Virgin Australia collapses, becoming Asia’s first airline to be claimed by coronavirus
- Virgin Australia had already furloughed 80 per cent of its 10,000-strong workforce but will continue to operate some flights for essential workers, freight and the repatriation of Australians
- The airline had more than A$5 billion (US$3.2 billion) in debt as of the end of 2019
Deloitte will take control of the company, the Brisbane-based airline said in a statement Tuesday. The administrators will be tasked with finding new investors to inject capital, reorganising borrowings or getting a buyer in an attempt to save the business.
“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,” said Vaughan Strawbridge, who is one of the four administrators at Deloitte.
Virgin Australia joins FlyBe – the UK’s biggest domestic airline before it collapsed last month – among the industry’s first corporate casualties of the virus. Airlines have been pommeled by domestic and international travel bans that forced them to seek government aid.
Virgin Australia, which had already furloughed 80 per cent of its 10,000-strong workforce, will continue to operate some flights for essential workers, freight and the repatriation of Australians, it said.
The fate of Virgin Australia, which had more than A$5 billion (US$3.2 billion) in debt as of the end of 2019, hung in the balance after it stopped virtually all services because of the virus and its request for state help failed. The company had asked the government for a A$1.4 billion loan, convertible into equity, to see it through the crisis.
The airline’s Velocity Frequent Flyer programme is a separate company and is not in administration, according to the statement Tuesday.