Virgin Australia’s board is set to throw in the towel after repeated efforts to secure a financial lifeline from the Commonwealth government.

Instead, that role is expected to fall to the administrator, which would be charged with running the company and sorting out its capital structure. It would also be expected to oversee a sale, which would be open to private equity firm BGH Capital and other potential buyers.
Deloitte is believed to be in line to secure the administrator’s role, as this column flagged on Sunday.
It comes after Virgin made a huge push to oversee its own restructure and shore up the company’s financial position and save the jobs of its 10,000-odd employees. It would argue its own management team is better placed to identify cost cuts and run the airline than anyone else.
However, Virgin’s plan relied on further support from Australia’s government in the form of a capital injection, in the same way governments offshore have propped up their own airlines to help them survive the COVID-19 pandemic.
Should Virgin head into administration as expected, it would collapse owning about $5 billion to a range of creditors including banks and retail and institutional investors who own the company’s boards.
It would also likely crystalise losses for its shareholders, and see Virgin become the first big corporate collapse of the COVID-19 pandemic, which has brought the domestic and international tourism sectors to a standstill and had a big impact on the wider economy.