Troubled airline Virgin Australia has confirmed it is formally in voluntary administration but is “not collapsing, CEO Paul Scurrah says.
Mr Scurrah says Tuesday’s announcement that the carrier was in administration was tough but the plan was for the group to survive the economic impact of the coronavirus pandemic.
“This is a tough day for our airline… (but) we’re certainly not collapsing,” he told reporters.
He said the airline had sought financial assistance from its shareholders, government and other parties but had failed to secure “the level of assistance we needed.
“This is obviously a very difficult decision,” he said, but added it was the best option for the group to “emerge stronger on the other side of this crisis.”
He said the voluntary administration would immediately freeze financial pressures on the group, allowing it to refinance and restructure.
“It is our absolute intention to emerge stronger. Australia needs a second airline and we are determined to make sure we are that airline,” Mr Scurrah said.
Administrator Vaughan Strawbridge, from Deloitte, said no redundancies were planned and there’d been very strong investor interest in Virgin Australia.
Mr Scurrah and his team at Virgin will continue to run the airline, supported by Deloitte which is responsible and liable for what happens during the administration process.
Wages will continue to be paid to staff who still have jobs, and federal government JobKeeper payments will continue to flow to eligible staff.
The Velocity Frequent Flyer arm, while owned by the group, is a separate company and is not in administration.