Commonwealth Bank takes back Virgin plane

CBA has temporarily been forced into the unfamiliar role of aviation operator after taking back an aircraft leased to Virgin.

An ex-Virgin Australia A330 stripped of its livery, is back with owner the Commonwealth Bank. Picture: Supplied

Commonwealth Bank has taken back an aircraft leased to Virgin Australia as administrators prepare to finalise the sale to Bain Capital.

An A330 stripped of its Virgin Australia livery was photographed leaving Melbourne on Tuesday, under “operator” Commonwealth Bank.

The flight came as administrator Vaughan Strawbridge of Deloitte, filed documents in the Federal Court seeking the transfer of all 8.5bn shares in Virgin to Bain.

The US private equity firm has committed $3.5bn for the sale, triggered by the decision of Virgin Australia’s board to place the airline into voluntary administration six months ago.

At the time, the airline had debts of $7.1bn.

According to Mr Strawbridge’s affidavit, the share transfer needed to take place by November 30 at the latest, or Virgin Australia would be liquidated.

Either way, there would be no return to the 19,181 shareholders including Etihad Airways, Singapore Airlines, Nanshan, HNA and the Virgin Group, he said.

Despite the November 30 deadline, Mr Strawbridge said an earlier date was preferred to complete the transaction to allow Virgin Australia to emerge from administration.

The tentative legal milestone came as a former Virgin A330, left with only the trademark red rings on its engines, headed off from Melbourne Airport.

Operated by Commonwealth Bank of Australia, the flight was headed to Kuala Lumpur in Malaysia but it was not clear if that would be its final destination.

The aircraft was one of six A330s leased by the airline, of which four remain parked at airports around the country while another is in storage at Toowoomba’s Wellcamp Airport.

Under Bain, Virgin Australia is moving to an all Boeing 737 fleet, of between 30 and 60 aircraft, which could eventually include new Boeing 737 Max 8 and 10 aircraft.

Prior to administration the airline had 48 of the controversial aeroplanes on order, the first of which was due to be delivered in July 2021.

It’s understood discussions around Virgin’s order are continuing.

Once the transfer of shares to Bain is finalised, CEO Paul Scurrah will depart the airline to make way for former Jetstar boss Jayne Hrdlicka.

Employees were informed of the decision to remove Mr Scurrah in favour of Ms Hrdlicka last week, causing widespread anger among the workforce following undertakings by Bain not to change the management team.

The popular leader made a significant personal investment in the airline, in his 18-months at the helm, splashing out almost $300,000 on shares, in a show of confidence in the carrier.

The last purchase was made in early March when Virgin Australia shares were trading at 10.5 cents.

According to court documents, the airline was insolvent just two weeks later due to substantial capacity reductions due to COVID-related travel restrictions, and the inability to access further debt or equity funding.

A Federal Court hearing on the application for the transfer of shares, has been set down for November 10.