Virgin Australia Holdings stated Tuesday it’s seeking a government loan of A$1.4 billion ($862.68 million) and exploring other choices to get through the coronavirus crisis.
The proposed loan bundle would enable the government to take an ownership stake in Australia’s second-biggest airline if it is not able to repay the loan in two to a few years. The bundle is part of a broader request for A$5 billion worth of airline trade aid, stated a person with knowledge of the matter who was not authorized to talk with media.
Virgin is in a financially weaker stance than its larger competitor Qantas Airways and has said it might put 8,000 employees on furlough and cut over 1,000 jobs permanently as it grounds nearly all of its fleet due to a drop in demand.
Virgin’s shares are tightly controlled by a group of international airlines along with Singapore Airlines, Etihad Airways and Chinese group HNA Group that has seen a steep deterioration in revenues due to the coronavirus pandemic.
The Australian government has already declared some aid to the airline sector, along with refunding and waiving charges similar to domestic air traffic management fees worth A$715 million and A$198 million in support for regional aviation.
Deputy PM Michael McCormack stated Tuesday that he was speaking with airline sector stakeholders and representatives every day to make sure they had been receiving the help they needed and listening to what else might be required as the pandemic continues, based on a statement from his office.