s administrator, Deloitte, insisted there are ‘several’ interested parties in the running to save the business, thought to include BGH Capital, a private equity operator run by Ben Gray.