Coronavirus: Virgin Australia forced into trading halt amid pandemic

Virgin Australia has gone into its second trading halt as the airline desperately seeks ways to stay afloat amid the COVID-19 pandemic.

Virgin Australia has entered into a trading halt following a board meeting with the airline’s international shareholders.

It’s the second time this month the airline has alerted the ASX to suspend trading.

The decision follows growing pressure for the Federal Government to provide financial assistance to the struggling airline, which has grounded almost its entire fleet and stood down thousands of workers because of the coronavirus pandemic.

Earlier this month, Virgin Australia chief executive Paul Scurrah requested $1.4 billion in financial support from the Morrison Government to survive the fallout from the coronavirus crisis.

In a statement sent to news.com.au, a spokesperson for the airline said the halt was in response to ongoing conversations amid the COV-19 crisis.

Virgin Australia has entered their second trading halt this month amid ongoing issues with respect to financial assistance. Picture: AAP Image/Darren England.

“Virgin Australia has requested a trading halt as it continues to consider ongoing issues with respect to financial assistance and restructuring alternatives,” the statement read.

“This has arisen due to the unprecedented COVID-19 crisis which has particularly impacted the aviation sector.

“We value the ongoing support of our customers. Virgin Australia has been keeping the air fair in Australia for 20 years and we want to continue to provide a valuable service to all Australians, the 16,000 people employed directly and indirectly, and enable the broader economy to restart quickly once we emerge from this crisis.”

On Monday, Deputy Prime Minister Michael McCormack told the ABC that discussions were continuing with the airline, with Mr Scurrah warning Australia’s economy would suffer significantly if the airline collapsed.

“They’re having discussions with their own shareholders about how they can raise capital and we’ll continue our discussions,” Mr McCormack said.

“I’m not ruling anything out.”

Both Qantas and Virgin have copped a battering during the coronavirus crisis and there are fears Virgin could soon go into administration.

Prime Minister Scott Morrison said any public funding for aviation would be spread across the entire sector.

“We haven’t been picking any winners or picking any favourites here,” he told Nine.

“What we have been doing is ensuring sector-wide support, which has been already quite significant for the aviation sector.” The government has already confirmed it will provide financial support for regional routes and stump up $100 million to address the cashflow crisis among a dozen small airlines.

Both Qantas and Virgin have copped a battering during the coronavirus crisis. Picture: AAP Image/Darren England.

Labor has welcomed plans for the government to cover the cost of some trunk routes, but said it would not be enough to save Virgin from going broke. Opposition transport spokeswoman Catherine King said thousands of Australian livelihoods were at stake.

“The Morrison government must stop this piecemeal approach to our aviation industry and actually extend an urgent lifeline to Virgin Australia to support the airline and its 10,000 employees through this crisis,” she said.

“If Scott Morrison and Michael McCormack do not, they are making an active decision to see one of our major airlines fail.

“Such a result will have a devastating impact on Virgin’s employees and on our tourism, freight and services sectors, and will slow our recovery once the COVID-19 outbreak passes.”

More to come.