Virgin Australia On The Brink Of Falling Into Voluntary Administration

The jobs of more than 16,000 people hang in the balance as Virgin Australia is on the brink of financial collapse.

The company is heavily tipped to fall into voluntary administration after a failed meeting with the Australian government.

Prime Minister Scott Morrison knocked back a $1.4 billion bailout of the company, according to 7News, which would have helped it stay afloat for several more weeks.

Federal Treasurer Josh Frydenberg said Virgin shouldn't be coming to the government as the first port of call.

PA

He said: "They have some very big shareholders with deep pockets."

According to the company's last annual report, a large part of the company is owned by foreign groups.

Singapore Airlines, Etihad Airways and Chinese conglomerates HNA Group and Hanshan own 80 per cent of Virgin Australia; Richard Branson's group has a 10 per cent stake and Australia only owns 8.6 per cent.

Virgin Australia had been experiencing financial difficulties before the coronavirus pandemic saw airlines cut routes and pretty much shutdown.

Branson is also looking at the UK government to help out the Virgin Atlantic side of the business as well.

He issued a statement last night begging for financial assistance.

He said: "If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies. We all know what that would lead to.

"The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it.

"Without it there won't be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value."

It's not known yet what voluntary administration will mean for people's Velocity points, but an announcement on that is expected in the coming days or weeks.

People aware of the dire financial situation clearly wanted to cash in their points last night all at once.

Multiple posts on social media show the website had crashed while many tried to buy anything from wine to a toaster.

Topics: News, Australia

Stewart Perrie

Stewart Perrie is a Trending Journalist at LADbible. His first job was as a newsreader and journalist at the award winning Sydney radio station, Macquarie Radio. He was solely responsible for the content broadcast on multiple stations across Australia when the MH17, Germanwings and AirAsia disasters unfolded. Stewart has covered the conflict in Syria for LADbible, interviewing a doctor on the front line, and has contributed to the hugely successful UOKM8 campaign.

@stewartperrie