Virgin Australia goes bust, becomes largest airline coronavirus casualty

Virgin Australia has become the largest airline to fail amid the novel coronavirus pandemic that is driving the worst crisis ever faced by global airlines.

The Brisbane-based carrier entered "voluntary administration" -- the Australian equivalent of bankruptcy restructuring -- on April 21, Virgin Australia said in a statement. The process will allow the airline to restructure and seek outside investment after its current shareholders and the Australian government declined to provide aid.

Virgin Australia will continue to operate its already greatly reduced schedule in Australia and internationally. The airline is operating 64 domestic flights daily, including to Brisbane (BNE), Melbourne (MEL) and Sydney (SYD), as well as limited international service to Hong Kong (HKG) and Los Angeles (LAX).

The airline's Velocity frequent flyer program is not part of the administration process.

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"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 Vaughan Strawbridge, one of Virgin Australia's administrators and a partner at Deloitte, in a statement. "We have commenced a process of seeking interest from parties for participation in the recapitalization of the business and its future."

Virgin Australia is the largest airline to-date to shut down or file for bankruptcy or an equivalent amid the coronavirus pandemic. UK regional carrier Flybe was the first to collapse in early March, followed by regionals Compass Airlines, RavnAir and Trans States Airlines in the U.S.

South African Airways is also near collapse after the South African government denied its request for aid, Bloomberg reported.

The International Air Transport Association (IATA) has warned that as many as half of the world's airlines could collapse or be acquired without government aid to get them through the COVID-19 crisis.

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Related: More than half of global airlines could 'die' without aid

Virgin Australia has teetered on the edge for weeks. Already financially weak after a costly multi-year investment spree, the airline sought an Australian dollar 1.4 billion ($888 million) loan from the federal government at the end of March. That loan was denied as were requests for additional funds from its major shareholders Etihad Airways, Chinese groups HNA and Nanshan, and Singapore Airlines, the Sydney Morning Herald has reported.

The airline is the second largest in Australia after Qantas Airways. Virgin Australia flew nearly 31% of the available seat miles -- 37% when including its budget subsidiary Tigerair Australia -- in the country in 2019, according to Cirium schedule data. Qantas flew nearly 39% of capacity in Australia during the year.

Virgin Australia had 10,620 employees at the end of June 2019.

Related: Virgin Australia set to enter voluntary administration