REVEALED: Deloitte’s seven-point pitch to Virgin suitors

Melbourne, Australia - November 10, 2011: Virgin Australia Airlines Boeing 737-8FE VH-YVA on the runway at Melbourne International Airport.

By Travel Weekly

Deloitte has put together a list of reasons why prospective buyers should take over Virgin Australia, as the company in charge of the airline’s administration process looks to get a deal done by the end of June.

According to The Australian Financial Review, Deloitte has highlighted seven points about Virgin that it hopes will attract offers from governments and private investors alike.

Below are the seven reasons, which were obtained by the AFR’s Street Talk section:

Attractive two-player domestic market with proven profitability.
Strong ongoing demand for domestic air travel.
Strategically valuable access to routes and slots in the “Golden Triangle”, historically one of the most profitable operating jurisdictions globally for air travel.
Highly cash-generative and distinguished Velocity Frequent Flyer loyalty model, in excess of 10 million members and 90 partners.
Key strategic assets and infrastructure, including aircraft, route network, airport gates/slots, built over 20 years.
Unique opportunity to ‘relaunch’ Virgin Australia with a sustainable capital structure post-COVID-19.
Strong support from government, regulators and unions, who have all expressed a desire to keep Virgin flying following recapitalisation.

Deloitte has advised prospective buyers that they will be able to get their hands on an information memorandum at the end of the month, with an updated management plan for Virgin set to be released in early May, the AFR reported.

The administrators would then accept non-binding indicative offers until the middle of May, before the serious, binding offers would be accepted until mid-June.

According to media reports, there are more than 10 interested parties in Virgin Australia, including BGH Capital, Indigo Partners, Oaktree Capital, and entrepreneur Richard Branson, who owns 10 per cent of the airline via Virgin Group.

However, Branson already has his hands full trying to keep Virgin Group afloat, and has put his beloved Necker Island up as collateral to save jobs within the group, which includes Virgin Atlantic, Virgin Hotels and Virgin Holidays.

Both the Queensland and NSW governments are also expected to have a say in the future of Virgin.

The Queensland government unsuccessfully attempted to bait the federal government into providing support for Virgin over the weekend with a conditional $200 million lifeline, and blasted the NSW government over news that it would provide financial assistance if the airline relocated its headquarters to Sydney.

Victoria has also signalled interest in Virgin, with state Treasurer Tim Pallas reportedly confirming the government looked at injecting $500 million into the airline with the help of trucking magnate Lindsay Fox before it went into administration.

But, like the Queensland and NSW governments, Pallas told the AFR it wouldn’t mull over offering financial support for Virgin unless it also received assistance federal government and moved its headquarters to Melbourne.

Featured image credit: iStock/Ryan Fletcher

Advertise with us

Email the Travel Weekly team at traveldesk@travelweekly.com.au

administrators airline aviation deloitte virgin virgin australia voluntary administration