Virgin Australia goes into administration

Australia's second-largest airline Virgin Australia has gone into voluntary administration in a bid to, as administrators put it, "ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis".

The airline had existing financial problems, as it had posted losses for seven consecutive years, and had approached the Australian government for a loan of A$1.4 billion ($879.4 million), which was rejected. The decision to go into administration puts 16,000 jobs at risk.

Virgin Australia is owned by a variety of groups, including significant stakes from China's Nashan Group and HNA, and also the Virgin Group, set up by British entrepreneur Richard Branson, who has asked the British government for financial assistance for his Virgin Atlantic airline, offering his Caribbean island home as security for the loan.

"I know how devastating the news today will be to you all," Branson wrote to Virgin Australia staff.

"In most countries federal governments have stepped in, in this unprecedented crisis for aviation, to help their airlines. Sadly, that has not happened in Australia."

If Virgin Australia were to collapse, it would leave rival Qantas with a monopoly on the Australian domestic market, but one administrator, Vaughan Strawbridge, said there have been several expressions of interest already in refinancing the company, and the aim is to "bring it out of administration as soon as possible".

The Australian Treasury has said that it would work with administrators "to ensure Australia maintains two commercially viable airlines".

Heavy blow to tourism

A joint statement issued by Deputy Prime Minister Michael McCormack and Treasurer Josh Frydenberg said: "Our objective is to help keep as many employees as possible in their jobs, a second major domestic airline in the sky, prices down and competition maintained."

Previously, Virgin provided around 31 percent of Australia's domestic flights, with Qantas having almost 58 percent. In addition, Virgin Australia flew to New Zealand, Bali, Fiji, Tokyo and Los Angeles.

If Virgin were not to be saved, the loss of such a significant player in the internal travel market would also be a heavy blow to Australia's vital tourism industry, which is already reeling from the devastating bushfires that swept across the country at the start of the year.