Virgin Australia has requested a halt in the trading of its shares while it discusses financing and restructuring options.
The airline, which has requested a A$1.4 billion ($900 million) bailout from the federal government, said today it plans to come out of the trading halt on the morning of 16 April or when it issues a statement, whichever comes first.
“Virgin Australia requests a trading halt as it continues to consider the issues brought about by the Covid-19 crisis including discussions with respect to financial assistance and restructuring alternatives which are ongoing,” it said in a stock-exchange statement.
The carrier has grounded virtually all its operations, leaving only one domestic route and some charter flights in light of travel restrictions that have decimated demand. It has also suspended operations at its TigerAir subsidiary and shuttered its New Zealand crew base in a bid to reduce costs.
The Australian government has yet to address directly whether it plans to grant Virgin Australia’s loan request.
Deputy prime minister Michael McCormack said on 12 April that Australia wants a two-airline industry, but also highlights that the government is already providing A$1 billion worth of support and relief to the industry. Media reports have suggested that Canberra could instead help a new airline enter the market as a rival to Qantas.
Qantas has on 25 March moved to shore up its balance sheet by securing a A$1.05 billion loan against seven of its Boeing 787-9s. Virgin Australia however, having posted losses over its last seven financial years, may struggle to find funding as easily as Qantas.
Virgin Australia’s chief executive Paul Scurrah has previously said that the carrier is also talking to its shareholders about financing, but pointed out that as airline groups, they are experiencing the same cash burn issues from the coronavirus crisis.
The airline’s main shareholders are Etihad Airways and Singapore Airlines, along with Chinese conglomerates Nanshan Group and HNA Group, as well as original founder Richard Branson.