Virgin Australia Holdings Ltd on Tuesday succumbed to third-party led restructuring that could lead to a sale, making Australia's second-biggest airline the Asia-Pacific region's biggest victim of the coronavirus crisis gripping the industry.
) on Tuesday succumbed to third-party led restructuring that could lead to a sale, making Australia’s second-biggest airline the Asia-Pacific region’s biggest victim of the coronavirus crisis gripping the industry.
Virgin reported an annual loss for seven consecutive years even before authorities worldwide began restricting movement to slow the spread of the virus, which has led to around 70 deaths in Australia. It nevertheless commanded a secure share of Australia’s normally lucrative domestic aviation market before calling in administrators with debt of A$5 billion .
“Generally you get the best outcome where you sell it as a whole, so that is definitely the preferred approach,” Strawbridge told reporters on a teleconference. Administration is Australia’s closest equivalent to the Chapter 11 bankruptcy provisions used to restructure companies in the United States. Virgin employs 10,000 people directly and 6,000 people indirectly. It competes with larger rival Qantas Airways Ltd , which would have a virtual monopoly in Australia if Virgin stopped flying. Qantas’ share price jumped as much as 7.2% on Tuesday to its highest since March 12 before the gain narrowed sharply to 0.3% in afternoon trade.
Strawbridge said the airline was seeking talks with Boeing about the future of its order for 40 737 MAX planes. The model has been grounded globally for over a year after two fatal crashes.
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