Finance Finance News Virgin Australia offered $200m coronavirus lifeline by Queensland government

Virgin Australia offered $200m coronavirus lifeline by Queensland government

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Virgin Australia has been thrown a lifeline by the Queensland government, which is offering $200 million to help bail out the airline.

The troubled airline has requested a $1.4 billion loan from the federal government to help it through the coronavirus pandemic, as it struggled to avoid going into administration.

That call has so far been resisted, with Treasurer Josh Frydenberg stating the federal government was “not in the business of owning an airline”.

Queensland Premier Annastacia Palaszczuk’s office confirmed it is willing to provide the funds, but other states would also need to contribute in order to keep the airline afloat.

The money would be contingent on the airline keeping its headquarters in Brisbane.

The offer follows the federal government’s announcement that it would spend $165 million to get Virgin and Qantas to run a baseline domestic service for the next eight weeks.

But the proposed injection of funds was not enough to stop the company from holding a meeting with unions and experts to discuss ways to avoid going into voluntary administration.

The company went into a trading halt this week following the standing down of thousands of staff.

Queensland State Development Minister Cameron Dick says it is imperative Australia has two airlines, to support tourism, jobs and regional investment.

“Queensland has given Australia both our national airlines – we won’t let them go, or let thousands of families watch their jobs go, without a fight,” he said in a statement on Saturday.

“But we can’t do it alone, and nor should we, because all parts of Australia benefit from two national airlines.”

Mr Dick said Queensland’s support was conditional on debt restructuring, shareholders and bondholders doing their bit.

Coalition MP Andrew Laming says the federal government will not assist the airline without guarantees.

“We can’t be distributing taxpayers’ money purely on the whim of what is an ambit claim for over $1 billion unless it makes a difference,” he told the ABC.

“The ultimate solution is to get the economy rolling again.”

Federal opposition frontbencher Jason Clare has called on the Morrison government to help Virgin.

“We need two airlines. If we don’t have two, we’ll have fewer flights and flights will cost more. It won’t mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder,” he said.

“Think of all the tourist jobs, all the destinations that Virgin flies to, we need two airlines so we’ve got enough planes in the sky to help the economy recover after the worst of this virus has come and gone.”

-with AAP