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March 31, 2020 14: 39:02
Virgin Australia has raised out of a temporary trading stop, after confirming reports that it has asked the Federal government for a $1.4 billion loan to assist it through the coronavirus crisis.
Bottom line:
- Qantas states if Virgin Australia gets $1.4 billion from the Government, it should get $4.2 billion
- There is speculation a bailout could involve the Government ending up being a part-owner
- Credit rankings firms have actually reduced their outlook on Virgin in the middle of the COVID-19 crisis
Virgin said its bailout proposition was “subject to approval by the Virgin Australia Holdings board and the Australian Federal government” and “may or may not include conversion to equity in specific scenarios”.
Qantas CEO Alan Joyce warned versus Federal government help for his airline’s rival, saying aid must not be provided to companies that had actually been “terribly managed”.
Mr Joyce has consistently said airline companies are facing a “survival of the fittest” situation as the coronavirus pandemic grounds thousands of airplanes.
He has formerly stated Qantas is not looking for a bailout, however has actually warned that if Virgin gets federal government aid, the Federal Government requires to “level the playing field” to prevent misshaping the market.
A Qantas source validated the airline’s earnings was 3 times higher than Virgin’s, meaning it would want a $4.2 billion loan.
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