Virgin Australia reportedly set to enter voluntary administration
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Virgin Australia is preparing to enter voluntary administration. According to sources close to the matter, the airline has been unable to cope with the financial strain caused by the ongoing coronavirus crisis, coupled with its history of financial woes.
According to sources reported by the Sydney Morning Herald, the airline’s board of directors met on Monday, and the announcement of it going into administration was “imminent.”
Previously, the airline had appointed accounting firm Deloitte to look at restructuring options. The firm is expected to run Virgin Australia‘s administration processes, including trying to find it new owners in order to keep it operating.
The Australian government previously refused to offer the airline any additional financial support, including the airline’s request for a $1.4 billion loan. Now, it plans to wait out the insolvency processes to see if there is any money it could loan to help to keep Virgin flying.
Virgin Australia and a board member declined to comment.
Virgin Australia is reported to be about $5 billion in debt. The coronavirus and its upending of the aviation industry has left Virgin Australia operations cut. Through June 14, Virgin Australia had announced that it would end all international flying and significantly reduce its domestic network.
Virgin Australia is the second-largest carrier in Australia, behind flag carrier Qantas. It employs around 10,000 people directly and another 6,000 indirectly, according to the Sydney Morning Herald.
The airline is 90% owned by Etihad Airways (20.94%), Singapore Airlines (20.09%), Richard Branson’s Virgin Group (10.42%) and Chinese conglomerates HNA (19.82%) and Nanshan (19.98%). The remainder of the airline is owned by investors.
Featured photo by Saeed Khan/Getty Images.
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