Virgin Australia has entered voluntary administration today, 21 April 2020, as a result of the COVID-19 pandemic.
In a statement, the airline said it has appointed Deloitte as the voluntary administrator, with a goal to recapitalise the business and help it emerge in a stronger financial position on the other side of the COVID-19 crisis.
Virgin Australia will continue to operate its scheduled international and domestic flights which are helping to transport essential workers, maintain important freight corridors and bring Australians home.
CEO Paul Scurrah said the decision today is about “securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis”.
“In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry,” he said.
“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 10 million members of our Velocity loyalty program, and contribute around $11 billion to the Australian economy every year.”
Velocity Frequent Flyer, while owned by the group, is a separate company and is not in administration.
The decision to enter voluntary administration comes as Virgin has continued to seek financial assistance from a number of parties, including State and Federal Governments, however is yet to secure the required support.
The Queensland Government offered a $200 million lifeline earlier this week, in a bid to keep the company’s headquarters in Brisbane.
“Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible,” said administrator Vaughan Strawbridge.
“We are committed to working with Paul and the Virgin Australia team and are progressing well on some immediate steps.
“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.”