Re-using the clever messaging from the days of Virgin Blue’s initial Australian launch back in 2000, Virgin Australia has launched its own ‘Let’s Keep The Air Fair’ Version 2.0 to lobby the government and the public to stay flying.
With the c-word virtually grounding the global commercial aviation industry, like most airlines, the recent devastating weeks have seen Virgin Australia forced to suspend 90 per cent of its domestic flights as a further result of states closing their borders.
The airline has since stood down 8,000 of its 10,000 staff until at least May with 125 of its aircraft now grounded and New Zealand operations ceased indefinitely.
In a depressing prediction, the Centre for Aviation (CAPA), has forecasted that without coordinated government and industry intervention, by the end of May most airlines globally will be bankrupt.
With no certainty of an end in sight to the local and international travel bans, Virgin Australia’s CEO Paul Scurrah this week requested a $1.4 billion loan facility from the government to keep Virgin Australia afloat, warning “a monopoly in Australian skies will be good for no-one”.
The federal government is reportedly divided on whether to grant the loan though Mr Scurrah said they were continuing to negotiate.
Part of the rumoured loan terms is that if Virgin Australia fails to meet two months of their re-payment commitments, the government will take ownership of the airline.
Today, Virgin Australia launched a new campaign with a stark warning for Australians of the dangers of a domestic airline industry in which only Qantas & Jetstar survive as the sole players.
Mr Scurrah had said this week that with only one airline group in Australia flights between Sydney and Melbourne could rise to $800 – a massive jump compared to Virgin Australia’s current price of under $200.
The campaign kicked off with a full-page ad in Sydney’s The Daily Telegraph today.
“A monopoly in Australian skies will be good for no one.
Not the 25 million people who fly with Virgin Australia, who have seen a 37% reduction in airfares over the 20 years we’ve been operating.
Not our 10,000 incredible people.
Not our 4,000 loyal partners.
Not the Australian economy, to which this airline adds 11 billion dollars a year.
Or the 600,000 people who work in tourism.
Our biggest competitors need a challenger to keep them honest and innovative. A monopoly won’t even work for them.
It’s as clear as the blue sky.
A competitive airline industry is good for every one of us, and will be an essential part of economic recovery.
Let’s keep the air fair.“
So far, the federal government has committed AU$715m to the Australian airline industry, including waiving taxes and charges and offering assistance to regional operators including REX (Regional Express Airlines).
Qantas has already obtained $1.05bn in its latest round of debt funding, while Virgin is asking for $1.4bn from the government, with CEO Alan Joyce debating that as its revenue is much higher than its competitor, it should receive proportionately larger support.
In response, Virgin Australia CEO Paul Scurrah has accused Qantas of engaging in anti-competitive behaviour.
Speaking to the ABC, Aviation expert Peter Harbison suggested there may only be “20 to 30 airlines left after the coronavirus catastrophe ends.”
“You’re definitely going to see a lot of the smaller airlines under pressure but national airlines have a better chance to get through this.” He said.
Virgin Australia is 90 per cent owned by offshore airlines including Etihad Airways, Singapore Airlines, Nanshan Group, HNA Group, and Richard Branson’s Virgin Group who owns 51% of the airline.
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