NSW is considering rival rescue package if the airline moves to Sydney, but both states need federal support to keep the company aloft

This article is more than 4 months old

This article is more than 4 months old

Queensland has reacted angrily to news that the New South Wales treasurer, Dominic Perrotet, is considering offering a rival rescue package to Virgin Australia, provided it moves its headquarters to the new airport being built at Badgerys Creek in western Sydney.

The Queensland premier, Annastacia Palaszczuk, said she would continue to fight to keep Virgin in Queensland because of its importance to the state’s tourism industry.

Queensland’s state development minister, Cameron Dick, told NSW to “back right off”.

“There’s nothing more dangerous than Queenslanders with their backs to the wall … we will stop at nothing to ensure the headquarters of Virgin remains in Queensland,” Dick said.

Queensland has offered the company $200m if it remains in Brisbane. Virgin’s Bowen Hills headquarters has 1,200 workers and there are 5,000 Virgin employees in Queensland.

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Perrottet told Sky News on Sunday night the NSW government was considering offering support and pointing to the “aerotropolis” being built at Badgerys Creek.

“Virgin should have their headquarters for both Virgin and Tiger in Sydney,” Perrottet said.

The NSW premier, Gladys Berejiklian, confirmed her state’s interest on Monday morning.

“If there are other opportunities [where] the NSW government can support businesses re-tooling or looking at other opportunities to set up their head office here in NSW, we are open to all of those things.”

Berejiklian said she would not provide any further detail on the possible move, including if NSW support would be contingent on the federal government also backing the bailout.

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“I don’t want to provide any more details than that,” she said. “But just to say that as a government our focus remains very strongly on protecting jobs.”

Neither state is likely to be able to offer enough support unless help is forthcoming from the federal government, which has so far balked at bailing out one company.

So far federal assistance to both Virgin Australia and Qantas has been limited to underwriting a very limited resumption of services.

The Queensland offer is conditional on a $1.4bn injection from federal coffers that will not be forthcoming.

The federal opposition has called on the Morrison government to bail out Virgin, saying that failure to do so could be even more expensive, as many of the employees would end up on jobseeker payments.

Labor’s spokesperson on transport, Catherine King, said Australia needed a strong two-airline policy.

“ I cannot understand why Scott Morrison is so intransigent – 16,000 people depend on Virgin,” she said.

Private equity outfits, namely BGH Capital, are rumoured to be circling Virgin, while Chinese players China Southern Airlines, East Airlines and Air China are reportedly considering a tilt.

However, any prospective buyer is likely to keep its powder dry until the nation’s second-largest airline enters voluntary administration to get the best deal possible.