Virgin Australia in it for the long haul, vows CEO

Management and staff alike are confident Virgin Australia’s company culture means it won’t suffer the same fate as Ansett as its boss says the country’s second-largest airline will rise from the ashes to become Qantas’s strongest-ever competitor.

VIRGIN Australia boss Paul Scurrah says the country’s second-largest airline will rise from the ashes of voluntary administration to become Qantas’s strongest-ever competitor.

Just hours after formally putting Virgin in the hands of accounting giant Deloitte, an upbeat Mr Scurrah scotched suggestions the debt-laden carrier would fail, and talked up plans to keep its planes in the skies, protecting its 10,000 employees, frequent flyers and ticketholders.

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“This is a tough day for our airline, but it’s certainly not the end, we’re certainly not collapsing,” he said.

Virgin Australia confirmed it had gone into administration yesterday, but the airline has no plans to follow Ansett into the graveyard. Picture: Dan Himbrechts/AAP

With more than 10 potential investors hovering over the airline’s books and its $5 billion debt hole, administrators were confident of restructuring Virgin into a leaner operation within months.

And the Federal Government – which does not want to set a precedent bailing out private companies, especially ones with majority foreign shareholdings – appointed former Macquarie chief executive Nicholas Moore to work with Virgin and Deloitte to find a market-led solution.

Treasurer Josh Frydenberg, who did not discuss the move with either company before the announcement, said Mr Moore’s No.1 job was to engage with administrators to ensure two major commercial airlines operated on domestic routes.

“This is not liquidation. This is not Ansett. This is not the end of the airline,” he said.

Virgin’s popular Velocity Frequent Flyer program, which is a separate business and not entered into administration, was put on a four-week pause yesterday.

Most of Virgin Australia’s fleet remains grounded on tarmacs around the country as the company was put in voluntary administration yesterday. Picture: David Mariuz/AAP

Administrator Vaughan Strawbridge said all frequent flyer points would be preserved and their expiration period extended.

He could not guarantee customer credits in the long term, but said they all currently applied and could be used for new bookings.

Current bookings were also planned to be honoured while the airline continues flying a reduced schedule underwritten by the Federal Government and once borders reopen.

He said there were no plans for redundancies and the company’s 10,000 employees would keep getting paid wages and the JobKeeper payment.

“Hopefully we can maintain all the jobs or as many as possible coming through this process,” he said.

Mr Scurrah, who will still lead Virgin’s operations during the restructuring, revealed the airline made eight proposals for a federal government cash injection, whittling down the original request of $1.4 billion to $200 million on Monday.

But when the Government rejected that offer, the airline had no choice but to enter administration, he said.

“We didn’t trade our way into this problem we had our oxygen supply completely cut off,” he said.

Virgin Australia Group Chief Executive Officer Paul Scurrah. (AAP Image/Joel Carrett)

Opposition Leader Anthony Albanese called on the Government to fight harder to save Virgin and protect up to 16,000 jobs linked to the airline, saying it would be an investment with a return in jobs and future economic growth.

“The consequences … if you take out Virgin Australia from regional flying, particularly in a place like Queensland, it will have significant impacts on employment growth in those regional cities,” he said.

Flight manager Jeremy Longton, 36, and his fiancee Cara Evans, 28, have collectively worked for Virgin for 19 years.

The couple, who met at work, were stood down in response to the pandemic but still consider the company their family.

“The good thing about the Virgin culture is that there is a really good leadership structure and everyone is supportive of one another,” Mr Longton said.

“It’s bigger than just a business, and I think that’s why you’re seeing people come out so passionately to support it.”

Mr Longton said he knows dozens of Queensland families where multiple people worked for Virgin.

“That’s one of the biggest challenges I think a lot of families will face, that both livelihoods are with the one organisation,” he said.

“A lot of hype has been created by the media that it is a foreign-owned company which has pushed a bit of a negative sentiment to Virgin unfairly.

“They employ 10,000 direct employees, 6000 contractors, plus all of the jobs that are created through tourism not only in tourism but around Australia.

“It’s still an Australian business because it operates within Australia and supports Australian livelihoods.”

Mr Longman has secured part-time work at Woolworths but hopes he and his partner will return to normality soon.

“It’s been a shock to the system,” he said.

“We used to meet a lot of different customers every day, looking after our own people and transporting them around the country is a real privilege and we would really look forward to doing that again once the pandemic lifts and we can get back in the air.”

Originally published as Virgin Australia in it for the long haul, vows CEO