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Bidders need JobKeeper clarity, says Virgin administrator

written by Adam Thorn | June 10, 2020
Virgin Australia has announced unprecedented cuts (Australian Aviation archive)

Virgin’s administrator has written to the federal government to ask it to extend the JobKeeper program for another six months, according to reports.

The request, which Deloitte appears to have confirmed, also asks for a government-underwritten guarantee on ticket refunds and a continuation of the $715 million relief package which waived numerous fees and levies. It hinted the lack of reassurance is hampering a potential deal.

The news comes a week before the third deadline to decide the winning bidder for Virgin, which has already been whittled down to two parties: Bain Capital and Cyrus Capital Partners.

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Deloitte’s Vaughan Strawbridge said in a public statement released on Wednesday that he “wrote to government asking for clarification of their intentions regarding future and ongoing support for the aviation industry”.

However, it’s understood that clarification included asking for an extension to the JobKeeper package for the aviation industry ahead of its 27 September expiry.

Prime Minister Scott Morrison has previously promised the scheme will be reviewed at the end of June, and also hinted it could be extended to more vulnerable industries.

Yesterday, Australian Aviation reported how the TWU made the same demand. National secretary Michael Kaine said, “Aviation workers are crying out for certainty and are appealing to the federal government to urgently put in place ‘aviation keeper’ beyond September.

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“Through no fault of their own these workers have seen their jobs ground to a halt and the airports just about shut up. They deserve to know that the government intends to keep their vital industry afloat so they can continue paying their bills and supporting their families.”

Their intervention followed another by the Australian Federation of Air Pilots.

The JobKeeper package was introduced to provide coronavirus-affected businesses with $1,500 per employee, per fortnight.

The companies are then legally obliged to pass that payment onto workers in a bid to keep the economy active during the pandemic.

More generally, the scheme has proved problematic for much of the aviation industry.

Many airport workers are locked out of the financial package because their firms are council-owned; while staff at dnata were similarly told they were no longer eligible because their company is owned by a foreign government.

Later, it emerged a miscalculation meant the package came around $60 billion under budget.

Treasurer Josh Frydenberg said he accepted blame for the reporting error, which meant the aid package only cost $70 billion and covered 3.5 million Australians, rather than $130 billion and 6.5 million as forecast.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

11 Comments

  • Paul

    says:

    So let me see. I will take over this airline only if the govt keeps paying jobkeeper? You have to ask if these bidders are serious or only want the govt welfare? Either they have the funding or not.

  • Col

    says:

    Need clarity or they know the aswer but they dont like it

  • Edward

    says:

    If the two so-called ‘bidders’ for VA are SO, so wealthy, why do they need Fed Govt funds, ie Oz taxpayers’ hard-earned money, to keep it going?

    The unions’ should keep their noses’ out of it, too. They potentially cause problems’ always.
    The Aviation sector isn’t the ONLY one hurting. All businesses’ are. There’s nothing ‘special’ about them.
    This country’s National Carrier is QANTAS. It has, as usual, been managed well, & can ride out these pandemic effects. These idiots’ who scream about ‘high airfares’ haven’t a clue how airlines’ work. They only think of their hip pocket.
    There’re many ancillary areas’ of an airline, which actually contribute to an aircraft flying.

    Airfares’ will be kept low by QF, for a long time, to encourage people to fly, in first instance, Domestically.
    People should be grateful for that, instead of being in permanent whinge mode.

  • Dick Evans

    says:

    There are still thousands of Virgin Customers throughout the world who are awaiting full refunds, which Richard Branson has been holding onto for over 10 months. What is he doing with these millions of pounds. Mr Branson please pay back your valued customers now.

    • Graham Bell

      says:

      Richard Branson doesn’t own the airline so he is not holding on to their money ,I thought someone who is supposed to be following the aviation industry would know that

  • Meepa

    says:

    So the bidders have BILLIONS of dollars to bid on a debt ridden airline, and the taxpayers have to foot the bill for their employee’s? Can the arrogance of this be any more off putting, especially considering they just SACKED ALL of the Tigerair staff and the VANZ staff!!!! Virgin didnt even give a crap about those guys!
    I hope Indigo come in and start a new airline with Airbus’s and pick up all the Tigerair pilots and cabin crew and give the Australian people a real airline competition!

  • Jennifer

    says:

    The rest of the aviation industry workers need clarity too. When is the gov’t going to restart international flying? When are the borders going to open so at least some of us can get back to domestic flying?

    We are in this mess together. Don’t split hairs.

  • Rod Pickin

    says:

    I think it fair to say that we will see more “milking” attempts by the chosen two bidders, it is part of the process, not nice but true. I’ll even bet that there are heaps of talks going on as well between parties not even in the race at the moment, interested and all looking at slicing and dicing the VOZ prize that excites them; believe me it goes on and you may well be surprised by the outcome. A shame though that all parties are playing with peoples lives.

  • TD

    says:

    Surely Deloitte can guarantee ticket refunds with the new owners of Virgin without asking the Government (the Australian people) for it. What a hide.
    Either sell the Airline or stop carrying on. It’s like a game of poker….the ideal consortium of new owners aren’t going to hang around forever waiting for the snail paced money grabbing tactics which will lead to a piecemeal sale of assets and a new airline starting (by a previously potential bidder) poaching experienced staff who will still be waiting for what they are owed or a small portion of it. Let’s get on with it! Everything is in place just like before….it couldn’t be easier. Just some tweaking .

Leave a Comment

Your email address will not be published. Required fields are marked *

Bidders need JobKeeper clarity, says Virgin administrator

written by Adam Thorn | June 10, 2020
Virgin Australia has announced unprecedented cuts (Australian Aviation archive)

Virgin’s administrator has written to the federal government to ask it to extend the JobKeeper program for another six months, according to reports.

The request, which Deloitte appears to have confirmed, also asks for a government-underwritten guarantee on ticket refunds and a continuation of the $715 million relief package which waived numerous fees and levies. It hinted the lack of reassurance is hampering a potential deal.

The news comes a week before the third deadline to decide the winning bidder for Virgin, which has already been whittled down to two parties: Bain Capital and Cyrus Capital Partners.

Advertisement
Advertisement

Deloitte’s Vaughan Strawbridge said in a public statement released on Wednesday that he “wrote to government asking for clarification of their intentions regarding future and ongoing support for the aviation industry”.

However, it’s understood that clarification included asking for an extension to the JobKeeper package for the aviation industry ahead of its 27 September expiry.

Prime Minister Scott Morrison has previously promised the scheme will be reviewed at the end of June, and also hinted it could be extended to more vulnerable industries.

Yesterday, Australian Aviation reported how the TWU made the same demand. National secretary Michael Kaine said, “Aviation workers are crying out for certainty and are appealing to the federal government to urgently put in place ‘aviation keeper’ beyond September.

PROMOTED CONTENT

“Through no fault of their own these workers have seen their jobs ground to a halt and the airports just about shut up. They deserve to know that the government intends to keep their vital industry afloat so they can continue paying their bills and supporting their families.”

Their intervention followed another by the Australian Federation of Air Pilots.

The JobKeeper package was introduced to provide coronavirus-affected businesses with $1,500 per employee, per fortnight.

The companies are then legally obliged to pass that payment onto workers in a bid to keep the economy active during the pandemic.

More generally, the scheme has proved problematic for much of the aviation industry.

Many airport workers are locked out of the financial package because their firms are council-owned; while staff at dnata were similarly told they were no longer eligible because their company is owned by a foreign government.

Later, it emerged a miscalculation meant the package came around $60 billion under budget.

Treasurer Josh Frydenberg said he accepted blame for the reporting error, which meant the aid package only cost $70 billion and covered 3.5 million Australians, rather than $130 billion and 6.5 million as forecast.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

11 Comments

  • Paul

    says:

    So let me see. I will take over this airline only if the govt keeps paying jobkeeper? You have to ask if these bidders are serious or only want the govt welfare? Either they have the funding or not.

  • Col

    says:

    Need clarity or they know the aswer but they dont like it

  • Edward

    says:

    If the two so-called ‘bidders’ for VA are SO, so wealthy, why do they need Fed Govt funds, ie Oz taxpayers’ hard-earned money, to keep it going?

    The unions’ should keep their noses’ out of it, too. They potentially cause problems’ always.
    The Aviation sector isn’t the ONLY one hurting. All businesses’ are. There’s nothing ‘special’ about them.
    This country’s National Carrier is QANTAS. It has, as usual, been managed well, & can ride out these pandemic effects. These idiots’ who scream about ‘high airfares’ haven’t a clue how airlines’ work. They only think of their hip pocket.
    There’re many ancillary areas’ of an airline, which actually contribute to an aircraft flying.

    Airfares’ will be kept low by QF, for a long time, to encourage people to fly, in first instance, Domestically.
    People should be grateful for that, instead of being in permanent whinge mode.

  • Dick Evans

    says:

    There are still thousands of Virgin Customers throughout the world who are awaiting full refunds, which Richard Branson has been holding onto for over 10 months. What is he doing with these millions of pounds. Mr Branson please pay back your valued customers now.

    • Graham Bell

      says:

      Richard Branson doesn’t own the airline so he is not holding on to their money ,I thought someone who is supposed to be following the aviation industry would know that

  • Meepa

    says:

    So the bidders have BILLIONS of dollars to bid on a debt ridden airline, and the taxpayers have to foot the bill for their employee’s? Can the arrogance of this be any more off putting, especially considering they just SACKED ALL of the Tigerair staff and the VANZ staff!!!! Virgin didnt even give a crap about those guys!
    I hope Indigo come in and start a new airline with Airbus’s and pick up all the Tigerair pilots and cabin crew and give the Australian people a real airline competition!

  • Jennifer

    says:

    The rest of the aviation industry workers need clarity too. When is the gov’t going to restart international flying? When are the borders going to open so at least some of us can get back to domestic flying?

    We are in this mess together. Don’t split hairs.

  • Rod Pickin

    says:

    I think it fair to say that we will see more “milking” attempts by the chosen two bidders, it is part of the process, not nice but true. I’ll even bet that there are heaps of talks going on as well between parties not even in the race at the moment, interested and all looking at slicing and dicing the VOZ prize that excites them; believe me it goes on and you may well be surprised by the outcome. A shame though that all parties are playing with peoples lives.

  • TD

    says:

    Surely Deloitte can guarantee ticket refunds with the new owners of Virgin without asking the Government (the Australian people) for it. What a hide.
    Either sell the Airline or stop carrying on. It’s like a game of poker….the ideal consortium of new owners aren’t going to hang around forever waiting for the snail paced money grabbing tactics which will lead to a piecemeal sale of assets and a new airline starting (by a previously potential bidder) poaching experienced staff who will still be waiting for what they are owed or a small portion of it. Let’s get on with it! Everything is in place just like before….it couldn’t be easier. Just some tweaking .

Leave a Comment

Your email address will not be published. Required fields are marked *

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