The Queensland government says it will bid for Virgin Australia in an attempt to keep the stricken airline’s headquarters in Brisbane and support the state’s tourism sector, which has been savaged by the coronavirus crisis.
The treasurer, Cameron Dick, said the state was willing to buy equity in a resurrected Virgin Australia, but could also invest through other methods including a loan or guarantee.
The government has appointed the state-owned Queensland Investment Corporation to manage the bid, which has been dubbed “Project Maroon” – the state’s colour when it plays New South Wales in State of Origin rugby league games.
Dick said Queensland intended to bid as part of a consortium but did not name any potential partners.
Other reported bidders for the airline, which collapsed into administration last month, include consortiums led by the mining magnate Andrew “Twiggy” Forrest and private equity group BGH Capital, as well as specialist airline investor Indigo.
Dick said Australia needed two airlines and the government was determined to avoid a repeat of the situation after the collapse of Ansett, when Qantas enjoyed a near-monopoly.
“We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector,” he said.
“We saw the punishing increase to the cost of flights after the Ansett collapse, and this government will not stand by and let that happen again.”
He said QIC, led by chief executive Damien Frawley, had developed “a comprehensive strategy to ensure Queensland is best positioned for a successful bid”.
“QIC will advise government on all aspects of the bid, including the optimal partner group, the quantum and structure of the state’s contribution, as well as probity and governance,” he said.
Frawley said QIC would manage the state bid separately to its existing assets of more than $80bn.
“QIC has longstanding conflict management and governance processes in place which enable us to manage the state’s potential interest in VAH [Virgin Australia Holdings], and the bid, while separately managing other clients’ investment interests,” he said.
He said a timetable under which Virgin’s administrators want non-binding bids by Friday to make a sale by mid-June was “ambitious”.
“This is a competitive space, but Queensland is a serious contender and our discussions with the administrators have been making progress,” he said.
