Will Virgin Australia survive this lockdown?

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I still remember the time around the collapse of Ansett. It was a daily talking topic on radio and TV. There was a last minute rescue attempt by Aussie billionaires which gave a glimpse of hope to the many employees but unfortunately did not eventuate.

Ansett Australia was a major Australian airline group, based in Melbourne. It flew domestically and to destinations in Asia. After operating for 65 years, the airline was placed into voluntary administration in 2001 following a financial collapse.

Airline business is tough. While it is an essential service for the global economy not many make a lot of profit.

Covid19 has already taken many lives, wrecked marriages and destroyed careers. It is also going to create more monopolies by killing off smaller and weaker competitors.

Virgin Australia has reportedly filed for voluntary administration after the struggling airline asked the government for a $1.4 billion bail-out.

Companies in the Travel, Transport and Tourism verticals are severely affected by this lockdown. Almost all demand has vanished overnight and it is now incredibly difficult to keep businesses like Virgin Australia afloat without a massive cash injection.

Until a vaccine is approved for covid19 and its related strains our lives won’t return back to Pre-lockdown days. We are certainly facing a vastly new world.

I don’t think Virgin Australia will be able to find a way out of this. I still hope I am wrong.

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