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Virgin is $7 billion in debt, so why is NSW so keen to snatch it from Qld?

The Queensland Government appeared to be outpointed by the southern states after NSW put together a strategic team led by a former Macquarie Bank executive Michael Carapiet to lure a revived Virgin Australia south of the border.

Apr 28, 2020, updated Apr 28, 2020
Queensland and NSW are battling to be headquarters for a reborn Virgin Australia.

Queensland and NSW are battling to be headquarters for a reborn Virgin Australia.

But Queensland has maintained its win at all costs mantra in a fight that it described as a “moving feast” to keep the company’s headquarters in Brisbane and points out it is the only state to put money on the table.

NSW wants the airline to be based at its new western Sydney airport, but that is not expected to open for another five years, while its existing airport at Mascot is already stressed.

The state has not yet made any financial offer for the airline but its bid is considered serious and NSW Treasurer Dominic Perrottet told the AFR that Carapiet would provide strategic guidance.

“Mr Carapiet has extensive experience in banking and financial services, and extensive governance and board experience with private and government entities,” he said.

“The government believes a competitive airline industry is vital for the people of NSW and the future of the state’s economy.”

Victoria is also considering an offer expected to be as high as $500 million and has Lindsay Fox on board.

Queensland State Development Minister Cameron Dick has played down NSW’s attempts as a pea shooter versus a bazooka.

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“The Queensland Government is the only government to put money on the table for Virgin,” the Minister said.

 “The Department of State Development has been working on this for weeks and continues to work closely with the administrator.

 “It’s a moving feast, and as the administrators and my team continue their work, it will become clearer how a new second airline would look.

“But we have been very clear that it must remain headquartered in Brisbane, there must be federal support, and there must be regional flights.”

Virgin’s 10,000 creditors are owed about $6.8 billion.

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