Virgin Australia Is Reportedly In Administration In The First Major Corporate COVID-19 Collapse

In what is ominously shaping up as the largest and most spectacular airline collapse in Australian aviation history, Virgin Australia is reportedly being placed into the hands of administrators, leaving some 10,000 jobs in limbo and a vast chunk of the Australian aviation industry in massive jeopardy.

According to The Guardian, Virgin Australia is set to be placed into the hands of administrators this afternoon, with Big 4 accounting firm Deloitte tapped to take the company over.

This comes after the Federal Government reportedly rebuffed Virgin’s repeated requests for a $1.4billion emergency bailout loan package, with the airline already buckling under the strain of $4.8billion in debt.

Additional reports from the Australian Financial Review suggest that the loan refusal has left Virgin’s board no alternative but to throw in the towel, leaving it up to administrators to restructure the company and facilitate a possible sale or, failing that, wind the company up completely and shift its assets. Virgin’s board is set to meet tonight to confirm the decision.

Virgin Australia had reportedly made some attempts to restructure their financial operations amid the growing debt crisis, but a large portion of those plans hinged on the Government providing a financial capital injection, not unlike that other global Governments have given national airlines in a bid to weather the tourism vacuum created by the COVID-19 pandemic.

Virgin Australia currently sports a fleet of 130 planes, many of which are said to be heavily mortgaged. Should operations completely cave in, it would be the first major corporate collapse of the COVID-19 pandemic.

It remains unclear what will happen to the company’s 10,000-odd employees, many of whom had already been stood down due to the effects of on-going coronavirus lockdown conditions, which saw Virgin Australia’s operations reduced to just one passenger route per day in early April. That number was to be expanded back out to 64 flights per day in a bid to facilitate passage around the country for essential pandemic personnel, however that is obviously – for lack of a better term – up in the air now.

More on this story as it develops.

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