US private equity firm Bain Capital is the new owner of Virgin Australia, with the largest group of creditors voting in favour of the $3.5 billion sale on Friday.
Unions representing many of Virgin’s 9,000 employees voted yes to the sale of Australia’s second-biggest airline at a lengthy creditors meeting.
Virgin Australia has been one of the biggest corporate casualties of the coronavirus crisis, making a third of its workforce redundant.
It was one of the Asia-Pacific region’s first airlines to fall when it was placed into voluntary administration on April 21, with debts of $6.8 billion.
It collapsed after its biggest shareholders, including Richard Branson’s Virgin Group, and the Federal Government declined to give additional funding to save the airline.
Bain Capital’s plan is now seen as the company’s fastest route to recovery.
The Boston-based firm has vowed to keep thousands of jobs, honour all employee entitlements and carry forward all travel credits and Velocity frequent flyer booked flights.
It has also said it will invest in regional services, although they will be likely cut down.
Virgin will no longer operate as a full-service carrier like Qantas, although the revamped airline will maintain key routes internationally.
When flights resume post-COVID, the airline will be operating a much smaller fleet of Boeing 737s.
Virgin Australia chief executive Paul Scurrah has said he expects to have between 30 and 60 Boeing 737s in the air by the middle of 2021, depending on demand.
Source: Reuters
