Virgin Australia Has Gone into Voluntary Administration after Crisis Talks with Both The NSW and Queensland Governments Failed

Virgin Australia has gone into voluntary administration after crisis talks with both the NSW and Queensland governments failed

Will we end up with lack of competition and very overpriced Qantas/Jetstar flights for domestic flights?

Poll Options

  • 393
  • 114
  • 31
    I do not know

Related Stores

Virgin Australia
Virgin Australia


  • Eww Daily Telegraph?

    He also pointed out that about 75 per cent of the debt is believed to be owed to foreign lenders.

    "A bailout of Virgin without an insolvency is likely to result in hundreds of millions of dollars being transferred from Australian taxpayers to foreign lenders," Mr Rochford said.

    • Hijacking your top comment for a PSA:

      Tues 8:50am: Redemption of points in the online store seems to have been disabled.

      Attempting to visit the store page just redirects back to now. There is no longer an option listed to shop using points.

      • yep getting the same. To be honest I am surprised they didn't block it yesterday and will be even more surprised if they honour purchases.

        • It was working yesterday in the morning (I redeemed a gift card at 9:30). I checked back again in the evening and the store was timing out. They did this last night. I still had about $150 worth of gift cards I could have claimed but I was lucky enough to redeem $200 worth over last week and yesterday.

          • @Piranha2004: By the sounds of things the velocity points panic "may" have been premature. They are apparently a separate company and not going into administration with Virgin. though if I could have gotten in I would have spent the points I had just to be safe.

    • Should have the Australian government phoenix the (profanity) out of them. Give nothing to the lenders, buy the company for pennies on the dollar, and bring it back as Australian owned.

      • I think they should wait for the administrators to sort through the options, while what NSW and Qld was doing was stupid, perhaps see what all the RTB options are before government pursues an equity position which may or may not be the best option.

  • No, this is part of the normal process for how capitalism works

    • Would virgin have fared better if owned by a communist government?

      • A chinese airline owned by the chinese government. Yes. Virgin owned by a communist government? No.

      • I have no idea why you are even mentioning communism.

        I am not going to explain my comment as I can't be bothered.

        All I am going to say is that the statement recently provided by the CEO of Virgin Australia was not surprising and that it supports my comment.

        This is a tough day for our airline … (but) we’re certainly not collapsing

      • Virgin already is already partially owned by a communist government. Go look up the major shareholders, this is a probably a big part of why they won't get a bailout. Bailing out foreign companies that are government backed is hardly a good use of tax payer money.

    • These concepts are not mutually exclusive

  • This is a game to get more government money and to cut some under performing routes , shut down until the states open up for travel etc

  • I don't think Virgin Australia is a domestic concern if it disappears, but if TigerAir (same parent company) disappeared then probably will be less competition for domestic flights.

    • if the company goes, surely tiger will go with it

      • Tiger would disappear before Virgin Australia disappears.

      • I spoke about this in another thread, Tiger closed their brisbane and sydney bases before the impact of covid 19
        Tiger is already gone, and if it hasnt it will be done now

    • This doesn't make any sense. Tiger flies limited routes.

    • Tiger will be the first thing to go in VAH

      • Virgin's International arm will be the first to go/restructured.
        By far the biggest $ loser.
        Tiger flew 2m passengers June-Dec for $2m Earnings (before interest and tax)
        Virgin International flew 1.5m passengers June-Dec for -$49m Earnings (before interest and tax)

  • It's not yet official

  • I think Australia would embrace Air New Zealand if they came in.

    • cant fly domestic routes

      • The government would change the laws I. A flash if it meant getting a second airline to compete with qantas

      • Air New Zealand is the only non-Australian carrier in the world that can fly Domestic routes. That's how they run BNE-NLK (Brisbane to Norfolk Island)

        • the term is Cabotage, and you are making shit up.

          EU airlines can fly where the hell they like in europe
          nz and australia have reciprocal cabotage agreements, so qantas could fly auckland to christchurch
          mexico allows it to some extent
          i would imagine half the african countries don't have airlines

          • @Donaldhump: No, I'm not making shit up. Vanishingly few countries permit ninth freedom flights to foreign carriers if they have a domestic market, barring only those with bilateral open skies agreements. No-one but an Australian or New Zealand airline can fly domestic NZ or Australia.

            • @Kyanar: You said anz was the only airline that can fly domestic routes in a foreign country

              So what is united airlines a USA carrier doing flying the Marshall Islands to Micronesia then

              And Norwegian airlines flying Denmark to London?

              Wiz air a Hungarian airline flying London to Romania and Bulgaria, Lithuania to Cyprus, Georgia and Israel

              Seems u r making shit up as I pulled off five examples from flights I have flown myself, so anz is not the only carrier as you say….

        • Oh you mean within Australia… finish your sentences properly, as you mentioned world in your sentences you have opened the scope to the world not Australia.

    • They tried that already, it was called Ansett Australia. Look how that turned out!

      • That was a long time ago in a very different market.

        • And also totally false. If you actually read the history of the two companies, as it happens none of the "asset stripping" ever happened, and the ACCC found no evidence of insolvent trading either.

    • we've always joked about invading nz/making it a state. Between this and the stances of our respective governments, I just realised I'm far more amenable to them taking over us

    • those who still remember what Air NZ did to Ansett Australia alomst 20 years ago! Took over Ansett despite its own struggling performance and Ansett went under as soon as troubles came! If Australian government let Singapore Airlines took over Ansett, we will still be seeing Ansett flying today!

      • The Administrators admitted decades ago that was a load of unsubstantiated crap. Ansett was already financially unsteady due to their disastrous decision to sponsor the Sydney Olympics. Air NZ only invested in Ansett because the Australian Government reneged on an agreement at the time with the New Zealand Government to allow reciprocal access to each other's domestic markets and then refused Air NZ clearance to acquire Qantas. At the time Singapore wanted in, Ansett was already 51% owned by Air NZ who bought TNT's share, the bidding was between Air NZ and Singapore Airlines for News Corp's share.

        It's funny how you "still remember what Air NZ did" when actually nothing you "remember" ever happened.

        • Hope you were not one of the staff affected because a lot of people suffered even up to today of their mental emotion and financial position. the question is why would anyone bought into an financially unsteady airline if their balance sheet is not healthy themselves?
          Can't imagine Air NZ acquiring Qantas- it's usually the big fish acquiring the smaller fish!
          It appears you have the "knowledge" then why did Air NZ leave Ansett in it's wake?

          • @jdkong21: In an effort to shore up their own financial position Air NZ wanted access to the Australian domestic market. Qantas was already nibbling at Air NZ's domestic market because of the agreement between NZ and Australian Governments, and when Hawke reneged on the agreement and didn't open the domestic skies they had to go for plan B - buy into an existing airline in Australia. The AU Government wouldn't let them buy any of Qantas in the float, which left them one option - Ansett. So they bought TNT's 51% stake. At the time of the collapse, they'd just bought Rupert Murdoch's 49% stake after a massive bidding war with Singapore Airlines (who had previously tried to buy a stake in Air NZ but were blocked by the government, and tried to buy Virgin Blue outright but were blocked by Richard Branson).

            Air NZ's CEO at the time, by the way, is not the same guy that ran the company back into profitability. The NZ government replaced the board and senior management when they bailed out the airline by taking an 83% stake of new equity in the company (diluting everyone else down to near nonexistence - this is the form any bailout should take of VAH in my opinion). Ansett was cut adrift because obviously the NZ government isn't going to bail out a foreign company (to echo the sentiment in this very thread about a Virgin bailout) and it had a real chance of finding someone to take over - in fact a consortium including Solomon Lew said they would buy it and they were very close until suddenly they pulled out citing "legal reasons".

            Virgin was near annihilated by the Ansett collapse. While Ansett was struggling, Qantas saw the writing on the wall and pulled in extra craft and repositioned some of their international fleet so that as soon as Ansett announced they were grounding planes, Qantas had extra capacity ready and in an instant took up to 90% of domestic capacity. Naturally that near monopoly put a lot of pressure on Virgin.

            If Singapore were to have taken that 49% stake, which was not blocked by the government, but by Ansett's board, it probably would not have played out much, if any at all, differently.

            Remnants of Ansett still fly though - REX is actually two of Ansett's former regional subsidiaries.

  • Why would Australia bail out a majority foreign owned company?

    • This. Foreign owned and foreign-owned debt. Exact same reason the US is loath to help the cruise industry. It's not as if the Government hasn't successfully dealt with a major failure of a domestic airline before -competition always returns.

    • @brendanm

      To potentially save 10,000 direct Virgin/Tiger jobs and 6,000 other workers indiretly (eg cleaners, caterers, etc)

      Does Australia fund foreign owned companies? Yes, an example is Adani Mines - they would not consider mining here unless we gave them a billions worth of subsidies (sure its not a cash hand out but it if essence similar things, instead of Australia collecting money from them, we just waived it) Why did we do it? Well to create jobs (or save jobs if the mine did not proceed).

      • That's life sometimes. Adani is also stupid, it will make sweet fa in the way of jobs for australians.

      • The cost to save those jobs will be roughly $100k each and that is assuming that it is enough to keep them afloat, which is questionable. subsidies are very VERY different to direct cash handouts (not that I agree with Adani either).

      • Ford, Holden and Toyota all sent profits overseas. The Australian government didn't bail them out. The right thing to do in this case is nothing.

    • Well they sent $8BN to bail out failed European banks during the GFC so it's not like it would set a precedent.

    • Because Ozbargain logic

    • Yup, exactly this.

  • Haha the velocity rewards store is basically getting smashed at the moment of people trying to get in and use their points.

    I tried to. Now am looking at a major loss of points. Oh well. It happens.

  • +5 votes

    Up next…Ansett poised to buy Virgin Australia.

    • +2 votes

      Reg died in 1981

    • Ansett isn't completely gone though.

      "Ansett is the world's leading independent provider of Aviation Training services with a renowned reputation for service excellence and commitment to delivering the highest quality training experience. Ansett has grown to own and operate four Training centres globally, whilst partnering with other training facilities to operate Ansett Simulators in additional locations and covering the broadest fleet of Simulator types in the world."

      • Unrelated in every sense, except their trading name.

        • Unrelated in every sense, except their trading name.

          Fake news. What about their logo?

          • @markathome: They purchased the rights to use it.

            They are related to Ansett in the same way that Dick Smith (aka Kogan) is related to the original brick and mortar Dick Smith

            • @triviums: But I am technically correct. Or are you saying that the similarities between these two logos are just random chance:


              • @markathome: If by technically correct you mean they are the same company then no.

                As triviums said, they're related just like Dick Smith (Kogan storefront) is related to Dick Smith (the brick & mortar store).

                Same name, same logo; different business.

                Imagine if Bega got permission to put the Kraft logo on their peanut butter.

                Same peanut butter, same logo; different business.

                • @Chandler: Except Bargain4U said:

                  Unrelated in every sense, except their trading name.

                  You've said:

                  Same name, same logo; different business.

                  That's a different assertion to what Bargain4U made. The training company is not "unrelated in every sense, except their trading name" it may be "unrelated in every sense, except their trading name and logo".

                  In my (heavily) downvoted comment I provided examples of why I don't believe you can justifiably say that the logo is unrelated to Ansett's. And in fairness, triviums never did say I was wrong. But Bargain4U is not correct. His statement "unrelated in every sense, except their trading name" is false.

        • Yes and no. The simulator centre they use is actually the Ansett centre, bought from the Administrators in October 2004 according to (what remains of) the Ansett Australia web site.

    • They tried that in like 2000. It didn't go well.

  • We will see expensive flighs form now on whether this happened or not, all in the name of recovering from their losses previously.

    But if more concern is the possible 16000 people loosing their jobs.

  • Can everyone please get off the velocity website so that I can redeem my points? Thanks.

  • back to the days when it was cheaper to fly perth to brisbane via indonesia

  • relax we have rex airlines and pelican airways and air north

  • If Qantas becomes a monopoly the first thing they’ll do is close Jetstar domestic service - no need for a budget arm any more. Job done.

    • would that mean a bit more hope for the high speed rail link between capital cities?

      • Lol.

        What are you willing to compromise on for the monumental cost it will take to build this system?

        I mean, I'd love if it was built but not at the expense of taking out a loan. It has to be done with our current budget so something will have to give.

      • Yeah instead of paying an expensive $300 sydney to melbourne we can pay a much cheaper $1000+ a seat for a train. To put into perspective, Virgin has a value of around 700 million, Qantas has a value currently of around 5.5. billion. The sydney to melbourne high speed train last time it was floated had a cost of around 120 Billion and only 10 stops. you aren't going to have faster travel than a plane or cheaper.

        • you guys can mod me down all you like. It doesn't change the problem, high speed rail is not financially viable. To have the train complete the trip in reasonable time to make it viable it can't stop a lot, but to get the financial viability it has to stop a lot in country areas as all the models to make it viable rely on recouping huge amounts of money through land sales in country areas for commuting. And I say this as someone that would much prefer to catch a train.

  • It is understood Virgin Australia's board will meet on Monday night to decide the company's future, and if an administrator is appointed this week, it is likely to be Deloitte.

    there the real and only winner. deloitte

  • Goodbye Velocity points!

  • I hope they survive the flight attendants are better looking than the ones on qantas!!

  • Virgin Australia is on the edge of insolvency, with about $5 billion in debt

    why would a company get into 5b debt? should be a much lower limit for example 1b and cant pay means non future of turning around.
    wait for 5b and this is what happen

    • why would a company get into 5b debt?

      To grow faster. Companies borrow money because they can make it earn a whole lot more than the interest rate.

      There is always risks though, and a global pandemic is one of them.

      • That was actually part of why Air NZ dumped their share in Virgin after failing to get rid of Borghetti. Luxon didn't like Borghetti's "Qantas Lite" plan, and thought Virgin should stick to what they were founded as and were good at - a no frills, limited service airline that got people places in a reasonable time. Think Jetstar Plus rather than Qantas Lite.

  • After 30mins of persistence, my purchase just went through. Don't bother with the JB Hi-Fi $50, it was a waste of time trying to get it to load and finding out that they are out of stock.