Also consigned to history will be one of Australia’s most expensive and ill-conceived strategies for an airline.
Virgin Australia was a financial disaster and much of it can be attributed to the capacity war former chief executive John Borghetti undertook with Qantas a decade ago.
It lost more than $1 billion in a handful of years and at the end it owed $7 billion to its creditors. Last year it posted a $349 million loss and cut 750 staff so the end was visible.
Its shares tanked and shareholder funds evaporated. It listed at $2 in 2003 and before the plug was pulled earlier this year it was trading at 8 cents, supported by overseas airlines that owned the majority of shares.
Under Borghetti’s control, Virgin lost a total $997.9 million and its share price has lost two-thirds of its value.
The capacity war with Qantas was judged a failure mostly because Qantas was able to restructure and restore its earnings. Virgin didn’t.
COVID-19 may have been the last straw, but Virgin’s continued existence was under threat well before the Wuhan outbreak.Jump to next article