Battle of the bailouts, as Virgin Australia and Qantas look for billions

In an escalating war of words between rival airlines Qantas and Virgin Australia, both have now upped the ante by asking the federal government for billions of dollars to help them ride out the coronavirus crisis.

Reports that Virgin Australia has asked the government for a $1.4 billion loan to help it through the coronavirus crisis led to Qantas asking for $4.2 billion, arguing it was more deserving of the money.

Virgin Australia has been particularly hard hit by the travel restrictions that saw it ground 90 per cent of its planes.

Virgin said its bailout proposal was “subject to approval by the Virgin Australia Holdings board and the Australian Government” and “may or may not include conversion to equity in certain circumstances”.

“We have been in ongoing discussions with government about the support the whole industry will need if this crisis is prolonged,” a Virgin Australia spokeswoman told ABC News.

“Companies like ours are taking a range of measures to respond and manage the financial impact.

“However, the support we’ve proposed will be necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over.”

But Qantas CEO Alan Joyce said the aviation sector was facing a “survival of the fittest” scenario, arguing that the government should not help businesses that had been “badly managed”.

However, Qantas said that if its rival was to receive aid, then they should also be eligible for a larger bailout as its revenue was three times higher than Virgin’s.

The government had already announced $715 million worth of measures for the airline sector, including waiving certain government fees and charges on the airlines.

“I’ve been in close contact with leaders of the business community including the aviation sector, (Virgin boss) Paul Scurrah and (Qantas chief) Alan Joyce,” said Treasurer Josh Frydenberg.

“We have already illustrated our commitment to having a viable, sustainable aviation sector.”