Yesterdays "Australian" - behind a paywall
Expectations are mounting that Virgin Australia will receive government assistance to stave off collapse, with suggestions key decision—makers have long memories about the windfall reaped by Qantas after Ansett Australia collapsed in 2001.
Virgin Australia has gone cap- in-hand to the federal government asking for a $1.-4bn loan, which if not repaid would see the government take an ownership stake within two or three years.
Singapore Airlines, HNA, Etihad and China’s Nanshan all own about 20 per cent of the airline, and Virgin Group about 10 per cent, while the rest is publicly listed.
The understanding is that Singapore Airlines would have been willing to bail out the Australian carrier. However, some believe the government would be hesitant about the foreign airline gaining a foothold in the Australian market. Singapore Airlines is essentially owned by the Singaporean government.
Preventing Singapore Airlines from owning Virgin Australia would in fact offer protection for the government-backed Qantas.
Singapore Airlines was also understood to have been keen to buy Ansett when that airline collapsed.
The dilemma for the federal government is that if it does not offer help to Virgin Australia, it faces a situation where Qantas would have a market monopoly, to the potential detriment of Australian travellers.
This is if it also disallows full foreign ownership.
Qantas made attempts to seek assistance from the federal government in the aftermath of the global financial crisis around 2014, but the treasurer at the time, Joe Hockey, declined the request.