Virgin Australia’s creditors approved the airline’s purchase by US investment giant Bain Capital today – the final major hurdle in the takeover process that began shortly after Virgin entered voluntary administration in April this year.
Bain will formally take over the airline in the next few weeks, and it’s future is secure for now – though the same can’t be said for thousands of staff who have lost their jobs.
Bain has deep pockets to weather the ongoing downturn in travel and tourism, though it no doubt wants to see Australians return to the skies sooner rather than later.
Bain’s plan is to retain the existing management team but transform Virgin into a mid-tier airline, sitting somewhere between the low-cost Jetstar and full-service Qantas. A lot of the details remain unclear, but we do know that Virgin will operate an all-737 fleet on domestic and short-haul international routes until long-haul travel is viable again. At that time, Virgin will likely buy new widebody aircraft.
Virgin has said it will focus on operating a smaller domestic and short-haul international network, jettisoning unprofitable routes.
In terms of the travel experience, Virgin will likely retain many of its lounges, though we don’t know which ones yet. Onboard, customers can also expect some changes (eg. paying for food, entertainment and seat selection), though again, we are waiting to see the details.
Customers’ existing Velocity Points and travel credits are safe.
Today is good news for loyal Virgin customers and the majority of staff who will remain employed. Our fingers are crossed for a brighter future for the airline.
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