State will ‘strike a hard bargain’ in its bid for Virgin, vows Treasurer

The Federal Government has ridiculed Queensland’s bid for a stake in Virgin Australia, branded “Project Maroon” by the state’s new treasurer.

May 14, 2020, updated May 14, 2020
Treasurer Cameron Dick. (Photo: AAP Image/Glenn Hunt)

Treasurer Cameron Dick. (Photo: AAP Image/Glenn Hunt)

Cameron Dick says he’s serious about saving 5000 jobs after the airline went into voluntary administration last month, owing almost $7 billion to 12,000 creditors.

But he hopes to get the carrier on the cheap.

“We need to strike a hard bargain. I want those foreign banks and those foreign bond holders to take a hair cut,” Dick told ABC radio.

“They’ve got to take a bath if we’re going to go forward on this.”

The state-owned funds management group Queensland Investment Corporation will advise the government on its bid, which could take the form of a direct equity stake, a loan, guarantee or another financial tool.

Home Affairs Minister Peter Dutton says it’s laughable to consider using taxpayers’ money to buy an airline in the middle of a global aviation crisis.

“Premier (Annastacia) Palaszczuk has almost bankrupted Queensland, and now in the middle of a crisis they want to buy an airline,” tweeted the federal MP, who holds the Brisbane seat of Dixon.

“It is laughable. She ‘leads’ a government which is corrupt and chaotic.”

Dick fired back telling Dutton to “just stick to cruise ships” – a reference to the botched arrival of the coronavirus-ridden Ruby Princess in Sydney.

The federal government has refused to bail out Virgin Australia, and Deputy Prime Minister and Transport Minister Michael McCormack said the solution must be market, not government, led.

NSW Premier Gladys Berejiklian says her state won’t be making a bid for the airline, and its fate should be left to the private sector.

“If the private sector is going to come in and support that airline, that’s a fantastic outcome.”

But Dick says it would be irresponsible for the Queensland Government not to have a crack at saving the nation’s second airline.

“Regional Queensland was crushed when Ansett went under,” he said.

“There is a lot of interest in Virgin Australia. Some of them aren’t necessarily going to put Queensland interests first.”

Queensland Investment Corporation chief executive Damien Frawley says the restructure of Virgin Australia is a significant opportunity for Queensland.

“We are well-equipped to manage the state’s interest in Virgin Australia Holdings should the consortium be successful,” Frawley said in a statement on Wednesday.

Dick said the airlines’ administrators, Deloitte, are seeking to conclude the sale process by June 2020, and Queensland is a serious contender.

Flight Centre chief executive Graham Turner has backed Queensland’s move, and says there’s no reason why two airlines can’t be profitable if they are properly run.

“I see nothing wrong with it and I think it’s probably a very positive thing for Queensland,” he told ABC radio.


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