The ‘catalyst’ for Virgin’s collapse certainly was government shutdown policy
Just as the federal government “ditched ideology in its ‘whatever it takes’ response to the coronavirus … it can’t suddenly plead free market virtue” as Virgin Australia faces collapse according to Sky News host Peta Credlin.
The potential loss of 15,000 jobs and the eradication of a competitive aviation industry pending the collapse of Virgin is a situation manifested by the “decisions that same government took to put everything into hibernation,” Ms Credlin said.
Virgin Australia’s board placed the airline into administration after the government rejected a final hour plea for a grant to keep the airline afloat for an extra couple of weeks.
The government have remained firm on its stance to not bail out the company, hoping a private entity will rescue the airline instead.
Ms Credlin said she understands why the government would prefer not to “micro-manage this process from here and end up ‘owning’ the problem,” but it does need to make “its public policy objective clear”.
Without government support, Virgin could face a complete erosion and allow a “new competitor” to enter Australia’s airline market, but this idea is “ludicrous” according to Ms Credlin.
The federal government should not necessarily “be bailing out Virgin’s shareholders,” as they are more than large enough to “look after themselves,” but it does have a “duty to the Virgin workers”.
“If you break it, you own it, and the catalyst, certainly, for Virgin’s woes was not any mistake it made, but the government’s decision to make travel almost impossible for the duration of the corona crisis”.
Image: News Corp Australia