Virgin staff urged to unite to keep airline base in Brisbane

The Queensland government is counting on Virgin Australia workers to use their numbers in creditors’ meetings

Grounded Virgin Australia planes parked at Brisbane Airport. Picture: Getty Images

The Queensland government is counting on Virgin Australia workers to use their numbers in creditors’ meetings to keep the airline’s base in Brisbane.

The carrier went into administration last week with debts of $6.8bn owed to about 12,000 creditors, including 9020 employees.

Queensland’s State Development Minister Cameron Dick said the workers would play a key role in the administration process, with the first creditors’ meeting set down for Thursday.

“Virgin staff are big players in the process as creditors with upwards of $400m worth of entitlements,” Mr Dick said.

“The workers have made it clear through representatives, the Transport Workers Union, they would not support moving headquarters out of Queensland.

“At this time, the last thing Virgin staff need is the disruption and dislocation of an interstate move.”

Mr Dick also revealed his department was in “close contact” with Virgin administrator Deloitte. His comments followed the NSW government’s appointment of former Macquarie Bank executive Michael Carapiet to provide strategic guidance with regards to Virgin Australia.

With extensive banking and financial experience as well as governance and board positions, Mr Carapiet was considered very well placed to lead NSW negotiations with Deloitte.

The federal government has also hired a Macquarie alumni, Nicholas Moore, to represent its interests in discussions over Australia’s second biggest airline.

NSW previously made it known it wanted Virgin Australia to relocate to Western Sydney Airport opening in late 2026, and Treasurer Dominic Perrottet said the government had been in discussions with Virgin before the COVID-19 crisis.

“Those talks are continuing now in relation to their future,” Mr Perrottet said. “We believe it’s in the best interests of NSW and the nation to have a competitive airline industry.”

Although NSW has not put a price on what it might be prepared to pay for Virgin Australia, Mr Dick said Queensland’s $200m offer remained “on the table”.

“Our support is contingent on financial support from the federal government,” he said.

“Virgin is a national airline, and their survival demands a national response.”

Victoria was also believed to be keen to lure Virgin Australia to the state, with a $500m bid backed by Melbourne Airport.

But on Tuesday a spokesman for Treasurer Tim Pallas virtually ruled them out of any race, after learning the magnitude of the airline’s financial woes.

“The situation Virgin finds itself in is devastating for staff and their families — and the tourism sector more broadly,” the spokesman said.

“Any investment of significant scale from the government has to be contingent on it being a good deal for Victoria and bringing jobs to Victoria and that’s not currently the proposition.”

As the states manoeuvred for a Virgin Australia 2, business and investor interest in resurrecting the airline continued, spearheaded by Perth-based conglomerate Wesfarmers, private equity firm BGH Capital and US-based airline investor Indigo Partners.

Wesfarmers was believed to be working with Macquarie Group and other parties on an attempted recapitalisation of the airline, while BGH Capital was also teaming up with other parties in a separate consortium.

Thursday’s creditors meeting has been set down for 11am, with creditors invited to join electronically due to restrictions on meetings as a result of the coronavirus crisis.