Interview with Prof Greg Bamber, Department of Management, Monash Uni.

Description

Interview with Prof Greg Bamber, Department of Management, Monash Business School. Hall reports up to 16,000 Virgin Australia employees remain in limbo as administrators pour over the finance of the airline after it went into voluntary administration. She notes CEO Paul Scurrah is optimistic the airline can survive but many aviation experts believe the airline will emerge as a much leaner enterprise. Bamber says it's possible for companies that go into voluntary administration to survive and adds he would be very optimistic about Virgin Australia being able to come out of the process in a leaner form than it currently is but with every prospect of success. Hall mentions Virgin is saddled with a massive debt. Bamber says the administrators are in a position to confront that challenge. He notes some of the debt consists of junk bonds that have been issued as well as leasing costs for some aircraft. He states Virgin might have to give up some of its international or regional routes which have not been profitable. Bamber remarks Qantas and other airlines have also been struggling to make money. He claims it's important to Australia for Virgin to survive as a second major airline. He states we don't want to see a monopoly in the air because it would lead to an increase in prices and a reduction in service. Bamber thinks a lot of the jobs in Virgin will be retained though there will be some losses. He encourages the administrators and the new management team to retain as many workers as possible. He mentions the airline had built up a great culture. Bamber adds the Federal Government should be more strategic in trying to assist with the future success of Virgin Australia and not be stubborn and short-sighted about it by refusing to be involved. He says the Government should take a stake in the airline and recognise that aviation in Australia is an essential service of public transport. He remarks that civil aviation a matter of national interest and should not be sold to private equity. Bamber cites three similar cases including American Airlines, Delta Airlines and United Airlines which are now three of the biggest airlines in the world who've recovered and survived from voluntary administration. He says Australians will be paying for more air travel if there's not enough competition. He claims it may take several years to recover to the level of the demands they were seeing before the COVID-19 crisis. Bamber thinks some of the top bidders for Virgin Australia include trucking magnate Lindsay Fox, who had been interested in trying to help Ansett.