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Virgin Australia has entered into voluntary administration, the Australian equivalent of bankruptcy.
The airline plans to facilitate recapitalization so that it can emerge from the Covid-19 crisis in a stronger position. While in administration, the carrier will continue its current barebones schedule of domestic and international flights, which includes scheduled Los Angeles flights.
Virgin Australia’s board of directors has appointed accounting firm Deloitte as administrator of the insolvency process.
The airline, Australia’s second largest behind Qantas, made the decision to file for bankruptcy after failing to secure additional private investment or aid from the Australian government.
“Australia needs a second airline and we are determined to keep flying,” Virgin Australia Holdings Limited CEO Paul Scurrah said in a statement. “Virgin Australia will play a vital role in getting the Australian economy back on its feet after the Covid-19 pandemic by ensuring the country has access to competitive high-quality air travel.”
The airline employs 10,000 people.
Virgin Australia had some $3 billion in debt prior to the onset of the Covid-19 crisis, having posted seven consecutive annual losses, according to Sky News. It had lobbied Australia’s government for an AUS $1.4 billion ($880 million) loan.
Source: travelweekly.com
