CreditorWatch said many smaller suppliers will find themselves on the brink of insolvency due to Virgin’s crash landing.

Half a dozen trade creditors are present on the official committee of inspection overseeing Deloitte’s process. But more than double that had their applications rejected.
Those chosen for the committee, which creditors will vote to approve on Tuesday, include technology company Sabre, charter carrier Alliance Airlines, contractors Spotless and Airline Cleaning Services, Boeing’s pilot training subsidiary, and travel agent Carlson Wagonlit.
Mr Coghlan said the distress for many of the suppliers traced back to the market concentration of the domestic aviation industry.
“It’s a niche industry. They’re supplying Virgin, and they are probably providing Qantas as well and maybe not much more,” he said.
“There’s money to be made. But you have that huge concentration risk that if one goes or both goes or something like this happens you go to zero. A lot of these people are relying on an income stream of from one or two customers and when you lose one or you lose both you there’s nothing you can do about it.”
He said many Virgin suppliers were in limbo due to the airline’s operational downturn since the beginning of the coronavirus outbreak, which crushed travel demand through widespread restrictions on movement.
Virgin now only runs a skeleton domestic and international network underwritten by the federal government.
“They have to wait until the administration and the sale takes place to find out if they will get any money 90 per cent or 95 per cent of them are unsecured and then position themselves for a contract on the other side,” Mr Coghlan said.
There are around 20 bidders in the race to buy Virgin as it stands, according to Deloitte. They include private equity, institutional investors plus big names such as iron ore magnate Andrew Forrest and Virgin Group’s billionaire founder Richard Branson.
Deloitte has put a deadline of May 15 for all indicative non-binding offers.
Meanwhile, Qantas has told plane manufacturers Boeing and Airbus it would defer its intake of new planes including three Boeing 787-9 due to arrive this year indefinitely due to the coronavirus crisis.
A Qantas spokesman said the airline has yet to map out a revised timeline for the deliveries. The delay will also see budget subsidiary Jetstar go without the 18 Airbus A321neos that it was due to take.
Qantas said this move was consistent with steps taken at other airlines, with Hong Kong Cathay Pacific and British low-cost airline EasyJet set to defer their deliveries as well.