Budget carrier IndiGo airline's largest shareholder company -- InterGlobe Enterprises -- has signed an agreement to participate in the sale of Virgin Australia.
Budget carrier IndiGo airline’s largest shareholder company — InterGlobe Enterprises — has signed an agreement to participate in the sale of Virgin Australia, the company announced. The confirmation from InterGlobe Enterprises comes merely three weeks after the second-largest Australian carrier announced its collapse amid the coronavirus pandemic. “As regards Virgin Australia, InterGlobe Enterprises has signed an agreement to participate in the sale process and is bound by the confidentiality requirements of that agreement. We are unable to say anything further at this stage,” InterGlobe said in a statement on Friday. However, the Indian conglomerate had earlier denied a report which said that it had expressed an interest in Virgin Australia.
Billionaire Rahul Bhatia-owned InterGlobe has 37.87% stake in India’s largest airline by passengers carried IndiGo. On the other hand, Rakesh Gangwal, his family members and his family trust own 36.64% in the domestic carrier.
Virgin Australia is among one of the largest Australian airlines and was started in 2000. The airline, which was co-founded by British businessman Richard Branson, has been facing a financial crunch for several quarters. Virgin Australia folded last month and went into voluntary administration as the coronavirus outbreak hit tourism and travel across the globe. Virgin Australia’s collapse on April 21 has put 16,000 jobs under threat.
Aviation is among the worst hit sectors across the world due to coronavirus pandemic. In fact, an industry report had earlier said that most airlines will stare at bankruptcy by May-end if the lockdown situation in the world continues. Virgin Australia is not the first airline which has succumbed to the pressures of low revenues. Earlier, one of the major airlines in the United Kingdom Flybe had also collapsed due to slowing revenues. In India too, many airlines have responded to the COVID-19 situation by cutting down on employee salaries and asking employees to take compulsory leave without pay for a few days every month.