Supercars primary sponsor Virgin Australia has announced it has gone into voluntary administration after the federal government ruled out saving the airline.
Virgin Australia signed a five-year deal as a primary sponsor of the Supercars Championship in 2016. It is understood the deal with the airline is worth $NZ1.6million per annum in contra at discounted ticket rates. On top of that, each Supercars team gets $NZ37,000 in contra per car.
Virgin Australia Group has appointed Vaughan Strawbridge, John Greig, Sai Algeri, and Richard Hughes as voluntary administrators, and will be supported by Virgin Australia Group Chief Executive Officer Paul Scurrah and the Group’s management. The Group currently has just under $NZ5billion debt and shares were put in a trading halt last week.
After seeking financial assistance, The Federal Government said it would pledge $NZ173million to Virgin Australia and Qantas to maintain domestic flights for eight weeks. Last week, the Queensland Government offered $NZ210million to keep the airlines headquarters in Brisbane.
CEO Scurrah said the decision was made in an effort to secure the future of the airline and to help weather the effects of the COVID-19 pandemic.
“Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis.
“In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry.
“We employ more than 10,000 people and a further 6,000 indirectly, fly to 41 destinations including major cities and regional communities, have more than 10 million members of our Velocity loyalty program, and contribute around $11 billion to the Australian economy every year.
“Australia needs a second airline and we are determined to keep flying. Virgin Australia will play a vital role in getting the Australian economy back on its feet after the COVID-19 pandemic by ensuring the country has access to competitive and high-quality air travel.”