Virgin Australia administrators announced that two potential buyers remain to compete for the airline takeover, after its collapse in April 2020 amidst the global aviation crisis due to the coronavirus COVID-19 pandemic.
Administrators from Deloitte revealed the names of the final two bidders, after the withdrawal of BGH Capital and its partner AustralianSuper. Bain Capital and Cyrus Capital Partners are the two last candidates. The binding agreement with the winning bidder should be concluded by June 30.
The bidders have presented two different strategies for the future of the second biggest airline in Australia.
Cyrus plans to continue operating Virgin Australia as a full-service carrier and compete with Qantas. Cyrus was one of the initial partners of Richard Branson when Virgin America was launched in 2005. Similarly, it was alongside Virgin Atlantic for the buyout of the British airline Flybe, which collapsed at the beginning of the coronavirus crisis.
Bain seems to envision a more classic low-cost strategy, going back to the roots of Virgin Australia, when it was still known as Virgin Blue in the early 2000s. But fear of social dumping and a history of hostility towards industrial actions in the United States made Virgin Australia’s unions suspicious.
“Both Bain Capital and Cyrus Capital Partners are well funded, have deep aviation experience, and they see real value in the business and its future,” commented Deloitte administrator Vaughan Strawbridge.
The fierce competition between two strong bidders at a time when most airlines are grounded shows the potential of the Australian market in the long-run.
The coronavirus pandemic came as a final blow to Virgin Australia Group, which owed nearly $4.76 billion to creditors when it entered voluntary administration in April. It employed approximately 10,000 people directly. Already a thousand were laid off, while 8,000 were put on temporary leave. Since it entered administration, the airline continued to operate domestic routes and government-chartered flights to repatriate Australian nationals.