Coronavirus Gold Coast: Virgin collapse would be devastating for city’s tourism economy

Virgin teeters on a knife-edge and the Federal Government has ruled out a bailout. Where does that leave the Gold Coast, which relies heavily on the carrier?

QUEENSLAND Airports Ltd CEO Chris Mills says the survival of embattled airline Virgin is vital to the Gold Coast recovery from the coronavirus crisis.

Mr Mills said the collapse of the carrier would see far fewer flights decimating incoming visitation and a spike in ticket prices.

He was hopeful either the Federal Government or private sector would come to the party and help Virgin which has $5 billion in debt.

The government has not agreed to a $1.4 billion bailout requested by Virgin.

Chinese Government-owned airlines are in talks to snap up Virgin, sources have told News Corp. The Queensland Government has also offered $200 million to the airline on the condition it stays headquartered in Brisbane in a bid to draw out other government funding support.

Virgin is struggling to survive. Picture: Angie Basdekis

“From an Australian perspective and from a Gold Coast perspective, when we come out of this crisis we need two strong airlines to support the tourism industry,” Mr Mills said.

“Tourism benefits from competition in airfares. I’ve never heard of anyone complaining about too much competition.

“Clearly, there’s a market segment for the Gold Coast which would drop away immediately (if Virgin collapses).

“From a Gold Coast Airport perspective you would see a significant reduction in capacity for a period of time.”

Mr Mills said the collapse would reverberate nationally.

“Across the Australian network it would have a significant impact on domestic capacity. You’re taking 30-40 per cent of the capacity – depending on which part of Australia you’re in – out of the network,” he said.

Destination Gold Coast CEO Annaliese Battista has already written to Federal Government, saying the city tourism economy was “inextricably linked” to having two viable carriers.

She told the Bulletin yesterday having competition between carriers meant “far more seats available for passengers to visit” and “it keeps prices down”.

“Certainly, our market is one that is very price sensitive,” she said.

Queensland Airports Ltd CEO Chris Mills. Photo: Steve Holland

“The challenge we face now is not just about tourism on the Gold Coast. It’s the Gold Coast economy, community and our ability to basically save the city from years and years of economic repression,” she said.

Before the pandemic grounded flights, 46 per cent of inbound domestic visitors arrived on Virgin via Brisbane and Gold Coast airports. They injected $1.93 billion into the city’s economy.

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Meanwhile, New Zealand Deputy Prime Minister Winston Peters has suggested Australia and his country could open borders to each other in a “trans-Tasman bubble”.

Mr Mills backed Mr Peters’ idea and said: “It just makes sense.”

He said New Zealand was the Coast’s second biggest international market after China.

“When you consider that the Gold Coast last year had 275,000 Chinese visitors and 212,000 Kiwi visitors, that’s not a long way behind. It’s a huge market,” he said.

Destination Gold Coast CEO Annaliese Battista. Picture: Jerad Williams

“We’ve got a geographic advantage that means you could create a trans-Tasman border zone. You could virtually make that a domestic experience and open it up.”