Virgin Group founder Richard Branson and the union representing the bulk of workers at collapsed airline Virgin Australia have thrown their support behind Bain Capital, saying they will back the proposal from the private equity outfit to resuscitate the stricken carrier.

Creditors who are owed $6.8 billion after Virgin’s April collapse, including about 9,000 of its workers, will meet on Friday to vote on Bain’s offer to buy the airline.

Bain’s $3.5 billion deal to acquire Virgin will see the airline relaunched as a value carrier with limited international offerings. Virgin under Bain will also sack 3000 employees, or about a third of its workforce.

In a significant win for Bain ahead of the meeting, the feisty Transport Workers Union (TWU) said its members would endorse the Bain proposal at the meeting, while still warning about governance concerns.

The TWU had been a fierce critic of Bain, raising concerns during the sale process about the private equity group’s track record on industrial relations as well as its plans for the new Virgin board.

“We will vote to accept Bain Capital as the new owners of Virgin and we look forward to working with them to put Virgin back into the sky, stronger and better than before,” TWU national secretary Michael Kaine said.

“But to do this Bain must listen to workers and utilise their skills, energy and experience in rebuilding the airline,” he said.

“It must deploy a strong hand to ensure co-operation not confrontation with workers so that Virgin is the success that the travelling public and the wider community demand.”

The Australian Federation of Air Pilots has also said their members will vote to support Bain as the new owners of Virgin.

Mr Branson and Virgin Group are creditors to Virgin Australia due to unpaid fees associated with the Australian carrier’s use of the Virgin brand. The use of the brand costs the airline about $15 million a year.

Mr Branson’s support comes as Virgin Group and Bain remain in discussions about the ongoing use of the Virgin brand by Virgin Australia under Bain’s ownership.

“I have confidence in the revival plan for Virgin Australia and Virgin will be working closely with Bain to rebuild the airline and ensure it retains the spirit and character that has always marked it out from its rivals.”

“As the founding shareholder, I am extremely proud of what Virgin Australia has achieved over its first 20 years. We look forward to helping to create the next important chapter.”

Virgin Group chief executive Josh Bayliss said the company believed the Bain deal was the best way forward for the airline. “We look forward to working with them and the Virgin Australia team to help the company become a force in Australia and realise its true potential.”

Source: Financial Review

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