Qantas attacks Virgin Australia for requesting AUD1.4 billion in government aid

In recent days, Virgin Australia became the latest airline to contemplate requesting a loan to the government in order to survive the coronavirus crisis.

Virgin Australia Boeing 737. Photo by Jack Prebble | AeroNewsX

The airline, which is known to have been in debt prior to the coronavirus crisis, could ask the Australian government for a 1.4 billion AUD loan which “may or may not include conversion to equity in certain circumstances”, according to Virgin. However, the fact that the airline is mostly owned by foreign companies such as Etihad (~21% stake) or Singapore Airlines (~20% stake), it doesn’t make the airline a clear candidate for receiving the loan

It’s main competitor, Qantas, hasn’t been slow in expressing its opinion on the topic to the public. The airline’s CEO, Alan Joyce, has stated that they don’t need a loan to survive the coronavirus crisis, adding that this crisis is a survival fight, in which only the fittest will make it through. The CEO assured that they would make sure that Qantas is the last airline standing.

However, Joyce stated that in the case that Virgin Australia received a 1.4 billion AUD loan, they should receive one of 4.2 billion AUD given that their revenue is three times bigger than their competitor’s, arguing that doing so would “level the playing field”. Qantas’ CEO also commented that businesses which are badly managed shouldn’t receive governmental aid, highlighting that Virgin Australia has been in debt for some time and is mostly a foreign-owned airline.

Qantas Dreamliner being towed in Melbourne. Photo by Duy Khang Tran | AeroNewsX

As a response to Qantas’ comments Paul Scurrah, Virgin Australia’s CEO, has sent a letter to the Australian Competition and Consumer Commission (ACCC) accusing Qantas of trying to give an untruthful image of Virgin. The ACCC has commented on the topic stating that Australia began this crisis with two full-service airlines and that it is very important that it comes out of it with two, adding that Alan Joyce’s comments on “survival of the fittest” are very unhelpful. The ACCC is currently probing Qantas for the comments which were made.

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