With Virgin Australia in voluntary administration and a restructure underway, several deals are in progress on the sidelines of the main game. One of the more interesting happenings is the various State Governments and airports trying to lure a restructured Virgin Australia away from its home base in Brisbane.
Bringing out the bazookas
Virgin Australia has always been based in Brisbane. It’s a nice roomy airport with excellent facilities and plenty of space for a growing airline. It probably didn’t hurt that the Queensland State Government gave then start-up Virgin Blue AUD$10 million back in 2000 to base itself in Brisbane. But Brisbane is Australia’s third city and third airport. Some argue that Virgin Australia has always been camping out, away from Sydney and Melbourne, by basing itself in there.
Last week, while Virgin Australia was sliding into voluntary administration, the New South Wales State Government made an incoherent offer to Virgin Australia that involved it shifting its base to Sydney. In response, Queensland State Development Minister Cameron Dick had this to say;
“Back right off. Just don’t go there.
If the world knows one thing, it knows this: there is nothing more dangerous than Queenslanders with their backs to the wall.
New South Wales might want to bring a pea-shooter to the fight, we will bring a bazooka, and we’re not afraid to use it.”
The New South Wales offer never made sense. Sydney’s existing airport is already overcrowded and doesn’t need another airline calling it home. Suggestions that Virgin Australia might like to head out to Western Sydney Airport at Badgerys Creek ignored the fact that the airport won’t be operational until 2026 at the earliest.
Further aggravation for Cameron Dick
But the good folks of Victoria have kindly stepped up to the challenge of aggravating Mr Dick further. Melbourne Airport has now thrown its hat into the ring should Virgin Australia be looking for a new home.
In what The Brisbane Times has called a “bold pitch,” Melbourne Airport’s CEO, Lyell Strambi, has suggested Virgin Australia might like to move south to his airport.
“Brisbane is not the center of business activity in Australia − that really belongs to Melbourne and Sydney.
“That’s the opportunity for Virgin; to move away from its over-reliance on the leisure and resource sector. If you want to be successful, you want to be in a place where you can access business traffic.”
A long-shot dark horse is lurking around Melbourne
If that kind of fighting talk isn’t enough to make Mr Dick bring out the bazookas, a long-shot dark horse is kicking around Melbourne.
Billionaire trucking magnate Lindsay Fox was deep in talks with the Victorian Government last week about moving some of Virgin Australia’s operations to Avalon Airport outside Melbourne. Mr Fox owns that airport, but Virgin Australia has never operated to Avalon. Ultimately, the Victorian Government decided not to proceed with making an offer to Virgin Australia. However, Mr Fox’s name continues to crop up in the voluntary administration analysis regarding Virgin Australia.
Melbourne Airport’s Lyell Strambi isn’t too bothered about any alternative offers from either Avalon or Sydney. Besides the problem of Western Sydney Airport not yet being opened, Mr Strambi suggests both it and Avalon are only suited for low yield leisure travel.
Ultimately, this is just an entertaining sideshow concerning bit players to the main game taking potshots at each other. Over half of Virgin Australia’s 10,000 strong workforce is based in Brisbane, as is much of its maintenance operations. Whatever airline emerges from the ashes of the Virgin Australia voluntary administration, it will be leaner and more efficient than the old Virgin Australia.
Staying based in Brisbane will probably be part of the lean and efficient look. As a plus, they will get to keep Cameron Dick onside.