Virgin Australia has gone into a trading halt for a second time as it is considers going into administration.
The beleaguered airline is facing a race against time as it burns through cash while being forced into grounding almost its entire fleet. It is currently only operating one daily flight between Sydney and Melbourne.
The airline has called on the Federal Government to step in and offer financial support as it buckles under a $4.8 billion debt pile and a long wait before it can start flying again. Virgin Australia has asked for a $1.4 billion loan from the government as part of a proposed broader $5 billion airline sector bailout.
Virgin Australia has stood down the majority of its workforce in an effort to cut costs, and hired insolvency experts Deloitte to work on restructure scenarios, according to Guardian Australia.
It is also believed that the carrier has hired debt expert Jim McKnight from investment bank Houlihan Lokey to help it through the coronavirus crisis.
In a statement to the stock exchange Virgin Australia said it “continues to consider the issues brought about by the Covid-19 crisis including discussions with respect to financial assistance and restructuring alternatives which are ongoing”.
There has been speculation that another foreign airline could step in if Virgin Australia goes under. But Leader of the Opposition Anthony Albanese said the idea was unrealistic.
“The idea that Virgin can disappear and someone will just come in and pick up what’s left is just a triumph of hope over reality, which is why people in the government are talking about opening up Australian domestic routes to foreign carriers, which would carry foreign crew and pay foreign wages,” he said.