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"Deep pockets" Virgin shareholders should save airline, not taxpayers: Govt


The federal government is holding firm against Virgin’s pleas for a $1.4 billion bailout, despite the airline being on the brink of collapse.

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Treasurer Josh Frydenberg is instead putting pressure on the company’s shareholders.

“They’ve got deep pockets,” he told ABC radio on Thursday.

Frydenberg said the government was continuing to talk to the company as well as Qantas, having already provided more than $1 billion in relief for the aviation industry.

“We want to see Virgin continue, we want to see two airlines in the domestic market, but we’re not in the business of owning an airline,” he said.

“Where our focus has been is on providing industry-wide support.”

Virgin on Thursday announced a further seven-day trading halt for its shares,  to continue talks on financial aid and restructuring alternatives to help it weather the crisis.

But the airline didn’t identify who the talks are with.

Reuters reports Virgin is also in talks with creditors about debt restructuring options such as a debt-for-equity swap and has hired UBS, Morgan Stanley, Houlihan Lokey and Deloitte as advisers.

A person with knowledge of the matter told the news agency that entering voluntary administration was a last resort – but the airline believes it needs a decision on government aid by next week.

Virgin last month stood down 10,000 workers due to travel and flight restrictions imposed to limit the pandemic’s spread in Australia, while Qantas stood down 20,000 staff.

Australia to continue funding WHO despite US pullout

Frydenberg also said Australia will continue funding the World Health Organisation despite arguing it has made “significant mistakes” during the coronavirus pandemic.

The federal government declared the pandemic two weeks before the WHO, and was criticised for closing its borders to Chinese travellers.

Australia has also admonished the WHO for endorsing China’s decision to reopen wet markets, which were the likely cause of the COVID-19 and other diseases like SARS and swine flu.

US President Donald Trump has said America will stop contributing to WHO over its handling of the pandemic. The US last year gave US$400m to the organisation, about ten times more than China.

Frydenberg said Australia would leverage of its membership of the WHO to push for reform.

“It does important work in our region and we want to see that continue,” he said.

“The practical solutions provided by the WHO locally are much more beneficial than some of the political decisions they have taken centrally.”

A group of Australian professors who work at centres that collaborate with the WHO have criticised the United States for withdrawing funding from the United Nations body.

“To remove this funding suddenly and in the middle of a pandemic seems rather callous and introspective,” the 19 professors wrote in a joint statement.

“We are unanimous in thinking that this defunding of WHO is a global health disaster (that) will result in thousands of additional and potentially preventable deaths from COVID-19.”

-with AAP

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