Virgin Australia, is an Australian airline which among Australia is the second largest airline. It was started in 2000 with a single route and two aircrafts. The global condition has set the airline to file bankruptcy protection in the last few weeks. Due to the coronavirus shutdown, debt crisis within the company was created.
The company has not posted profit since last seven years and owe about 5 billion Australian dollars. It is a threat to face when the virus grounded the aviation industry and suspended flights. The company approached Government for emergency loan but government denied because of the fear of transferring money to the foreign airlines who owns the company, technically to its shareholders.
And as to seek help from investors and other airlines to restructure their own airline. India’s biggest airline, Indigo, is in the Virgin Australia list to put together a proposal which will benefit the investment in own ways.
Indigo has denied its willingness or any kind of interest to seek or acquire the airlines. It stated that Indigo has not formulated any such proposal and neither does it have any interest in such matters.
This news was a surprise to all carries including Indigo with no clue of such instinct as Indian companies are focusing on maintaining the profitability and ensuring continuity of business. This shutdown has led the Aviation Sector to reduce costs, fire employees and salary cuts.
An executive at a rival airline claimed on behalf of Indigo, without their knowledge, that they are looking to deploy their hundreds of A320s on order and Australia looks a opportunity if they can replace Virgin Australia. To which Indigo expressed their denial in any such matter.
As soon as the markets opened on Tuesday morning, Indigo’s share price jumped by 2.66% after the announcement made, instead the rest of the market melted.