Pilot turned farmer: Captain joins pleas to save airline
Three weeks ago Virgin Australia captain Anthony Kerr was landing an A330 in Perth - this week he is driving a tractor on a farm north of Moree in north west NSW.
Yesterday Captain Kerr joined with business leaders and 10,000 fellow Virgin employees to beg the federal government to give the company a lifesaving loan and stop it going to the wall.
"Things have happened so quickly," Capt Kerr said. "Three weeks ago I was flying an A330 and now I am sitting out in the middle of nowhere driving a tractor."
Virgin requested a halt on the trading of its shares yesterday morning as negotiations with the government over a $1.4 billion loan continued.
Insiders say Virgin, which made zero profit last year, has days not weeks to find a solution.
In a statement the airline said: "Virgin Australia has requested a trading halt as it continues to consider ongoing issues with respect to financial assistance and restructuring alternatives."
At stake are 16,000 direct jobs, an $11 billion economic contribution to the Australian economy and competitively priced airfares that tourism and business rely on.
"There are thousands of highly skilled workers, pilots like me, who will have to take their skills overseas if Virgin is allowed to collapse," Captain Kerr said.
Virgin Australia chief executive Paul Scurrah spent the Easter long weekend lobbying cabinet ministers to secure support for a three year loan that would be repaid in full or see control of the airline handed to the Australian government.
"Forty one per cent of our 10,000 strong workforce comprises of skilled workers, such as pilots, engineers, and ops controllers, who all contribute enormously to keeping the aviation industry in Australia running," he said.
"Our request for government support is about securing the future of all team members, and ensuring the skilled workers remain in Australia."
That call has been backed by tourism and business leaders who warn of the dangers of going back to the days of a monopoly airline where a one way flight from Melbourne to Brisbane cost $1000.
Flight Centre chief executive Graham Turner said: "From an industry and customer point of view I think it is essential Australia has two high standard competitive airlines."
Treasurer Josh Frydenberg yesterday said the government was "absolutely committed" to the aviation sector but steered clear of making any commitment to Virgin.
He said the government had committed more than $1 billion of support measures to the aviation sector. However industry experts point out that money is in the form of relief and waivers while flying and of no use to Virgin, which is operating one regular commercial flight between Sydney and Melbourne.
But on Wednesday Treasurer Josh Frydenberg said Virgin should first turn to shareholders and not taxpayer dollars for financial support to avoid collapse.
The Treasurer said he was aware of reports Virgin was hiring insolvency experts but said the federal government remained focused on support for the entire aviation sector, not one particular private airline.
It is feared if Virgin becomes insolvent Australia's aviation industry will become a monopoly with only Qantas serving domestic travel.
"Australia is a country of 25 million people and I understand that two airlines have served us well, but, at the same time, our approach has been sector-wide support and that's critical to understand," Mr Frydenberg said.
"We've announced more than $1 billion worth of support measures which help Virgin, which help Qantas, which helps some of those regional airlines."
Mr Frydenberg said Virgin Australia should first turn to its shareholders for financial support. "Their first point of call is their equity holders, and they've got some big equity hold there, as you know, not just Virgin globally, but there's Etihad, there's Singapore, there's two China-related companies who are stakeholders," he said.
"I know that they're doing a lot of work.
"The government (has) had open lines of communication with Virgin as we have had with Qantas and as you would expect us to do."
Former president of the Australian Business Council Tony Shepherd, who is a director of Virgin Australia International dismissed suggestions that Virgin's overseas owners including Singapore Airlines and Etihad could wade in with a rescue package.
Airlines around the world have received government bail outs including a $NZ900 million loan for Air New Zealand and $US60 billion rescue package for America's airlines.
"The airline industry will be on its knees after this and there will be no one to come in to buy it up," Mr Shepherd said. "If we are going to recover from this we need two strong airlines in Australia."
Labor transport spokeswoman Catherine King called on the government to give an "urgent lifeline to Virgin Australia to support the airline and its 10,000 employees through this crisis.
She said failure to do so "will have a devastating impact on Virgin's employees and on our tourism, freight and services sectors, and will slow our recovery once the COVID-19 outbreak passes."
But industry giant Qantas has been lobbying hard against Virgin receiving any aid and argues that any help should be proportionally matched - so if Virgin gets access to $1.4 billion Qantas should get $4.2 billion.
In The Daily Telegraph today Aviation expert Geoffrey Thomas warns: "If Virgin fails the impact of the Australian economy, already on life support, will be a disaster.
"Airfares could jump by about 20 per cent and that would add, over the next ten years, based on 2019 revenues, $50 billion to air travel costs for Australians."
Originally published as Pilot turned farmer: Virgin captain joins pleas to save airline