Virgin Australia shares hit record low
The share price represents an 82 per cent decline in the past decade from 75c in March 2010.
Virgin Australia shares hit a record low of 13c a share, after falling 10.3 per cent in a day.
The worrying plunge followed last week’s decision by the airline to pull out of Hong Kong because of ongoing load factor struggles exacerbated by the coronavirus.
The last Melbourne-Hong Kong service operated on Tuesday and Virgin Australia will cease Sydney-Hong Kong flights on March 2.
The share price represents an 82 per cent decline in the past decade from 75c in March 2010, and will even hit the hip pocket of CEO Paul Scurrah.
Following questions from shareholders as to why he did not own more stock in Virgin Australia at last year’s AGM, Mr Scurrah spent almost $200,000 on 1.16 million shares at 16.75c and 17c each.
After Tuesday’s decline, his investment was worth just more than $150,000.
Mr Scurrah has been open about the financial challenges facing Virgin Australia since he was appointed CEO following John Borghetti’s retirement.
After posting a $349m full-year loss for 2019, Mr Scurrah said 750 jobs would be cut and a full network, fleet and capacity review undertaken.
That resulted in a number of routes being axed including Perth-Gold Coast, Canberra-Gold Coast and Sydney-Christchurch, and a reduction in Tigerair’s fleet from 11 A320s to nine.
Mr Scurrah also oversaw a shake-up of his executive team with several high-profile departures, including Rob Sharp and Merran McArthur.
Last month Velocity boss Karl Schuster also left, promptly followed by board director Mark Chellew, who was chair of the remuneration committee.
Although the weaker demand for air travel was showing signs of improving late last year, bushfires and now the coronavirus were expected to create tough conditions for the second half of the 2020 financial year.
New flights between Brisbane-Tokyo (Haneda) and Melbourne-Denpasar are due to commence on March 29, and Virgin Australia will deliver its first-half results on February 27.
Qantas also saw its share price fall slightly on Tuesday, closing down 0.16 per cent at $6.41.
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