Australian airline Virgin Australia will continue to operate its scheduled domestic and international flights despite going into administration, as it seeks further funding following a collapse in air travel because of restrictions to combat the Covid-19 pandemic.
The decline in air travel has led to Australia's jet fuel sales slumping to 147,500 b/d in February, the lowest level since June 2016. Virgin Australia is the second-largest consumer of jet fuel in Australia.
Virgin's board of directors have appointed Deloitte as the administrator, which will pursue to restructure the airline and refinance the business and bring it out of administration as soon as possible, Virgin said.
"Our decision today is about securing the future of the Virgin Australia group and emerging on the other side of the Covid-19 crisis," chief executive officer Paul Scurrah said.
Virgin Australia last week said it planned to operate 64 return domestic flight services a week, after previously operating only domestic flights for essential services following the Australian government's pledge to underwrite the cost of domestic flights for essential services.
Virgin was unable to obtain financing from its shareholders, which include Etihad Airways with a 21pc stake, Singapore Airlines with 20pc, Chinese conglomerate Nanshan with 20pc, fellow Chinese conglomerate HNA with around 20pc and UK-based leisure and finance firm Virgin group with about 10pc.
Any refinancing of Virgin Australia may see all of these shareholdings dilute at the very least and evaporate if the airline goes out of business.
Australian airline Regional Express (Rex) separately said it will maintain air services to regional centres, including mining towns, after receiving a commitment from Canberra that it will underwrite the cost of flights for essential services and workers, including staff at mine sites.
