High hopes for Virgin
VIRGIN Australia’s fleet will remain intact as a buyer is sought for the embattled airline after administrator Deloitte won a court order effectively preventing planes from being seized.
And shares in major travel companies have surged after Federal Treasurer Josh Frydenberg signalled the government may provide extra support to the struggling tourism sector.
Deloitte sought the order, extending until June 16 its exemption from personal liability for the cost of the Virgin leases.
By that time, Deloitte hopes to have a binding offer for Virgin that will include details of what aircraft leases the buyer wants to keep.
Federal Court judge John Middleton yesterday granted the order over 142 aircraft and engines in the Virgin fleet that are subject of lease agreements.
Aircraft lessors had previously raised concerns about non-payment for planes being used by Virgin for revenuegenerating charter flights and government-subsidised flights.
More than 70 lessors and financiers are owed $1.88 billion by the airline. Deloitte has already whittled down the potential buyers to a short-list of four and is expected to cut this to two who will submit final, binding offers.
The developments at Virgin yesterday coincided with a surge in share prices among travel companies after Mr Frydenberg said struggling sectors such as tourism may receive more government support.
Next month, the government is due to review the JobKeeper wage subsidy program that was rolled out to support the economy during the pandemic. Asked on radio about the review and potential support for specific industries, Mr Frydenberg said the government wanted to “provide support for those sectors that are going to do it tough in the longer-term, like tourism, as a result of the international borders being closed”.
Many workers were forecast to go back to work as restrictions were eased, he told the ABC.
“But there’ll be some sectors … like tourism, that will find it more difficult to get back on their feet because the border restrictions will still be in place at an international level,” Mr Frydenberg said.
Flight Centre shares jumped 15.2 per cent to $13.01 while online agent Webjet spiked 15.6 per cent to $4.16. Helloworld Travel rallied 10.7 per cent to $1.65.