Virgin Australia Enters Administration

Virgin Australia have entered voluntary administration.

However, it must be said right from the start that this doesn’t necessarily mean that the airline is gone for good. As it stands, the airline is still operating – although like most airlines, it’s at a much reduced rate. Since 25th March, the airline has been operating to just 17 destinations. Most of these flights have been carrying freight.

What will happen over the coming weeks is that an administrator will be appointed to see what changes can be made to the airline. It can either be broken up, kept in tact or sold. As part of the administration process, some of the airlines debt would be wiped and aircraft leases renegotiated.

Much like Virgin Atlantic based in the UK, Virgin Australia was hoping for a government bailout. However, the A$1.4billion the airline asked for hasn’t materialised.

Virgin Australia Boeing 737

What is likely to anger bosses at the airline is that fellow Australian carrier Qantas looks likely to get a bailout. The suspected reasoning behind this is due to the fact that Qantas is Australian owned. Where as Virgin Australia are mostly foreign owned.

There is one lifeline for the airline though. The Queensland government previously offered A$200million. Although this was contingent on the airline maintaining their base in Brisbane. With debts of A$5billion, this wasn’t anywhere near enough. Although that agreement would mean Virgin Australia would be able to operate 64 return services per week and return 200 employees to work.

History

The airline was founded as Virgin Blue in 2000. After the collapse of Ansett Australia, the airline quickly became a major player in the region.

Despite initially launching as a low cost carrier, the airline slowly moved into being a full service carrier. This included adding a dedicated business class cabin and opening lounges at a number of airports throughout Australia and New Zealand.

Over the following years a number of sister airlines were formed. By 2012, Virgin Blue, Pacific Blue, Polynesian Blue and V Australia were all rebranded under the Virgin Australia brand.

In 2013 the airline purchased SkyWest and rebranded it as Virgin Australia Regional Airlines. This saw a number of Fokker F100 and Airbus A320’s painted into the all white livery.

Fleet wise, Virgin Australia currently operates:

  • 6x Airbus A330-200
  • 8x ATR72-600
  • 2x Boeing 737-200
  • 77x Boeing 737-800
  • 5x Boeing 777-300ER

It also currently has orders for 48 Boeing 737 MAX aircraft.

Going forward, the airline could be split up much like it was previously. The long haul operation could be separated from the domestic. Another division could be created to operate to New Zealand, much like how Qantas currently operate. Virgin Australia Regional and Tiger Air could be sold off or closed.

Either way, the job of the administrators is to figure out the best way for the airline to get out of its debt and trim what’s not needed.

Virgin Australia Embraer E190

Flying Virgin Australia between Melbourne-Sydney-Brisbane in 2014

https://www.virginaustralia.com/uk/en/

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