Virgin Australia has entered an agreement to be acquired by
US private equity group Bain Capital after filing for administration in April
as a result of the coronavirus pandemic.
The carrier, which is currently owned by several
shareholders including Sir Richard Branson, had reportedly been struggling with
debts of £2.55 billion before the crisis and failed to agree a government loan
to survive a downturn in traffic caused by the virus.
According to administrator Deloitte, Bain Capital supports
the airline’s turnaround plan and has committed to retain jobs. It will also
provide a “significant injection of capital” to help the company recapitalise.
With Bain Capital’s acquisition, Virgin Australia is closer
to being able to re-launch, according to a statement from Deloitte. The sale is
expected to be completed by the end of August.
The news comes as Virgin Australia’s rival Qantas is
planning to cut 6,000 jobs in a restructuring programme to survive a long-term
decrease in passenger demand, particularly on its long-haul network, which has
been grounded until October.
Meanwhile, Branson’s other airline Virgin Atlantic is still
seeking extra funding to help it survive the crisis brought on by the pandemic.
Branson is trying to sell a stake in his Virgin Galactic business to support
his travel companies and has offered his private Necker Island as collateral
for a government loan, but no deals have been struck yet.