The airline is the first high-profile Australian company to go belly up under a sky-high debt burden.
Virgin Australia has appointed Deloitte as administrator after its business was pummelled by the coronavirus, which has caused precipitous drops in air traffic worldwide.
“Our intention is to undertake a process to restructure and refinance the business and bring it out of administration as soon as possible,” said administrator Vaughan Strawbridge.
“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far.”
The crisis came as Virgin Australia was undertaking a “significant” transformation program by consolidating its workforce and withdrawing from unprofitable routes.
“Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis,” said CEO Paul Scurrah. “Australia needs a second airline and we are determined to keep flying. 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 and high-quality air travel.”
But while Virgin hopes to bounce back, the government has ruled out a bailout.
“The government remains committed to two commercially viable airlines operating domestically across Australia,” said Treasurer Josh Frydenberg. “This will be good for jobs, competition, lower prices & the Australian economy overall. The government continues to support a market-led solution.”