Deloitte's lead administrator Vaughan Strawbridge said the sale was a significant milestone for both the future of Virgin Australia and Australia's aviation industry more broadly. Richard Branson’s Virgin Group stands to lose much of its investment in Virgin Australia in the restructure. If Virgin disappears, which airline will take its place? A Virgin Australia plane at Kingsford Smith International Airport in Sydney, Australia, March 21, 2020. Virgin Australia has been one of the biggest corporate casualties of the coronavirus crisis, making a third of its workforce redundant. Virgin Group owned 10% of Virgin Australia. [27] The Queensland Government announced they had partnered with Bain Capital offering $200 million in return for maintain the airline being in Queensland. 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. In October 2020, Virgin Group took a 5 % stake in the company. [23] After a request for $1.4 billion loan from the Federal Government was rejected, in April 2020 Virgin Australia Holdings was placed in voluntary administration with Deloitte appointed as administrator. 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. But then the coronavirus pandemic hit, and the airline was left with too much debt and no incoming revenue as most international and domestic flights were grounded in late March. A Known Brand Bain Capital managing director Mike Murphy said the firm could now start the "rebuilding process". Who are Bain Capital and what do they have planned for Virgin Australia? The deal will be signed within 15 business days and will then have to get Federal Court approval for the transfer of the shares in Virgin Australia to Bain Capital. Brett Godfrey, the-then chief executive of Virgin Blue, said in 2006 that the decision "was a long considered one and has worked well. [15][16] This acquisition was completed in February 2015 with tigerair becoming a fully owned subsidiary of Virgin Australia Holdings. Qantas boss Alan Joyce talks to Kerry O'Brien on ABC Radio National's Big Ideas. [21][22], In March 2020, Virgin Australia halted all flights from international sector and in early April 2020, all domestic flights except for some services from Sydney to Melbourne due to the COVID-19 pandemic with 8,000 staff would be stood down. He’s currently seeking a UK government bailout to save his struggling airline Virgin Atlantic, and has even offered his luxury resort on Necker Island as collateral. Virgin would retain the Tigerair name and acquire the brand rights for Tigerair to operate to some international destinations from Australia. REUTERS - Loren Elliott Text by: NEWS WIRES Here's what to say. Virgin Australia is currently owned by a number of major shareholders including Sir Richard Branson. Bain's offer includes the payment of all $450 million in worker entitlements and all $2.3 billion of debt Virgin owes to secured creditors. It has also said it will invest in regional services, although they will be likely cut down. [32] The building, with about 13,220 square metres (142,300 sq ft) A-Grade office space, was triple net leased to Virgin Blue. In January 2011, Air New Zealand purchased a 15% shareholding in Virgin Blue Holdings. "Virgin Australia will not be a low-cost carrier and will continue to maintain a two-class cabin offering," the statement said. April 21, 2020 at 3:19 pm . Its head office is located in South Bank, Brisbane. ", "Virgin Australia boss John Borghetti slams analyst's cashflow 'crisis' claim", "Virgin Australia stands down 8,000 of its 10,000 staff", "Virgin Australia suspends domestic flights during coronavirus crisis", Virgin Australia forced into voluntary administration, thousands of jobs at risk, after coronavirus restrictions cripple cash flow, Shortlist of four suitors in the running to take over Virgin Australia, "Virgin Australia HQ to remain in Brisbane under Government's $200m deal with winning airline bidder", Bain Capital becomes the new owner of Virgin Australia after creditors agree to $3.5 billion deal, "Richard Branson Sticks With Virgin Australia And Buys 5% Stake", Virgin Blue National Headquarters, Brisbane - new 12 year lease, Virgin Blue In State Of Excitement Over New Invest Queensland Campaign, "Sydney chosen to be headquarters of V Australia", Timeline of Richard Branson's business ventures, https://en.wikipedia.org/w/index.php?title=Virgin_Australia_Holdings&oldid=1012256628, Companies formerly listed on the Australian Securities Exchange, Australian subsidiaries of foreign companies, All Wikipedia articles written in Australian English, Pages using infobox company using trading name, Creative Commons Attribution-ShareAlike License, This page was last edited on 15 March 2021, at 12:48. The airline has since grown to directly serve 33 cities in Australia, from hubs in Brisbane, Melbourne and Sydney. Virgin Australia owed more than $6.8bn to more than 12,000 creditors, including employees, banks, aircraft financiers and landlords, when its … With the appointment of chief executive Paul Scurrah in March 2019, the company undertook a strategic review designed to simplify the business and drive cost reduction. He said they had been given assurances from Bain Capital to retain regional operation Vara, tiered cabin classes, airport lounges and the airline's international arm. Virgin is part owned by Singapore Airlines and Etihad which in turn are owned by the governments of Singapore and Abu Dhabi. Mr Scurrah said it was vital for Australia to have two major airlines. After being placed in administration in April 2020, it was purchased by Bain Capital in August 2020. Air New Zealand's partnership with Virgin Australia ceased not long after the decision to withdraw from the board and sell its equity stake. In 2008 the group announced a plan to distribute 98.3% of its shares in the company to its shareholders, thus making itself no longer a majority stakeholder. 6:25am, Apr 21, 2020 Updated: 4:14pm, Apr 25. The firm Sunland Group, which had acquired the Bowen Hills site for $8 million in 2005, had scheduled to complete the new head office in March, and the airline would be ready to move into the new head office by August of the following year. Bottom line. Virgin Australia has entered voluntary administration. HNA Group, the parent company of Hainan Airlines, owns a stake in Virgin Australia. [4], In early 2005, Patrick launched a hostile takeover for Virgin Australia Holdings. He now wants to run at the Olympics, placed into voluntary administration on April 21, offer includes the payment of all $450 million in worker entitlements, Virgin Australia may have traded while insolvent, administrator Deloitte says. Virgin Australia had once sought to be a full-service carrier in direct competition to Qantas. Virgin 3:52pm Sep 9, 2020 Bain Capital becomes new owner of Virgin Australia While Avation PLC can take its planes back, it faces next … [33], As the airline started operations, it decided to place its head office in the Brisbane area. Despite taking a financial hammering this year, Mr. Branson appears keen to maintain an interest in Virgin Australia. Air New Zealand CEO, Christopher Luxon announced intentions to resign from the Board of Directors for Virgin Australia. "There have been long and difficult days and our thoughts are with the 3,000 workers who will no longer be with the airline," he said. On 26 June 2020, the administrators announced that Bain Capital's bids to acquire Virgin Australia had been successful with current equity holders being wiped out. [5], In 2003, Virgin Blue Holdings Limited was floated on the Australian Securities Exchange as Virgin Group sought to sell down its holdings. [10] In September 2012, Etihad Airways purchased a 10% shareholding, this was later increased to 20%. The airline is dominated by Qantas in essentially a two-player market in Australia and hasn’t made an annual profit for seven years. Jun 26, 2020 1 Comment The fate of Virgin Australia has been sealed and that the airlines new owner will be Bain Capital as the only competing bidder in the process, private equity firm Cyrus Capital has withdrawn it’s bid. [24][25] It continued to trade whilst Deloitte sought to sell the business, with Bain Capital, BGH Capital, Cyrus Capital Partners and Indigo Partners shortlisted to bid. Etihad said it was unable to provide additional funding to Virgin Australia as … [4] In return for a 50% share of the company, Patrick invested $260 million. Before Friday's vote, a spokesman for Virgin Group and the Branson family told ABC News they supported Bain's plan for the revival of Virgin Australia. It was also announced that Air New Zealand were unaware of its position of whether they were divesting all or part of their shares.[31]. Mr Strawbridge said there was "still a lot of work to do" to complete the airline's restructure. Furthermore, they are planning on returning Virgin's A330's to lessors and mothballing their 777-300ER fleet until 2021. Subject to being approved by creditors, the deal is expected to be finalised in August 2020. 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. I am happy with Virgin Australia, not for ceasing operations, but for a group of 10 entrepreneurs to decide to recapitalize the company. Transport Workers' Union national secretary Michael Kaine called it a "new beginning and an important day for Virgin and for Australian aviation". Virgin Australia will cease operating flights from Sydney to Hong Kong from 2 March 2020. 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’s billionaire founder Sir Richard Branson, who owns 10 per cent of Virgin Australia and whose estimated wealth is $9.2 billion, is in a similar boat. The sale was approved by creditors on 4 September 2020. Bain's aim, he said, was to minimise disruption as they "build a stronger, more profitable and competitive Virgin Australia". In 2000, the Virgin brand entered the Australian aviation market for the first time, bringing real competition in the leisure sector of the market. This is expected to be completed by October 31, and a creditors' trust will be created to consider claims and pay creditors. [29] Virgin has more than 10,000 creditors, the bulk of whom are its 9,000 employees, but which also include bondholders and aircraft lessors. These were your answers, Cowboys add to Bulldogs' woes, Warriors end Dragons' winning streak, Byron Bay goes to war with Netflix over 'hot Instagrammer' reality series, Ben Askren apologises to the world for losing to YouTuber Jake Paul, Massive government spending has supported the economy — and the banks are benefiting, Triumphant Lions return to warm welcome in Brisbane after stunning AFLW grand final win, How long will the Queen mourn? Four firms were initially shortlisted by Virgin Australia's administrators to bid for the airline, this is what we know about them. There will be no return to Virgin's major shareholders, which include Singapore Airlines, Etihad Airways, China's Nanshan Group and HNA and Sir Richard Branson's Virgin Group. Prior to the vote, key union, the Transport Workers Union (TWU), and Virgin Group founder Richard Branson both indicated they would back Bain Capital's plan to buy the troubled airline. Virgin Australia is reportedly the target of at least two private take-over bids as both the government and its major shareholders turn their backs on a bailout. [20] A month later Virgin Australia CEO John Borghetti wrote to the airline's pilots to reassure them the airline was in a sound financial position following publication of a report suggesting the airline was approaching insolvency. Deloitte has estimated the return to be between $462 million and $612 million. [18] A month later Air New Zealand sold 19.9% of VAH to Nanshan Group (majority owner of Qingdao Airlines);[19] and in October, Air New Zealand sold its remaining 2.5% of VAH to Nanshan Group (majority owner of Qingdao Airlines). [36], Virgin Village, the Virgin Australia Holdings former head office in, "Virgin Australia to sack 3,000 staff, dump Tigerair brand", "Virgin Australia to exit Bowen Hills for Flight Centre's Southbank HQ", "Virgin Blue boss jokes about buy-out deal", "Virgin Blue - Defining a New World Carrier", "Patrick's move on Virgin Blue has a sense of déjà vu about it", "Toll Announces Payment of an in Specie Dividend To Toll Shareholders, Satisfied By Distribution of Virgin Blue Shares", "Toll quits Virgin Blue, books $1.3 billion loss", "Air New Zealand pays $188.9 million for Virgin stake", Air NZ revealed as buyer of 3pc additional Virgin stake, Singapore Airlines buys 10% stake in Virgin Australia, Singapore ups Virgin stake to 20 per cent, "Virgin Australia pays $1 for Tigerair stake", "Virgin Australia plans full ownership of Tigerair Australia", "Billionaire Chen's HNA to Acquire Stake in Virgin Australia", "Air NZ sale of Virgin stake to Nanshan completed", "Air New Zealand sells off remaining Virgin Australia stake", "Virgin Australia flying towards insolvency? Along with China, … It owns just two widebodies planes, 18 single-aisle jets (including six A220s and the pair of Fokkers formerly at Virgin Australia). Despite repeated requests for the Federal Government to bail-out the airline, the Morrison Government has constantly said it prefers to leave the market to sort out its own problems. Virgin Australia Holdings Limited is the holding company that owns and operates Virgin Australia, Virgin Australia International Airlines and Virgin Australia Regional Airlines. Virgin Australia will start a new but much smaller life under Bain Capital, which on Friday entered an agreement to buy and recapitalize Australia’s second-largest airline. I’m hoping for the best outcome for the airline here, as this is an airline I really want to see survive.I love Virgin Australia as such, and even more than that, it’s important for Australia to at least have two semi-global full service airlines. April 16, 2020 10.23pm EDT. Qantas thinks Virgin Australia deserves nothing. [14] In October 2014, Virgin Australia Holdings announced plans to acquire the 40% stake of Tigerair Australia still held by Tiger Airways Holdings for $1, giving Virgin full ownership. He acknowledged the airline's 3,000 employees who will lose their jobs and "the difficulties that this will cause them and their families". The government just turned off a $90b tap of cash. Bain's deed of company arrangement (DOCA) was also supported by the Australian Federation of Air Pilots and Virgin Independent Pilots Association. "While we can feel very proud that we have got to this point, the impact of COVID-19 remains very challenging for our business and industry. [17], In May 2016, HNA Group (part owner of Hainan Airlines), announced plans to purchase a 13% stake in Virgin Australia Holdings, which if approved will see existing owners' shares diluted. 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. The company’s new owners may find they don’t need it, Shabat said. Tiger Airways Australia Pty Ltd, operating as Tigerair Australia, was an Australian low-cost airline.Founded by Tiger Airways Holdings, it commenced services in the Australian domestic airline market on 23 November 2007 as Tiger Airways Australia.It later became a subsidiary of Virgin Australia Holdings.On 25 March 2020, Tigerair suspended all operations as a result of the COVID-19 pandemic. [6] At the time Toll Holdings owned 62.7% of the company and had previously attempted to sell the share to no avail.[7][8]. Three frontrunners have emerged in the race to buy Virgin Australia. Victorian vaccination hubs to open up as AstraZeneca jabs resume for under 50s, PM 'in no hurry' to open borders as he pleads with eligible Australians to get vaccinated, NSW records three locally acquired cases of COVID-19 in hotel quarantine, 'You only get one chance to properly recover': Daniel Andrews's return to work delayed, Scott Morrison reveals $1bn energy deal with SA government, Victoria urged to consider anonymous reporting of sexual assaults, Silenced by the justice system, now Zack wants everyone to know what the judge couldn't hear, Cats tame Kangaroos as Demons maintain perfect start to AFL season, Abdoulie Asim lived under a bridge after seeking asylum in Australia. 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. [12] The same month Virgin Australia Holdings announced it had purchased a 60% stake in Tiger Airways Australia with the transaction concluded in July 2013. Please note flights VA7468 and VA7469 between Sunshine Coast and Auckland, from 29 October 2017 onwards, are subject to government approval. "We will also hold the Federal Government to account over its failure to support Virgin and the wider aviation industry," he said. [2] After being placed in administration in April 2020, it was purchased by Bain Capital in August 2020. A month later Singapore Airlines bought a 10% stake in Virgin Australia Holdings. ... Virgin Australia is 90 per cent foreign-owned, with Singapore Airlines, Etihad Airways and Chinese … On 17-Nov-2020, Virgin Australia stated Deloitte Restructuring Services partners, and joint Virgin Australia voluntary administrators Vaughan Strawbridge, John Greig, Richard Hughes and Sal Algeri announced the completion of the sale of the Virgin Australia Group, with the shares and the entire business of the airline being transferred to Bain Capital. [28] Bain's plan include shutting down the Tigerair brand, reducing fleet size for 130 to 70-80 aircraft. Some bondholders had tried to overrule the binding sale to Bain Capital in the Federal Court, fearing they would see as little as 10 cents in the dollar for their debt. Nanshan Group Co. each own about 20% of the company. Virgin Australia Holdings has its head office in Virgin Village in Bowen Hills, Brisbane. "Customers who continue to fly Virgin Australia are not likely to notice any differences moving forward.". It is the largest airline by fleet size to use the Virgin brand. [35] The current head office facility, Virgin Village, formally opened on 17 October 2008. This service may include material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be reproduced. Before Friday’s deadline for non-binding initial offers, investment firms Brookfield, BGH Capital and Bain Capital have emerged as the favourite parties to lead consortiums that buy the beleaguered airline. [3] In 2002, Virgin came to an agreement with Patrick Corporation to invest in the airline, to allow it to grow into a national airline, filling the void following the demise of Ansett Australia. Over half (58%) of its owned planes are post-2020 friendly ATRs. She said the Government "must step up to ensure the aviation industry has a clear path out of this recession". ACTU president Michele O'Neil said the union would continue working with Bain Capital and Virgin management to "ensure they keep to their commitments and that Virgin workers who stay with the airline are treated with respect, and have good jobs with fair pay and conditions". Richard Branson’s Virgin Group owns about 10%. The Government has provided all airlines some level of support, however, due to all domestic carriers having to ground flights because of the COVID-pandemic. [11] In April 2013 this was increased to 20%. As of 2008, 1,000 employees work at Virgin Village. Virgin Australia owns the discount carrier, which struggled before Covid 19. "[34] The airline originally had its head office in Fortitude Valley. Bondholders had pumped about $2 billion into the airline before its COVID-induced troubles began. The timing of the payment of the dividend to creditors is expected to happen within six to nine months. He also noted the "numerous suppliers and investors who will not receive all of the monies owed to them". Virgin Australia 737 business class. [9] In June 2013 this was increased to 23%. ... April 2, 2020 at 8:10 am . Virgin Australia History. Virgin Australia is reportedly set to cut flight routes across regional Australia as part of its rebuilding project. Virgin Australia had about A$1.1 billion in cash at the end of 2019. Bain Capital's plan is now seen as the company's fastest route to recovery. It commenced services on 31 August 2000 as Virgin Blue, with two aircraft on a single route. There were suggestions that former Jetstar chief executive Jayne Hrdlicka might step in as the new chief executive. Virgin Group retained a 25% share. American private equity firm Bain Capital will be the new owner of Virgin Australia after its only rival pulled out of the race in a shock move. 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. Firstly, Virgin Australia is 90 per cent owned by offshore airlines including Etihad Airways, Singapore Airlines, Nanshan Group, HNA Group, and Richard Branson's Virgin Group. Royalty income for 2018 was £94.3m, a third higher than four years earlier. It previously operated Pacific Blue Airlines, Tigerair Australia and joint-venture airline Polynesian Blue which were absorbed into Virgin Australia in December 2011. Administrators for the airline, Deloitte, … Virgin Blue Holdings was formed in 2000 as a wholly owned subsidiary of the Virgin Group. In April 2013, Virgin Australia Holdings completed its acquisition of regional airline Skywest Airlines and rebranded it Virgin Australia Regional Airlines. AEST = Australian Eastern Standard Time which is 10 hours ahead of GMT (Greenwich Mean Time). We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work. "Binding offers will then be required in June. Virgin Australia Holdings Limited is the holding company that owns and operates Virgin Australia, Virgin Australia International Airlines and Virgin Australia Regional Airlines. [26] The administrator listed Bain Capital and Cyrus Capital Partners to make final bids. Air New Zealand's stake would become 22.5%, Etihad would hold 21.8%, Singapore Airlines 20.1% and Virgin Group 8.7%. "Bain has the resources, aviation experience, and long-term vision to bring this plan to life.". Stephen Fankhauser, Matt Ebbatson, ... Virgin Australia is 90% owned by five international companies – Etihad Airways, Singapore Airlines, China’s Nanshan Group … Some 35 businesses around the world pay to use its brand; Virgin owns equity in under half of them. At least two buyout groups were preparing to take over Virgin Australia, the Australian Financial Review reported last week. Its head office is located in South Bank, Brisbane. How will this 'boom or bust' of the aviation industry be different from those of the past? By the closure of the offer, Patrick held 62% of the company, giving it control. This, it said, would include frequent capital city connections and services to leisure and regional markets as well as a network of lounges in key cities across Australia. Until a new airline can establish itself as a formidable competitor to almighty Qantas, consumers may lose out with higher fares and reduced flight options writes Nassim Khadem. "These are tough times and we must remain focused and adapt to this new environment.". Stock analysis for Virgin Australia Holdings Pty Ltd (VAH) including stock price, stock chart, company news, key statistics, fundamentals and company profile. In 2001, the then Air New Zealand owned Ansett Australia made a buyout offer of $250 million, which was publicly rejected by Richard Branson. It suddenly found itself as a major airline in Australia's domestic market after the collapse of Ansett Australia in September 2001. Virgin Australia owes almost $7b to more than 12,000 creditors, 'No job losses planned' as Virgin Australia goes into voluntary administration, Charting the jab: More than 60 countries are vaccinating their people faster than Australia, We put your questions about coronavirus vaccines to health experts — here's what they said, Know someone feeling concerned about the COVID jab? [13] Tiger would continue to operate as a low cost subsidiary of Virgin Australia for 20 years. Strawbridge confirmed that the first round of "non-binding indicative offers" for Virgin Australia are due by May 15, 2020. The airline purchased a $61 million site in Bowen Hills for its new head office. "[This is needed] for consumer choice, value airfares and to help support the recovery of Australia's robust tourism sector after this crisis is over," he said. [30], In March 2016, Air New Zealand announced plans to divest itself from Virgin Australia Holdings. We asked you what you learnt from a year of lockdowns. Essentially, the Australian government would be providing aid to an airline that’s majority foreign owned. However, there was some union pushback and she is expected to take a board role, possibly as chair, following on from her advisory role to Bain during the bidding process. What happens now? We remain confident that our target of achieving a sale by the end of June is achievable." However, these efforts were unsuccessful and they are only expected to get a return of between 9 and 13 cents on the dollar. Officially until Thursday, but then the next struggle begins, 'Alarm bells': It's taken 160 years but arrival of this little bird is no myna problem, Tasmanian voters asked to decide between Liberals' COVID management and Labor's health, housing pitch, This Adelaide teen just won a world champion title in a sport you may not have heard of. Virgin Australia is 90 per cent foreign-owned, with Singapore Airlines, Etihad Airways and Chinese conglomerates HNA Group and Hanshan owning 80 per cent between them, while Richard Branson’s Virgin Group still owns 10 per cent. "We have a strong relationship with Bain through building Virgin Voyages and they understand what it takes to create a modern Virgin business," the spokesman said. Virgin Australia is ten per cent owned by billionaire Sir Richard Branson, who is battling to save his UK business Virgin Atlantic. By creditors on 4 September 2020 corporate casualties of the offer, Patrick Corporation was taken over by Toll,! 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