Virgin Australia wants $1.4 billion bailout to keep flying

Qantas has demanded a multi-billion dollar bailout if competitor Virgin receives financial support from the Government amid the coronavirus crisis.

Virgin Australia has released a statement to the ASX confirming reports it’s seeking $1.4 billion bailout from the government to help it get through the coronavirus pandemic. …

Australian airline Qantas has reportedly requested a loan from the Federal Government to the tune of $4.2 billion if rival airline Virgin Australia receives a $1.4 billion rescue package.

The airline’s request comes as Virgin Australia seeks financial support from the Morrison Government to survive the fallout from the coronavirus crisis.

According to the Herald, Qantas Group boss Alan Joyce said it would be “completely unfair” if the Government were to financially assist one airline and not the other.

According to the publication, a bailout would “level the playing field” and the package should be relative to the size of each business. Because Qantas is three times larger than Virgin Australia, their bailout – if granted – should reflect the difference.

Earlier today, The Australian reported Virgin Australia wanted a rescue package of up to $1.4 billion from the Government; however, the airline is yet to confirm the exact amount or nature of any potential bailout. It could involve the Government becoming a part-owner.

Following the report, Virgin Australia went into a trading halt pending a further announcement to the ASX at noon on Tuesday.

Treasurer Josh Frydenberg declined to comment on any “specifics” of said bailouts, saying “we support strongly, the aviation industry”.

“I’ve been in close contact with leaders of the business community including the aviation sector (Virgin boss) Paul Scurrah and (Qantas chief) Alan Joyce,” he told ABC radio.

“But we have already illustrated our commitment to having a viable, sustainable aviation sector with more than $700 million in fees being waived.”

Mr Frydenberg said the transport of freight and people was important to the economy.

“We’ll continue that dialogue with key stakeholders,” he said.

The airline recently cut its workforce by 80 percent and its capacity by 90 percent.

Global credit rating agency Fitch on Monday put Virgin Australia on rating watch negative, citing a drop in demand in the aviation market due to the coronavirus.

News.com.au has contacted the Qantas Group for comment. www.news.com.au