The administrators for Virgin Australia note there is healthy interest in recapitalising the airline and intend to bring it out of administration as quickly as possible.
“There are in excess of 10 parties known to us who have got a keen interest in being part of the restructure of Virgin,” Deloitte lead administrator Vaughan Strawbridge said at a press conference today.
He said he is confident that a restructuring can be achieved in a short space of time and an outcome could be known in two to three months.
Strawbridge declined to give details of the interested parties, saying only there is a wide cross-section of parties and that there is international interest.
His preference is to sell the business as a whole and frequent flyer programme Velocity will not be sold separately.
“It is a very valuable part of the group. We have the intent that that forms part of the restructuring proposal as we go forward,” he said.
Although wholly owned by Virgin Australia, Velocity is a separate business and is not part of the administration. It has, however, halted redemptions of points today for an initial period of four weeks.
Speaking at the same press conference, Virgin Australia chief executive Paul Scurrah said the carrier will work “more aggressively” on fixing its balance sheet through the voluntary administration process. “We will come back leaner, fitter and stronger,” he promised.
The carrier has posted losses in the last seven years and has around A$5 billion ($3 billion) of debt. Before the pandemic hit, it was working on a transformation process affecting its workforce, routes, fleet and supplier contracts.
“This has caught us by surprise as much as any airline in the world,” Scurrah said, referring to the spread of Covid-19, saying that it cut off “the oxygen supply of our business”.
“The plan we had going into this crisis was a good plan to make sure we turned a great airline into a great business and that progress was halted by this unprecedented event,” he added.
Scurrah also said that Richard Branson, who owns a 10% stake in the group, was doing all he can to help the airline and remains interested in participating in the future.
