One of the largest airlines worldwide, Virgin Australia has apparently declared that it has gone into voluntary administration. This effectively makes it the largest airline so far, to have succumbed to the pressure initiated by the ongoing global pandemic.
As per sources familiar with the knowledge of the matter, the company has handed over the keys to the administrators, however it plans to keep operating flights. Reportedly, the airline was in debt of more than AUD 5 billion, on account of which it had appealed for a loan of around AUD 1.4 billion in order to continue functioning. However, the government apparently had refused to bail out the company.
Paul Scurrah, CEO, Virgin Australia, has been quoted to state that the firm’s decision has been taken keeping in mind the intention to secure the future of the airline and emerging successful post the pandemic. The airline will continue to operate, it’s a tough day but not the end of the world, Scurrah added.
Reports claim that over 90 per cent of the shares of Virgin Australia are controlled by an investor consortium inclusive of Etihad Airways, Virgin Group, owned by billionaire Richard Branson, China-based HNA Group, and Singapore Airlines, all of which have been experiencing a deterioration in revenues on account of the ongoing pandemic.
As per official sources, the company states that the current management team, led by Mr Scurrah, will continue to run the firm and will still be operating the scheduled domestic and international flights in order to help transport frontline workers, return Australians home, and maintain freight corridors.
For the record, Virgin Australia employs around 10,000 people directly and close to 6,000 people indirectly, in competition with the known rival Qantas Airways. Experts claim that the latter is likely to have a virtual monopoly in Australia in the event that Virgin stops flying. Apparently, shares of Qantas rose 7.2% on Tuesday, to its highest level since March 12, prior to falling back to 1.4 per cent in afternoon trade.