SYDNEY (Reuters) – Virgin Australia Holdings Ltd <VAH.AX> said on Thursday it would ground all domestic flights, except a single daily Sydney-Melbourne service through June 15, as it continues to seek government aid to weather the coronavirus crisis.
Rival Qantas Airways Ltd <QAN.AX>, which is in a stronger financial position, said on Thursday it had also made more cuts to its domestic network but for the time being it was still flying to every capital city and over 25 regional destinations.
Virgin has asked the government for a A$1.4 billion ($862.68 million) loan that could be converted to equity in certain circumstances.
Government ministers have indicated that any help is likely to be on an industry-wide basis rather than specific to Virgin.
“We continue to talk to airline executives on a regular basis as we navigate this unprecedented situation,” Deputy Prime Minister Michael McCormack said on Thursday.
“All levels of government, airports, airlines and the whole sector will need to work together to ensure Australia’s aviation industry emerges from this crisis in the best position possible.”
Virgin said its latest capacity cuts were due to government restrictions that had lowered travel demand.
Qantas said it expected to carry 95% fewer passengers over the Easter holiday weekend than last year. It is flying five flights per week from Sydney to Melbourne, down from almost 50 a day before the virus struck.
Virgin had already cut all international flights except government rescue charters, put most of its workforce on leave and permanently cut all pilots at low-cost arm Tigerair Australia and all crew based in New Zealand.
It will continue local and international cargo flights, the airline said.
Virgin’s shares are tightly controlled by a group of foreign airlines including Singapore Airlines Ltd <SIAL.SI>, Etihad Airways and Chinese conglomerate HNA Group that have also seen a sharp deterioration in revenues due to the coronavirus crisis.
The Australian government has already announced some aid to the broader airline industry, including refunding and waiving charges such as domestic air traffic control fees worth A$715 million and A$198 million in support for regional aviation.
The coronavirus has infected about 1.5 million people globally, while over 87,000 have died, disrupting lives and businesses as governments impose lockdowns to curb the outbreak.
For an interactive graphic tracking the global spread of the virus: open https://tmsnrt.rs/3aIRuz7 in an external browser.
(Reporting by Jamie Freed; Editing by Himani Sarkar)
