Virgin Australia entered voluntary administration just weeks ago, the Australian form of “going out of business”. But from the ashes a new phoenix appears likely to arise, with a variety of bids to reboot the business, including one from government. Could Virgin Australia 2.0 be back in the skies shortly? It sure looks like it.
May 15th Deadline
Prospective bidders have been told that “first offer” proposals for a new Virgin Australia 2.0 bid must be put in place by May 15th, and reports from 9 News Australia success Queensland itself is jumping into the mix. Dubbed “Project Maroon”, the Queensland Government has appointed the Queensland Investment Corporation to make a serious bid to buy Virgin Australia in a move centered around savings jobs in the region.
Speaking to press, Queensland Treasurer Cameron Dick stated…
“We have been very clear. Two sustainable, national airlines are critical to Australia’s economy. We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector.”
In the immediate days before the ultimate administration of Virgin Australia, a variety of Australian states bid to lure the airline to open headquarters outside of Queensland. Now, the state is fighting back, with a bona fide plan to not only retain a base, if Virgin Australia can live again, but directly own a stake.
So when could Virgin Australia live to fly again? Sources involved with the matter state it wouldn’t be out of the question to see announcement of a successful sale in the next month, by the end of June 2020. Deloitte has been appointed to handle the process a variety of consortium led bids are in the mix.
Notably, Velocity, the loyalty program of Virgin Australia is a separate entity, and is not effected by administration currently and therefore isn’t in administration. In the interim, the points program is still there, just without any realistic ways to cash in. With any hope, a successful rebirth of Virgin Australia will alleviate those woes.
The concept of an Australian state owning a large portion of an airline competing with Qantas is an interesting one, but the Queensland Investment Corporation cites previous example of where the group was able to divest itself from conflict, while returning value to outside shareholders. One thing we know: competition is good.