Virgin Australia lost AUD3.1 billion last year and remains saddled with AUD1.2 billion of debt it carried into administration, according to filings with the corporate regulator.
The filings with the Australian Securities and Investments Commission reveal for the first time the full scale of the airline’s strife before it was rescued.
The now private company fell into administration during the period, with the COVID-19 pandemic forcing the suspension of international and most of its domestic operations.
The report reveals how the stricken carrier’s losses ballooned in the pandemic from AUD315 million in the 2019 financial year to AUD3.1 billion last year. Larger rival Qantas lost AUD2 billion last year.
Revenue fell 20% to AUD4 billion as the pandemic forced airlines around the world to ground fleets and mothball networks as travel demand crashed.
Virgin had just AUD740 million of cash left at the end of the financial year.
The report shows the precarious position the airline found itself in during the pandemic and its administration.
Virgin called in administrators from Deloitte in April 2020 and, following a bidding war, was sold to US private equity firm Bain Capital after the Federal Court approved a deed of company arrangement in November.
Government assistance received by VA over the first three months of the pandemic amounted to about AUD165 million including AUD80.5 million in Job Keeper payments as well as other income from programs helping repatriate Australians, reduce airport costs and support freight.
Key management personnel were paid a total of AUD14.9 million during the year, while fees paid to the airline’s Deloitte administrators amounted to AUD13.4 million during the year.
The documents estimate the airline was sitting on over AUD1 billion in “unearned revenue” including AUD620 million in flight bookings and credit vouchers, plus a further AUD436 million from the Velocity loyalty program.
Other revelations include a AUD125 million unsecured loan provided by the Queensland Investments Corporation, a further investment of AUD159.6 million by a subsidiary of the airline’s new owner Bain Capital, as well as confirmation that an agreement to utilise the Tiger Airways brand expired on 31 Mar this year.
As part of the Group’s restructuring plans about 3,000 people have left Virgin Australia, resulting in redundancy costs between AUD83m and AUD130m.
The company noted the accounts represented VA’s position in mid-2020, with the carrier now having a “much stronger balance sheet”.
Since taking over the airline, Bain Capital has revamped the leadership team under chief executive Jayne Hrdlicka, refocused the product to the middle of the market, and remade its board of directors.