Interview with Prof Greg Bamber, Monash University

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Interview with Prof Greg Bamber, Monash University. Bartholomew says the administrator for Virgin Australia has narrowed down the shortlist of potential buyers who may take over the airline and prevent its collapse. Deloitte did not identify the interested parties due to confidentiality but the ABC confirms that Bain Capital, BGH Capital, Indigo Partners, and Cyprus Capital Partners are the four likely bidders to take over Virgin. They have until mid-June to make final offers for Virgin which has a debt of almost $7bn. Bartholomew wonders if it’s fair to say that airlines have not been a great investment in the past with even investment guru Warren Buffet selling his aviation stocks. Bamber says aviation is a risky investment but the Australian market has a high degree of potential and Virgin Australia is an attractive investment because there's a high degree of determination in Australia to not let Qantas become a monopoly as seen after the Ansett collapse. He says it’s in the public interest for there to be competition. Bartholomew wonders how Bamber would rate Virgin as an investment asset. Bamber says the airline has significant potential but it would be a high risk for the airline to go back to international routes currently. He says the domestic market is a great way to begin and it could go back to international travel if it grows. Bamber says air travel will come back slowly but he believes domestic travel will pick up faster as people look to travel again. He adds that it would also be important for the government to have a plan for the industry which is a form of public transport. Bamber admits that he would rather see a long-term investor come in, an investor committed to Australia and its industries, the public, and the stakeholders. Bartholomew wonders about the Qld Government's plan to buy a stake from Virgin. Bamber says it’s a smart move. He says that would be a small stake, but Virgin is important to Qld. Bamber says some think that the government should stay away from airlines but some of the most successful airlines in the world are owned or partly owned by the government like Singapore, Air New Zealand, and the big Middle Eastern airlines. Bartholomew says Virgin Australia is allowing Velocity points holders to use their points to travel domestically. Bamber says it's important for the new owners to honour the credit people have.

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