What will the collapse of airline Virgin Australia mean to the cost of air travel in the NT?

WHAT will the collapse of airline Virgin Australia mean to the cost of air travel in the NT? We ask the industry experts

Grounded Virgin Australia aircraft parked at Brisbane Airport. Picture: Darren England

THE collapse of airline Virgin Australia won’t lead to a massive spike in flight prices in the Top End, according to industry experts, though the sector’s post-pandemic bounce back will require stiff competition.

The carrier pulled all its NT services in late March amid tightening coronavirus shutdown measures, and its permanent exit would leave Qantas and subsidiary Jetstar as the only major domestic flight provider here.

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Virgin Australia was placed in voluntary administration today.

But the company’s boss Paul Scurrah said it was “not the end” for Australia’s second largest airline and he believes it will come out stronger from voluntary administration.

The Federal Government is holding firm against Virgin’s pleas for the bailout, with Treasurer Josh Frydenberg instead putting pressure on the company’s shareholders.

‘This is not the end’ ... Virgin Australia Group Chief Executive Officer Paul Scurrah saddresses the assembled media today. Picture: Joel Carrett

But the loss of the airline in the Northern Territory flight market, leaving Qantas as the only major domestic provider, won’t lead to an unprecedented spike in prices industry experts say.

Strategic Aviation Services chairman Neil Hansford said this was because national competition watchdog, the Australian Competition and Consumer Commission, would be on the Flying Kangaroo like a rash and it was more than likely another airline could fill the void left by Virgin to keep prices competitive.

An ACCC spokeswoman would not comment specifically on Virgin but said it was “important that we maintain a competitive economy coming out of the pandemic, if we are going to have a fast recovery.”

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Australian Tourism Industry Council executive director Simon Westaway said there had been “unfair commentary” about what would happen if Qantas obtained a monopoly.

“We do think it is important to have competitive airfares to any destination, we also think that it’s important for airlines to have sustainable business models otherwise they can’t offer those ,” he said.

Mr Hansford said the airline, hose major shareholders include Singapore Airlines and Etihad Airways, had been unsustainable for years, pointing at seven years of financial losses totalling more than $1 billion that left the carrier with little breathing room last month when the COVID-19 pandemic grounded flights.

Treasurer Josh Frydenberg said today that taxpayer dollars would not be used to bail out Virgin Australia but that doesn’t mean the company will suffer the same fate as collapsed airline Ansett.

“Our objective is a market-led solution,” Mr Frydenberg said.

“Our objective is two commercially viable, major domestic airlines operating in Australia ...”

Mr Frydenberg said the voluntary administration was an opportunity for Virgin to recapitalise and “come out stronger on the other side of the coronavirus crisis”.

“This is not liquidation,” he said.

“This is not Ansett. This is not the end of the airline.”