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Virgin Australia Holdings has entered voluntary administration seeking bankruptcy protection amid the coronavirus (Covid-19) pandemic.
The decision is expected to help recapitalise the business. The company, which is yet to secure required assistance, is continuing to seek financial support from state and federal governments and other parties.
Deloitte’s Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes have been appointed as voluntary administrators of the company.
Administrator Vaughan Strawbridge said: “Our intention is to undertake a process to restructure and refinance the business and bring it out of administration as soon as possible.
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By GlobalData“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far.”
The company has been struggling to repay A$5bn in debt.
Meanwhile, the airline will run its scheduled international and domestic flights in support of essential workers, to bring back Australians and maintain key freight corridors.
In addition, Velocity Frequent Flyer owned by Virgin Group is not in administration and is a separate company.
Virgin Australia Group chief executive officer Paul Scurrah said: “In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry.
“We employ more than 10,000 people and a further 6,000 indirectly, fly to 41 destinations including major cities and regional communities, have more than ten million members of our Velocity loyalty programme, and contribute around $11bn to the Australian economy every year.
“Australia needs a second airline and we are determined to keep flying. Virgin Australia will play a vital role in getting the Australian economy back on its feet after the Covid-19 pandemic by ensuring the country has access to competitive and high-quality air travel.”
Last month, British airline Flybe entered administration just two months after the UK Government announced a rescue package.
Confirmed cases on coronavirus have reached 2,478,153 globally while death tolls stood at 170,368.
