What’s next for Virgin?

Eight bidders lodge offers for struggling airline

THE State Government is believed to be linked to one of the three “advanced” bidders for Virgin Australia as administrators yesterday took offers and prepare to shortlist the best ones.

Although not itself a bidder, Queensland Investment Corporation, tasked by the state government, is believed to be working with global investment firm Brookfield Asset Management.

It along with investment behemoths BGH Capital, Bain Capital and India’s InterGlobe

Enterprises are tipped to be the main contenders for the beleaguered airline.

The first milestone in the battle to buy Australia’s second-largest carrier was reached at 6pm yesterday when the time for non-binding bids closed.

Eight serious bidders were understood to have lodged an offer despite almost 20 parties circling the airline earlier in the week.

Queensland Investment Corporation, a late entry into the race, did not lodge an offer but remains in talks about joining a frontrunner next week.

Deloitte lead administrator Vaughan Strawbridge said the first offers would be assessed over the next few days before a shortlist of bidders are granted access to the next stage.

Binding offers will be called by June 12 ahead of an expected sale of the airline by the end of June.

The eight bidders have already been handed the forward-looking “Virgin 2.0” business plan and will secure access to more high-level company details within days. The bidding process continues while more than 8200 of Virgin Australia’s 10,000 employees claim a total of $24.8 million in JobKeeper payments.

Mr Strawbridge said the “aggressive” speed of the administration was needed “to drive the best outcome, an outcome that preserves as many jobs as possible”.

Millions of Velocity Points have also been unfrozen to exclusively redeem on domestic flights from September 1.

Points were frozen in April amid Virgin Australia’s administration.

“We’re hopeful that domestic travel restrictions and state and territory border lockdowns ease by September and for many of us, a local holiday and catching up with interstate family and friends will be well overdue,” a Velocity spokeswoman said.

Velocity is a separate company to Virgin Australia and is not affected by its administration.

RMIT School of Management

senior lecturer Warren Staples said the new owner of Virgin Australia must have a plan for its revival.

“What’s needed in any Virgin Australia bidder and replacement is an entity with deep pockets, a measured strategy, operational smarts and lots of patience that’s what has the best chance of making a go of it,” he said.

“We tend to think of aviation as a public good and preserving competition as important – but it is likely that a far more measured strategy will be needed from any Virgin Australia replacement,” Mr Staples said.