The Queensland Government wants to buy Virgin Australia

It's called 'Project Maroon', and it could see the Queensland Government become a major stake-holder in Virgin Mk II.

By David Flynn, May 13 2020
The Queensland Government wants to buy Virgin Australia

Queensland will put in a bid to take over Virgin Australia this week, in an attempt to not only bring the failed airline back into the skies and into profitability, but to keep it based in Brisbane.

State treasurer Cameron Dick confirmed the bid this evening, saying it would be run through the government-owned Queensland Investment Corporation and be presented as part of a consortium.

That group could involve one of the other "interested parties" running their eyes over the airline or introduce new players such as state-based superannuation funds and other commercial investment partners of QIC.

Dick said the government's investment in the collapsed airline could take the form of "a direct equity stake, a loan, guarantee or other financial incentives."

"This is a competitive space, but Queensland is a serious contender and our discussions with the administrators have been making progress," he added.

QIC chief Damien Frawley said the group was "well-equipped to manage the state’s interest in Virgin Australia Holdings should the consortium be successful."

"QIC's track record as an acquirer, owner and manager of nationally critical infrastructure for both the Queensland Government and long-term investors supports our consortium bid."

'Project Maroon'

While a first wave of "indicative non-binding bids" must be handed into administrator Deloitte by the close of business this Friday May 15, Queensland and co. will then have four weeks to knock off the rough edges of what it has dubbed 'Project Maroon' – after the state's rugby league colour – and present its final "serious, binding" bid by mid-June.

"We remain confident that our target of achieving a sale by the end of June is achievable," Deloitte administrator Strawbridge has said.

Keeping Virgin tethered to the state is central to the pitch, with the state having already promised $200 million to that end.

Brisbane has been the airline's operational base and spiritual home since it launched as Virgin Blue in 2000, and almost half of Virgin's 10,000-strong workforce in located in Queensland.

Management and the Velocity Frequent Flyer program lease commercial offices in Sydney – it's not known if a successful Queensland bid would see both of those arms relocate north of the border.

“We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector," Dick said.

Also in the running...

Strawbridge has previously indicated that a score of potential bidders were scoping out Virgin Australia, which he expected to be "a very competitive process" involving "high-quality bidders with fantastic credentials and the ability to restructure this business."

Some of the suitors are said to include:

  • Melbourne-based private equity firm BGH Capital, which is reportedly building a locally-financed 'Team Australia' bid as a counterpoint to Virgin being previous dominated by foreign ownership
  • Australian-based multinational investment firm Macquarie Group
  • Perth-based Wesfarmers, which is said to have its eye on how the Velocity rewards program could be used to bolster FlyBuys 
  • WA mining magnate Andrew 'Twiggy' Forrest
  • Singapore sovereign wealth fund Temasek
  • Bain Capital, assisted by former Bain exec and Jetstar CEO Jayne Hrdlicka
  • US-based private equity firm, airline investor and low-cost champion Indigo Partners, which owns US budget carrier Frontier Airlines and holds stakes in an array of other LCCs,  including Europe's Wizz Air, which Indigo co-founded

Virgin's suitors will have been running the numbers across a range of scenarios, ranging from a return to the airline's low-cost Virgin Blue roots, a hybrid mid-market position between Qantas and Jetstar, and a smaller but still full-service 'boutique' model.


David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 325

AFR hasn't listed Temasek anywhere at all in their recent articles covering the VAH administration, so I think they can be again dismissed as "Fake News", similar to the long-running debacle with their subsidiary SIA and the long-running 'SQ to taek ovah VA !!!1111!!!" fake news jokes over the years.

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 321

Hopeless government with mountains of debt wanting to buy a hopeless airline with mountains of debt, what could possibly go wrong.

Qantas - Qantas Frequent Flyer

02 Apr 2017

Total posts 134

This would be Queensland investment corporation which, while owned by the government, is a for-profit company (and indeed is profitable). Buying at the bottom of the market with a lot of the debt written off is a fairly safe investment as market value is likely to go up as soon as soon as air traffic resumes.

Qantas - Qantas Frequent Flyer

18 Feb 2015

Total posts 124

Qantas should by them, and use it as their low cost arm


11 Jul 2014

Total posts 974

Surely they can do Team East Coast Qld, NSW and Vic

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 250

Hey @tmsmile - I grabbed my popcorn and waiting to see how how dire this situation - but still waiting...

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 466

i wish them all the best no matter what path they rightfully should be an australian who buys them out.all this mish mash of ownership is would think in the case of etihad when they bought alitalia they would have learned their lessons for instance.

Virgin Australia - Velocity Rewards

20 Jul 2012

Total posts 15

They can't run the state so how on earth are they going to be able to run an airline.

Qantas - Qantas Frequent Flyer

09 Feb 2015

Total posts 382

I agree with many that the State Labor government are as useless as they come (and I for one cannot wait until the October election), but QIC is a for profit corporation that generally keep independent of the government of the day.

QIC have about $100B worth of investments both in Australia and overseas, many of which have been extremely successful including Brisbane Airport, Port of Melbourne and many other investments in major infrastructure.

So effectively QIC taking a stake in Virgin Australia is no different to Tamasek Holdings taking a stake in SIA.

Qantas - Qantas Frequent Flyer

25 May 2017

Total posts 79

The QLD Government or any for that matter should not be in the business of running an airline. In this instance VA has made a big enough mess of it by not listening to what the market was seeking. That is a true competitor to QF and not lipstick on a pig like VA was. All Government's need to spend money elsewhere. VA had the opportunity to match QF or better it. They failed. Lets hope that valuable lessons are learnt if VA is resurrected. Lets hope it will not just be a lipstick on a pig airline again!

23 Oct 2014

Total posts 233

What a load of garbage, Qantas was founded, unloaded of debt at float and continues to get almost all government travel accounts, subsidised domestic and international flights including freight charters (indirectly a form of government support), Rex just got handed millions from the regional “support package” from the Federal government. Well done Qld goverment trying to balance an “out of balance” support package. Qld government don't listen to all the nay sayers wanting and hoping Virgin fails, ask yourself what's in for them, why would anyone want Virgin to fail, what's in it for the traveling public ? I cannot see any benefits from that, for 20 years Virgins presence has forced change and benefits, as Virgin blue it forced Qantas to launch Jetstar a successful airline and massive benefit to all Australia, as Virgin Australia it forced Qantas to improve its terrible J product as a monopoly from plastic 330 seats to suites, upgrade lounges - Joyce even admitted this. And for its customers like me, enjoy Virgins it's 330 and 777 suites, modern relaxed lounges and frequent flyer program perks. I say, get in there Qld government Virgin deserves support based on the support other airlines have already got or had, its great for Queensland, Australia, Virgin and all Aussies that travel.

06 Feb 2014

Total posts 28

Why do people fail to understand the distinct difference between QIC and the Queensland Government.

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 325

Probably for the same reasons why some consider Temasek and SIA/SQ the same (even though both are entirely separate companies).

30 Apr 2020

Total posts 14

I just cannot see Virgin returning to business as normal. They wanted 1.4B just to survive and now the QLD wants to throw in 200M. It's going to take a multi billion dollar injection with a partner with deep pockets. People expecting the old Virgin will be very disappointed with the new version but sadly that what happens when they take on too much debt. There are too many creditors that want their money back or a piece of the new company.

It's going to be really interesting so see how the different consortiums propose to resurrect Virgin.

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 466

anything for fairness in the the 80s and 90s for interstate school trips most went by bus or train.the better schools usually private ones flew.prices are very sensible compared to back then.i recall my aunt paying $150 for my ticket adelaide to melbourne return june 89 ansett on short notice when the school told my parents i would not be accompanying them on the train for safety reasons(it's a complicated story)since then prices if bought with enough notice and do take into account kids fares 3-15 don't even exist anymore have only gone up an extra $60 to $75 in about three decades thanks to virgin.

Hi Guest, join in the discussion on The Queensland Government wants to buy Virgin Australia