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Come together, link arms: Virgin boss leads desperate final rescue bid

Business

Virgin Australia chief executive Paul Scurrah has called for “rivalry” to be put aside and for the Federal Government and the community to step in and back Virgin in the national interest.

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On Friday morning, with private equity firms circling as part of a possible takeover of Virgin, there were last-ditch pleas from a roundtable, with unions, academics, super industry representatives and politicians including former treasurer Wayne Swan, for the Government to help save the struggling airline.

All participants urged the Government to step in and take an equity stake in the company, which is struggling to refinance a $5 billion debt pile, rather than leave it to the private market to deal with.

If Virgin cannot get shareholder or Government support, the company could soon enter into voluntary administration.

Scurrah, who has repeatedly asked the Government to help the company with a $1.4 billion loan, said he was limited in what he could say while the company was in a trading suspension, but called for all players to “come together and link arms” in order to save the company from collapse.

“This is a national crisis, it’s a global crisis, it’s a crisis that this industry has never seen before,” he told roundtable participants, including journalists, in a Zoom meeting.

“Rivalry should be put aside and the national interest should come first.

“We should make sure that the industry gets through this together,” he said, noting that aside from Virgin’s own 10,000 workers, thousands of Australian workers in supply chains also relied on the company’s survival.

“Let’s come together and link arms … so we can actually do the right thing by the country.”

Virgin’s chief operations officer Stuart Aggs spoke directly after Scurrah, reiterating how crucial it was for the Government to throw the company a lifeline as it was now fighting to survive on a “day-to-day basis”.

“We are clearly in crisis mode. We’re an airline under significant scrutiny on almost an hourly basis,” he said.

“Competition is important in the industry.”

Shame to lose what Virgin has built: chief operating officer

Aggs, who has worked in the airline industry for 20 years, most of which has been at Virgin, said because of the trading suspension, the company’s management was limited in the amount of information it could provide its concerned staff.

He said they were getting several emails from team members every day, but could only provide “vague answers”, which was “very frustrating for them and very frustrating for us”.

He said when Ansett collapsed it took Virgin Blue (now Virgin Australia) more than 20 years to establish itself as a true full-service airline competitor to Qantas.

Virgin Australia still now only held about a 30 per cent share in Australia’s aviation market and was struggling to get hold in key corporate markets, which Qantas dominated.

Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be “an absolute shame” to let them go.

In his 16 years employed with Virgin, he had seen airlines make various decisions — “some of them crazy” — but it still would be a shame to lose what Virgin had built up.

On Thursday night the Federal Government announced up to $165 million in support to enable Qantas and Virgin Australia to service key metropolitan and regional routes over the next two months.

Virgin, which had suspended domestic flights last week, said the new schedule would enable it to reinstate 200 staff, including pilots, cabin crew and ground staff.

The extra government funding came after the aviation industry argued that an earlier $1 billion industry support package did little to help the sector because $715 million of it was made up of waiving certain fees that were not charged when planes were grounded.

– ABC / Nassim Khadem

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