Virgin Australia Group’s chief executive is still optimistic he can secure a bailout for his airline despite Scott Morrison playing down the possibility on Thursday.
When confronted with questions suggesting the country won’t hand the business a proposed $1.4 billion loan, Paul Scurrah said, “That certainly hasn’t been the message we’ve been getting from the government. We’re continuing to work on that package.”
Earlier, the Prime Minister told reporters aid would only happen on a “sector-wide basis”.
On 31 March, later-confirmed reports emerged that the airline group was seeking a bailout that could be converted into ownership if it was not repaid in two to three years.
The speculation caused a halt to ASX trading.
So far, more than $1 billion of government money has been pledged to the aviation sector, but has been criticised for predominantly being a waiving of levies and fees.
Scurrah said allowing Qantas to operate a domestic monopoly would be a “disaster”, saying, “If we want to go back to year 2000s sales prices of Melbourne-Sydney for $800, then that’s what we need to be ready for.”
Both The Sydney Morning Herald and The Australian have reported in the last week that the government is divided on whether to bailout the beleaguered airline.
A majority supposedly oppose a deal, despite also maintaining the importance of having two major players in the domestic market.
The chairman of the Australian Competition and Consumer Commission (ACCC) has already publicly lent his support to Virgin.
Appearing on RN Breakfast on 2 April, Rod Sims said, “We desperately need two full-service airlines when this is over. Whatever the government does is fine by me.”
The ACCC is currently considering a complaint from Scurrah against Qantas, which has been furiously lobbying against a package for its rival.
Speaking to Sky News last month, Qantas chief executive Alan Joyce said, “It would be completely unfair to our sector. We’d be competing against the Australian government. Qantas couldn’t do that, it would be an unbalanced, uncompetitive environment.
“The government can’t pick winners and losers, the government has to be fair to every company. Whatever aid it’s giving to one company it must give to everyone in the sector.”
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