Virgin Australia brings competition to the Australian market, and competition keeps airfares affordable in Australia. But to keep bringing that competition, Virgin Australia needs the government’s assistance.

The COVID-19 induced economic crisis was not of Australia’s making, but it has been the decisions of the Australian government that have brought the multibillion dollar aviation sector to its knees in a few short months. No commentary here on whether the government’s decisions were right or wrong, but it is important to point out that it was not mismanagement that brought the airlines to this point of needing further government assistance to survive and recover. With the vast majority of aircraft now grounded, fixed costs are rapidly draining the airlines cash balances whilst the Coronavirus mitigation runs its course.

If Virgin Australia fails, it’s unlikely another will take its place. Consider this:

• Where’s the money for a new airline? With airlines and economies being financially decimated worldwide, it’s unrealistic that anyone would commit new capital to an airline venture.
• How long does it take to start a new airline? Safety is critical so it generally takes about 12 months to safely start a new airline.
• What sort of airline would they be? Most likely not a full service airline. A low cost airline requires less capital and less risk to start up.
• Where would they fly? A small network of profitable routes, excluding much of regional australia.

If Virgin Australia is allowed to fail, there’s no one ready to take their place.

Australian aviation will become a monopoly. A monopoly brings higher prices and less choice. Last time we saw this was when Ansett failed in 2001 – airfares were around 50% higher and it took years for Virgin Blue to bring real competition to the market. And that was in a strong economy!

Sign this petition in support of Virgin Australia’s application for a loan from the Australian Government, and keep airfares affordable.