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Queensland Government Seeks Stake in Revived Virgin Australia in Bid to Save Local Jobs

Queensland Government Seeks Stake in Revived Virgin Australia in Bid to Save Local Jobs

The Queensland government has confirmed plans to submit a bid for a stake in Virgin Australia with State Treasurer Cameron Dick saying two national airlines were “critical to Australia’s economy”. Around 10,000 jobs are at risk after Virgin Australia entered voluntary administration on April 21 – the airline directly supports around 5,000 jobs in Queensland, including 1,200 at its Brisbane headquarters.

The State-owned Queensland Investment Corporation will manage the bid for Virgin Australia with a number of options on the table. According to Treasurer Dick, these include a direct equity stake, as well as a a loan, guarantee or “other financial incentives”.

Photo Credit: Virgin Australia

“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,” Dick said on Wednesday evening.

Before entering voluntary administration the Queensland government had offered A$200 million as part of a package to save the carrier – the rescue package came with a condition that the airline remained headquartered in the State and saved as many jobs as possible. In the end, the rescue bid failed when federal support to the tune of A$1.4 billion wasn’t forthcoming.

The administration process is being handled by global accountancy firm Deloitte who say a total of 19 entities have submitted plans to bid for the failed airline.

“We are well-equipped to manage the state’s interest in Virgin Australia Holdings should the consortium be successful,” commented Damien Frawley, chief executive of the Queensland Investment Corporation.

“Virgin administrator Deloitte has set an ambitious time frame and we look forward to delivering on this mandate for the Queensland government,” he continued.

Treasurer Dick said the decision to submit a bid was in part to keep competition in the domestic airline industry alive to avoid a sharp increase in airfares should Qantas become the only player in the market. “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,” he said.

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