The Australian government is still considering Virgin Australia’s request for a bailout, the deputy prime minister said, after the carrier cut schedules further.
“We will continue to look at the situation, I will continue to talk to the key stakeholders, Qantas and Virgin,” Michael McCormack said in an interview with Sky News Australia on 12 April.
Virgin Australia said on 31 March that it was seeking A$1.4 billion ($890 million) in financial support from Canberra and its proposal may include the option for the government to convert any such loan into equity.
Asked whether he was open to a loan for the country’s second-largest carrier, McCormack said: “We want a two-airline sector coming out of this.” However, he added, “We’ve already put a billion dollars on the table.”
That references support packages announced in March, namely an aviation relief scheme worth A$715 million, comprising the waiver of certain fees and charges, plus a separate package for regional air travel, worth an initial A$198 million.
Even before the coronavirus crisis, Virgin Australia was already struggling, having posted losses for the last seven financial years.
Despite the support for regional air travel, Virgin Australia on 9 April cut domestic schedules further, citing declining demand due to coronavirus-related travel restrictions.
As of 10 April, the carrier only operates six weekly services between Melbourne and Sydney and has temporarily suspended other passenger services.
Virgin Australia said in the 9 April statement it is still flying some freight and repatriation links, as well as providing charter services in the resources sector, for which demand “remains strong”.
It added: “We also remain open to charter opportunities or any flying the Australian government needs support with.”
