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Brisbane, Australia - The Queensland government has offered $200m to cash-strapped Virgin Australia in case the airline accepts to move its headquarters to Brisbane.

Virgin Australia is considering going into administration as it raced against time to get out from under a $4.8bn debt. It also placed its shares in a trading halt.

The airline had earlier asked for a $1.4bn loan from the government as part of a proposed broader $5bn airline industry bailout. The federal government said on April 17 that it would spend $165m to underwrite Qantas and Virgin to conduct domestic flights for at least eight weeks.

Queensland’s state development minister, Cameron Dick said Australia needed two airlines to support tourism, jobs and regional investment.

“If we’re going to get through this pandemic with two national airlines … then all governments need to come together to ensure that is the case,”

he said.

“Queensland can’t do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we’re asking the Australian government to take the lead on this.”

Dick said Queensland’s support was conditional on debt restructuring, shareholders and bondholders doing their bit. The airline’s headquarters would also need to remain in Brisbane and regional flights would need to continue.

Asked about propping up an airline that could be bought by a foreign company, Dick said it was a risk but without two airlines, airfares and freight costs in Australia would rise.

“We want to keep the air fair,” he said. “We know on routes where there is only a single carrier, the cost of flights can be 20% to 25% more.”

The Coalition MP Andrew Laming said the federal government would not help the airline without guarantees.

“We can’t be distributing taxpayers’ money purely on the whim of what is an ambient claim for over $1bn unless it makes a difference,”

he told the ABC.

“The ultimate solution is to get the economy rolling again.”

Labor wants the Morrison government to help Virgin.

“We need two airlines. If we don’t have two, we’ll have fewer flights and flights will cost more.” 

said Jason Clare, opposition spokesman on regional services.
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