Federal Opposition Taps In As States Fight Over Virgin Australia

April 20, 2020 Updated: April 20, 2020

Queensland and New South Wales are fighting over struggling airline Virgin Australia, as it seeks debt funding to stay afloat amid the economic downturn caused by the CCP virus.

Battle lines were drawn when NSW Premier Gladys Berejiklian said her government would consider all options, including luring Virgin and its subsidiary Tiger Airways to Sydney—despite the upset to Queensland-based employees.

“We’re thinking about what we can do to keep as many jobs going now, but also how we can actually start recovering the economy during this time as well,” she told reporters.

“If that means encouraging businesses to set up shop in NSW, if it means bringing jobs to our state, we’ll of course … consider all those things.”

She said her government’s responsibility is to NSW.  “I don’t apologise for that,” she said.

Queensland minister Cameron Dick is just as serious about protecting Queensland’s share of Virgin’s 15,000 employees.

He warned NSW to “back off on stealing Virgin,” saying “we will stop at nothing” to keep the carrier based in Brisbane.

“New South Wales might want to bring a pea-shooter to the fight; we will bring a bazooka and we’re not afraid to use it,” he said.

“At a time when their jobs hang in the balance, the 1,200 Queensland families who depend on those head office jobs should not have to face the threat of being forced to move to Sydney,” said Dick.

Brisbane has been home to Virgin’s headquarters ever since former Labor Premier Peter Beattie provided $11 million in incentives for the airline to set up shop back in 2000.

Federal Perspective

The Morrison government has remained firm on its position that Virgin’s commercial discussions are for its board and management, and not for the government to interfere.

But federal shadow opposition treasurer Labor’s Jim Chalmers suggested to reporters that the federal treasurer was ignoring the plight of Virgin’s employees.

“[Unemployment lines will] be longer than necessary because the government refuses to step up and support 15,000 workers at Virgin airlines who are going through a very uncertain period while the government leaves them hanging,” he said on April 20.

Earlier that day, Treasurer Josh Frydenberg told Sunrise on Seven Network that he wanted to see Virgin continue to survive, but that the Australian government doesn’t want to own an airline.

He pointed out that former Labor Prime Minister Paul Keating sold Qantas Airways back in 1993.

“We believe that [Virgin’s] been hit, like many other businesses, by the global pandemic, but it also has some shareholders with very deep pockets. As you know Etihad, Singapore Airlines, Chinese-related companies, and of course Virgin International. Let’s see what those major shareholders do, but we do want to see Virgin continue to operate,” said Frydenberg.

Back in March, Virgin sought a federal loan for $1.4 billion (US$890 million). When the global pandemic hit, Virgin was already carrying about $5 billion (US$3.17 billion) in debt.

In a bid to protect thousands of jobs in the state, Queensland’s Labor government has offered $200 million (US$126 million) to help rescue Virgin, but only if it keeps its Brisbane headquarters. Their decision to bail out the airline comes during an election year for Queensland.

Follow Caden on Twitter: @cadenpearson