The Queensland government has announced a surprise bid to purchase a stake in collapsed airline Virgin Australia.
Queensland Treasurer Cameron Dick announced “Project Maroon” on Wednesday night, with the appointment of state-owned funds management group Queensland Investment Corporation to oversee the bid.
Mr Dick said the government’s investment could take the form of a direct equity stake, a loan, guarantee or other financial incentives.
“My number one focus as Treasurer is to retain and create jobs for Queenslanders, particularly as we move beyond the COVID-19 crisis,” Mr Dick said in a statement.
“We have been very clear. Two sustainable, national airlines are critical to Australia’s economy. 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.”
Mr Dick said there was a”punishing increase” in flight costs after the collapse of Ansett and the state government would “not stand by and let that happen again”.
“The appointment of QIC, led by CEO Damien Frawley, has enabled work to progress quickly on a comprehensive strategy, to ensure Queensland is best positioned for a successful bid,” he said.
“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.”
Virgin was placed into administration last month with debts of $7 billion after the coronavirus restrictions all but wiped out domestic and international travel.
Prior to the administration, the Queensland government had already indicated it was willing to chip in $200 million towards a support package for Virgin – one of the state’s largest employers – if the federal government would offer a bailout.
Mr Dick was pushing the deal in his previous role as Development Minister and has wasted no time – he was promoted to Treasurer this week following the shock resignation of Deputy Premier and Treasurer Jackie Trad over corruption allegations.
Administrators Deloitte said Tuesday there were 19 potential buyers going over the books as of May 11. Non-binding indicative offers are due on May 15 and Deloitte hopes to finalise a deal by the end of June.
Federal Home Affairs Minister Peter Dutton, who holds the Brisbane seat of Dixon, has reacted with fury at the news. “Premier Palaszczuk has almost bankrupted Queensland, and now in the middle of a crisis they want to buy an airline,” Mr Dutton tweeted.
“It is laughable. She ‘leads’ a government which is corrupt and chaotic.”
State opposition leader Deb Frecklington is yet to comment on the announcement.