Virgin going into administration a ‘real failure’ for regional communities, farmers say


Posted

April 21, 2020 16:58:21

People in regional centres and isolated towns around Australia are worried they will be hard hit by the potential collapse of Virgin Australia and face higher ticket prices and fewer flight options.

For cattle farmer Sarah Cook, who runs Aileron Station in outback NT, 130 kilometres north of Alice Springs, the prospect of losing Virgin as a second major carrier was a “huge concern”.

“This is going to really affect Territory families in the bush, we don’t have the option to access the airport at all hours of the day,” she said.

Ms Cook, the Territory’s president of the Isolated Children’s’ Parents’ Association, uses the airline to fly her son Hayes to a boarding school in outback Queensland from Alice Springs.

“It’s important to us that there’s competition, the price of airfares here in the bush is expensive. We often have to spend $600 to get Hayes one way to school,” she said.

The cattle producer’s main concern is that her son has good access to education.

“I think it’s a real failure of the system, having a couple of major carriers is very important to us,” she said.

Virgin is just the latest casualty of the economic chaos wrought by coronavirus globally.

The company said the decision to “recapitalise the business” would make sure it emerged in a “stronger financial position on the other side of the COVID-19 crisis”.

The airline has appointed Deloitte as voluntary administrators, though the company has said travel credits from cancelled flights would remain valid.

Mayors in Karratha, Kalgoorlie and Albury said flights to towns in regional Australia were already expensive and a further reduction in competition could push prices higher.

Qantas, and its subsidiary Jetstar, could soon have a domestic airline monopoly, which also has some experts concerned about the ramifications for consumers.

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Regional mayors call for government bailout

Those concerns are shared by mayors in Launceston in Tasmania, Karratha in Western Australia and Albury in New South Wales.

Launceston’s Mayor Peter Van Zetten said his greatest concern was the higher cost of flights discouraging tourists after coronavirus restrictions were lifted.

“As a city, we rely heavily on tourism, and having competition from another large carrier is critical for us,” he said.

“To be frank, a spike in the cost of airfares and how that would not only impact tourism but also people who fly to Sydney or Melbourne for business or family is a massive concern,” he said.

The Mayor of Albury, Kevin Mack, said his city would find it “hard to survive” without accessible air transport, and called on the Federal Government to bail out Virgin.

“We cannot live without two major domestic airlines,” he said.

“I fear that if we lose Virgin, affordable air travel could be a thing of the past in our community.”

Mr Mack said his town was already losing around $300,000 because of the dramatic drop in flights.

“We have 250,000 people come through our airport each year. But it is more than that, it’s about seeing friends, family, tourism, and having regular, cheap flights to our region.”

Peter Long, Mayor of Karratha, drew on personal experience to illustrate his concerns.

“I remember coming to Karratha 35 years ago, we had just one carrier then and flights were well over $1,000, which was a fortune at the time. We can’t afford that to happen again,” he said.

“There are many communities where these airlines are literally a lifeblood.”

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