Virgin Australia is set to collapse into voluntary administration tonight after crisis talks failed to save the embattled airline – leaving 16,000 employees in limbo
- Virgin’s board is expected to put the airline into voluntary administration
- The airline would not confirm or deny if the decision had been made on Monday
- 16,000 jobs at risk however the airline could continue trading in administration
- Learn more about how to help people impacted by COVID
Virgin Australia is expected to go into voluntary administration after state government crisis talks failed to raise enough money to keep the airline flying.
Board members are expected to put the airline into administration after a crisis meeting this afternoon, the Daily Telegraph reported.
Daily Mail Australia contacted the airline this evening but Virgin Australia was not able to confirm or deny whether a decision had been made.
‘No, we haven’t made an announcement on administration,’ a spokesperson said.
Virgin Australia has reportedly been put into administration however the airline would not confirm or deny the report on Monday evening
Virgin Australia had been feared to be on the brink of collapse. Pictured is co-founder Sri Richard Branson launching Virgin Atlantic flights from Sydney to London in 2004
With air travel down over 95 per cent because of the lockdown the airline has been seeking government assistance to help its financial situation.
Virgin employs about 10,000 people directly and supports another 6000 jobs indirectly.
Virgin had been in bail-out talks with the NSW and Queensland governments and had reportedly asked for a $1.4 billion loan from the Federal Government.
Queensland offered $200 million, which reportedly fell short of the airline’s requests.
Citing unnamed sources, the Sydney Morning Herald reported on Monday the cash-strapped carrier has been unable to weather the coronavirus crisis due to its debt load.
The newspaper said the airline’s board of directors was meeting on Monday, with a source saying the announcement of it going into administration was ‘imminent’.
Voluntary administration does not mean the company ceases trading or that employees immediately lose their jobs.
When an insolvent company goes into voluntary administration, it is placed in the hands of an independent administrator who determines the best path forward for both the business owners and its creditors.
It can be broken up or kept intact and sold.
The Morrison Government has so far refused to bail out the airline.
Virgin Australia has reportedly been put into voluntary administration. It is believed the most likely administrators are likely to be Deloitte
It has been reported that the Federal Government’s preferred option is for the airline to go into administration to clear the way for the company’s rescue.
Private equity firms are said to have been circling, and the government could require an ownership stake in return for bailout money.
If an administrator is appointed this week, it is likely to be Deloitte, ABC News reported.
Virgin halted 90 per cent of its flights and stood down 80 per cent of its workforce on March 25, maintaining just 17 destinations to transport essential services, critical freight and logistics.
More to come