Virgin Australia Holdings’ CEO Paul Scurrah has warned that the airline industry will require a government bailout if the coronavirus pandemic is not contained quickly. Virgin has approached the federal government regarding the potential for it to provide a $1.4 billion loan facility in the event of a sustained downturn. This would see the government become a Virgin shareholder if the loan were not repaid within 2-3 years:
Virgin’s major shareholders — Chinese conglomerate HNA Group, which itself has asked for Chinese government support, China’s Nanshan, Singapore Airlines and Etihad — previously gave Virgin a loan in 2016, but have each come under pressure from the shock to the global aviation industry.
Under the terms of the proposal, the government would take a stake in Virgin Australia if the loan could not be paid back within two or three years.