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.
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.
“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.