Expert reveals the Qld airline that could replace ‘tainted’ Virgin Australia
Concerns the collapse of the “tainted” Virgin Australia would create an airline monopoly in Australian skies has been dismissed by an industry expert, who points out Queensland has another airline ready and able to fill the void.
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REGIONAL Queensland charter group Alliance Airlines is among the best-placed to fill Virgin’s void if it fails to emerge from voluntary administration, a leading aviation industry expert believes.
Concerns the collapse of Virgin Australia would create an airline monopoly in Australian skies has been dismissed by Strategic Aviation Solutions chairman Neil Hansford, who said Queensland had another airline almost ready and waiting to fill any void.
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Alliance Airlines, which specialises in charter and specialty flights to mining towns, has the infrastructure and personnel to challenge Jetstar, Mr Hansford believes.
“You’ve got Alliance sitting in Brisbane with 50-odd aircraft.
“With the right sort of funding or government guarantees could upgrade their fleet and get reasonable services going.”
Alliance Aviation Services, an ASX-listed company, has changed its routes and frequency as a result of the COVID-19 pandemic.
Managing Director Scott McMillan said the flexibility of services, strong cash balance and ownership of its planes put it in a positive position to weather the crisis.
Mr Hansford said Alliance, with its 50 aircraft, could step-up to challenge Jetstar if it leased new planes.
“There’s going to be a lot of lessors who have aircraft in Virgin who would be happy to leave them on the Australian register,” he said.
“There’s plenty of ample crew … plenty of engineering around.”
Alliance Airlines has a wet-lease partnership with Virgin Australia and an agreement to operate flights between Brisbane and Gladstone and Bundaberg.
It has up to $300,000 exposed in the Virgin Australia administration process.
Mr Hansford said the Alliance board would need to consider whether to join an investor to lodge a claim for Virgin.
“I’d be working out whether I’d want to take the financial risk to go into the business,” he said.
“Alliance has got a very good business.”
Mr Hansford said the airline would need to run a low-fare carrier in competition to Jetstar, and ditch the Virgin name.
“Most certainly you’d get rid of the Virgin name, it’s not that magic,” he said.
“If you take the Virgin name you’d have to pay (Sir Richard) Branson royalties.
“The only thing that is saveable is a low-cost carrier, no international, operating on principal routes with one aircraft – the 737-800.”
Originally published as Expert reveals the Qld airline that could replace ‘tainted’ Virgin Australia
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