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Victoria considered entering Virgin bidding war

written by Adam Thorn | April 22, 2020

A file image of Virgin Australia Boeing 737-800 VH-YIV featuring the split scimitar winglets. (Dave Soderstrom)
A Virgin Australia Boeing 737-800 VH-YIV featuring the split scimitar winglets. (Dave Soderstrom)

The Victorian government has admitted it considered joining an apparent bailout bidding war with Queensland and NSW to save Virgin in exchange for the airline relocating to Melbourne.

Victorian Treasurer Tim Pallas confirmed an earlier exclusive by The Age but then appeared to hint his state could still play a role in rescuing the business, which is now in administration.

On Monday, Queensland slapped down NSW after it offered a bailout to Virgin in exchange for shifting its headquarters from Brisbane to Sydney. At the time, Victoria said it wasn’t interested in joining the race.

However, on Wednesday, Pallas both admitted discussions took place and hinted an offer could still be made.

“We’ve looked at the Virgin proposition, but the first point I would make is it’s a federally regulated industry,” he said.


“The capacity to fly, load factors, are all dependent upon federal government policy around the aviation industry, so it was something we couldn’t control in effect and therefore may have put a level of risk the state would have to bear beyond the $500 million and could have cost considerably more.

“We would expect to see more jobs come to Victoria. We are almost exactly identical in size to Sydney and in practical terms, we don’t have a major domestic carrier based here and that strikes us as a little unreasonable.

“We will play our part but we are not going to bankroll essentially this company at the risk of considerable cost to the taxpayer.”

The Age’s original story suggested the Victorian government was in discussion with transport billionaire Lindsay Fox about a joint deal to help the airline, which collapsed into administration on Tuesday morning.

It followed a very public argument between NSW and Queensland, who became embroiled in a bidding war to save Virgin.

The row began on Saturday, when the Palaszczuk government offered Virgin a $200 million lifeline on the condition that other states also contribute and the business maintains its base in Brisbane.

However, the next day, NSW Treasurer Dominic Perrottet hinted that any contribution from its government would require the airline to move to Sydney, instead.

Finally, on Monday morning, Queensland angrily hit back, with State Development Minister Cameron Dick insisting the move would force 1,200 staff to move states to remain in a job.

“It’s a nonsense to think the Prime Minister would even consider a NSW plan to move the airline there,” he said.

Minister Dick then dramatically told NSW to “back right off” and said, “There is nothing more dangerous than Queenslanders with their backs to the wall.”

The airline group confirmed its collapse on Tuesday morning, after the announcement leaked the previous evening. The business was struggling to service a $4.8 billion debt pile with little revenue coming in.

On Tuesday morning, in a hastily arranged press conference with new Deloitte administrator Vaughan Strawbridge, chief executive Paul Scurrah revealed more than 10 parties have expressed interest in recapitalising the company.

Strawbridge also cited his determination to wrap up the process as quickly as possible, describing potential suitors as “very sophisticated parties”.

“We plan to run that process very hard with our advisers, in order to make sure that that process is as short a period of time as possible,” he said.

“We are calling for expressions of interest, which we expect we will receive within the next couple of weeks.

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Comments (16)

  • Rod Pickin


    Lindsay Fox and Solomon Lew? Haven’t we played that game before. Come on lads, stand back and let the expert administrators handle the matter, they have ALL the facts.

    • Alan Hume


      I agree. Get over this “State of Origin – Blues v Maroons” nonsense and let the professionals do their job.

  • Orus


    I live in Melbourne and it’s ridiculous to think that splashing out hundreds of millions (if not into the billions) on an airline bailout would actually boost the local economy. Sure there will be more jobs, but the economic benefits are easily outweighed by the cost. This money could be spent in other areas and yield more economic benefit but hey

  • Neil


    If the Federal Government was to be involved, which I doubt it should put it at Canberra International where the smart airport operator would locate it in their business park on airport.

    • Ken


      Canberra “International”? I suppose the ACT is a different country.

  • Ron Pickering


    Minister Dick then dramatically told NSW to “back right off” and said, “There is nothing more dangerous than Queenslanders with their backs to the wall.”

    Empty threats don’t work, mate; this ain’t primary school.

    It would be a travesty for Virgin Australia to not be saved. Qantas will monopolise the domestic market and charge ridiculous prices.

    • Kevin V Russell


      No one saved Compass. Or Impulse. Or Rex.



    How about Sir Richard Branson selling his island to help , and maybe come and live like us normal people. Stop asking our government for money when you have way more than most Australians

    • Tyron


      Branson/Virgin Group own just 10% of Virgin Australia … You expect him to salvage the competitive domestic aviation market for what? What kind of return do you think VA has paid out to him or any of the other shareholders over the last 10 years? Why do Australians expect these already stricken foreign shareholders to come to rescue of this doomed sinking ship while they stand idly by and watch it founder? These shareholders have essentially been subsidizing the Australian market for years for little to no return apart from strategic network connections. How critical is Australia’s regional development and tourism recovery post Covid to the government and general public?

  • Trevor Long


    Not certain that you would want to invest in a money loosing venture!

  • James


    Tax payer money used as a BS talking point! Maybe the socialist mindset forcing children into tax slavery for bragging rights should be punishable by stoning.

  • Monirul Sheikh


    VIRGIN and QANTAS, ultimately both will go down as these organisation are full of devils advocate, run by people who are primarily not ideal. Richard Branson is a blood-thrusty devil worshiper and so is our iconic Alan Joyce. Unless the business attitudes are corrected and destructive inside maneuvering by the major share holders are being put to rest, these great organisations are not here to last long, no matter how much effort we put into. That has to be natural death naturally who believes in ultimate! nature.

  • Peter


    Let them go, unless their foreign ownership pay!!!

  • Kevin V Russell


    Qantas obviously donate a lot more money to the Liberal party than does Virgin. We all know the way things are done in Australia. The history of the airlne industry proves it

  • john


    Have Lindsay Fox and Solomon Lew any experience in owning a successful airline?

  • Linda Weaving


    At least the Victorian government show actual concern for their constituents being ripped off.
    Unlike NSW, who are willing to throw any amount of taxpayer $$$ away if it means they can only get an airline interested in their Lemon airport in western Sydney. However, it seems that even the incompetent management who drove Virgin Australia into the ground were smart enough to go into administration rather than accept a NSW government bailout & relocate themselves to an airport out the back of Sydney suburbia, with a ‘catchment’ of tradies & housos, hours away from anything of interest to a tourist. I wonder if that will be enough to knock some sense into the politicians that building an airport in an inconvenient location does not create the greatest prospects of economic success? Probably not. They’re not known for being practical.

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