Virgin holds up domestic network subsidies
Virgin Australia delayed the announcement of a scheme aimed at underwriting critical domestic air services between the capital cities to ensure taxpayers covered all losses incurred operating the flights.
The airline will not profit on the routes. Instead, the package , first reported by the media on Tuesday, is aimed at ensuring Virgin and rival Qantas break even on the services after mothballing their domestic networks due to the COVID-19 pandemic and its toll on travel demand.
It is understood the airline finalised its discussions with the Morrison government on Tuesday night, with a formal announcement and full details of the assistance imminent.
The government is committed to having two full-service airlines on the other side of the coronavirus crisis but has said this does not have to include Virgin.
It again held the line against granting Virgin a line of credit or any other assistance specific to the business on Wednesday, with Treasurer Josh Frydenberg saying any more assistance would have to be sector-wide.
"I understand that two airlines have served us well but at the same time, our approach has been sector-wide support and that’s critical to understand,'' he said.