Two more airlines are undergoing major restructuring in the face of pandemic-induced economic woes, with a new owner for Virgin Australia and a big step toward not-quite-nationalization for TAP Portugal.
The Portuguese government is putting up a €1.2 billion loan and other aid to keep TAP flying; in return for its loan, it will increase its share of TAP’s ownership from 50% to 72.5%. Airline employee groups will keep their 5% and Portuguese investor Humberto Pedrosa will keep his 22.5%. His partner, David Neeleman, who has been a key player in reviving the airline’s pre-Covid fortunes, will give up his 22.5%. Terms of that transaction were not announced.
Virgin Australia, which had already shut down in bankruptcy proceedings, has a new owner, U.S.-based Bain Capital, formerly headed by Mitt Romney. The company says it will maintain VA’s loyalty program, but many other changes are likely, including a likely return to an emphasis on a domestic network.
VA began as a bargain domestic airline in 2001 after the collapse of Qantas’ only real rival, Ansett. Until 2010, that was its business model; after 2010 it started adding premium classes and making international connections with a number of airlines, including Delta, United, Air New Zealand and Singapore.
But it never made money under that plan, and because of conflicting alliance memberships by its partners, it was never able to benefit from joining one of the alliances. Perhaps the new owners will find success with an old formula.
