Virgin becomes Australia’s first epidemic casualty, even as carriers struggle globally
The air travel industry has its first major victim. Virgin Australia has said that it has entered voluntary administration, making it Australia’s first big corporate casualty after the coronavirus outbreak. Voluntary administration as a legal concept is equivalent to filing for bankruptcy.
The country’s second-largest carrier had cut almost all flights last month following wide-spread travel bans. It was already struggling with a long-term A$5bn (£2.55bn; $3.17bn) debt. The airline is now seeking new buyers and investors, after failing to get a loan from Australia’s government.
Virgin Australia chief executive Paul Scurrah said: “Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the Covid-19 crisis.”
The carrier plans to continue to operate its current bare bones service while external administrators try to attract buyers so that the airline can survive the crisis.
Meanwhile, Sir Richard Branson – whose Virgin group is a part-owner of Virgin Australia – has offered a Caribbean island as collateral to help get a UK government bailout of Virgin Atlantic.