The state-owned Queensland Investment Corporation (QIC) is set to make an official bid for a stake in Virgin Australia.
Hours after it emerged that three frontrunners have emerged in the race to buy Virgin Australia, new Queensland Treasurer Cameron Dick released a statement on Wednesday confirming the move to save the airline and retain its headquarters in Brisbane.
The airline’s move into voluntary administration move has left the jobs of at least 15,000 airline workers and connected supply chain workers in doubt.
Mr Dick said the bid could take the form of a direct equity stake, a loan, a guarantee or other financial incentives.
Brisbane-based Home Affairs Minister Peter Dutton labelled the idea “laughable” on Twitter.
Premier Palaszczuk has almost bankrupted Queensland, and now in the middle of a crisis they want to buy an airline. It is laughable. She “leads” a government which is corrupt and chaotic.
— Peter Dutton (@PeterDutton_MP) May 13, 2020
But a defiant Mr Dick tweeted back shortly afterwards: “Look mate, just stick to cruise ships …”
In the earlier announcement Mr Dick had said “two sustainable, national airlines are critical to Australia’s economy”.
“We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector,” Mr Dick said.
“We saw the punishing increase to the cost of flights after the Ansett collapse, and this government will not stand by and let that happen again.”
Before going into voluntary administration, the Queensland government had offered $200 million towards a support package that was conditional on Commonwealth government backing.
It has also been involved in a stoush with the NSW government during bailout talks.
Private equity and international airline investor groups are among 19 parties who have shown interest in buying Virgin after the airline went into voluntary administration in April.
In an affidavit published by the Federal Court on Tuesday, Virgin Australia’s administrator says 19 parties interested in purchasing the airline have been granted access to a data room from May 11.
In March, Treasurer Josh Frydenberg urged Virgin’s international shareholders to bail out the airline rather than the government throwing it a lifeline as the coronavirus pandemic wreaked havoc on domestic and international travel.
More than half of Virgin’s shareholders – Virgin Group (10 per cent), Etihad Airways (21 per cent) and Singapore Airlines (20 per cent) – are international travel firms who are also feeling the financial strain of border closures and restrictions on travel.
The airline entered voluntary administration on April 21, owing creditors nearly $7 billion.
Its administrators at Deloitte have said they want to agree to a deal with a buyer by the end of June.