Indebted Virgin Australia goes into voluntary administration

Virgin Australia, the nation's second-largest airline, announced on Tuesday it had entered voluntary administration as it seeks to strengthen its finances amid a debt crisis.

Virgin said in a statement to the Australian Securities Exchange that it had appointed a team of Deloitte administrators to "recapitalize the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis".

The move came after the Australian government refused Virgin's request for a 1.4 billion Australian dollar (USD 888 million) loan.

Rival Qantas Airways argued that it had three times more revenue than Virgin and was therefore entitled to a AUD 4.2 billion (USD 2.7 billion) loan if the smaller airline was not to gain an unfair advantage.

Administrator Vaughan Strawbridge said in the statement: "Our intention is to undertake a process to restructure and refinance the business and bring it out of administration as soon as possible."