Australian airline, Virgin Australia has reportedly called for a seven day-suspension of its trading shares. The airline, which is facing a potential shut down due to the ongoing COVID-19 crisis, appealed to the Australian Securities Exchange (ASX) to put a halt on its shares.
The company has already reached out to the federal government, asking for a loan of $1.4 billion. However, the ministers are still in discussion regarding the best way to boost the airline industry.
To that end, Virgin initiated talks with the ASX claiming that the discussions have continued for over two days and include deliberations that are incomplete and remain confidential.
The request for the seven-day halt comes along the heels of a previous appeal for a two-day halt by the airline.
Meanwhile, the government has declined the possibility of acquiring a stake in the company. Josh Frydenberg, Treasurer, has instead insisted on mobilizing company shareholders, including Singapore Airlines, Etihad Airways, Virgin Group, and others.
He has reportedly stated that while the government is keen on seeing Virgin continue its operations, airline ownership is not the line of business for the government. He further added that their focus is instead on offering support to the industry as a whole.
Mr. Frydenberg also commented on the government’s ongoing discussions with Virgin and Qantas, stating that it had already delivered over $1 billion worth of relief for the aviation sector.
The Australian Council of Trade Unions, however, has stated that the government must put its best efforts into preventing the collapse of an airline, bringing up an example of a similar move by Ansett over 10 years ago.
The union claims that the first support package offered by the government no longer suits the purpose. This is because most of it is for relief from fuel excise, which is of no help to airlines when their planes are grounded.
Virgin has currently suspended all domestic routes but one and has temporarily stood down nearly 8,000 workers. Furthermore, its credit rating has downgraded even further.
Source Credit: https://www.dailymail.co.uk/news/article-8223935/Virgin-Australia-suspends-trade-Australian-stock-exchange.html