Virgin Australia forced into voluntary administration

Virgin Australia has entered voluntary administration with the goal of recapitalising the business and ensuring it emerges in a stronger financial position on the other side of the COVID-19 crisis.

The decision comes as the Group has continued to seek financial assistance from a number of parties, including State and Federal Governments, to help it through the unprecedented crisis, however is yet to secure a deal.

The Group’s Board of Directors has appointed Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes of Deloitte as voluntary administrators of the company and a number of its subsidiaries.

Velocity Frequent Flyer, while owned by the Group, is a separate company and is not in administration.

Virgin Australia will continue to operate its scheduled international and domestic flights which are helping to transport essential workers, maintain important freight corridors, and return Australians home.

The administrators will be supported by the Group’s current management team, led by Chief Executive Officer Paul Scurrah, and will work closely with team members, suppliers, and partners throughout the process.

Administrator, Vaughan Strawbridge, said the intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible.

“We are committed to working with Paul and the Virgin Australia team and are progressing well on some immediate steps. 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 ACTU Australia has called on the Morrison Government to intervene immediately to “save the jobs of 16,000 Virgin workers”, in light of the announcement that Deloitte has been appointed as administrator of the company.

ACTU President Michele O’Neil said if the Morrison Government does not immediately intervene, they will be “responsible for the biggest airline collapse in Australia’s history”.

“16,000 workers and their families have been abandoned by the Government. The Morrison Government could have chosen to save these workers’ jobs at any time over the past four weeks,” said O’Neil.

“Instead, they chose to sit by and do nothing, and watch as 16,000 jobs were pushed closer and closer to the brink of destruction.

“It is not too late. Virgin Australia can still be rescued. It must keep trading in administration, and then come out of administration with new shareholders that include the Federal Government.”