Branson lashes out after Virgin Australia collapses

Sir Richard Branson attacked the Australian government for refusing to bail out Virgin Australia, as a rival airline in the UK was given the green light for taxpayer support.

Virgin Australia has gone into voluntary administration due to impact of the coronavirus pandemic, the airline announced on Tuesday. It is hoped the business will be able to re-emerge in a more stable position rather than disappearing completely.

Like many of its rivals, the 20-year-old firm has been hammered by a global collapse in air travel. Much of its 94-strong jet fleet has been grounded for weeks.

Sir Richard had been pressing for state support from Canberra and hit out after failing to get help.

He said: "In most countries federal governments have stepped in. Sadly, that has not happened in Australia."

In a statement to the Australian Stock Exchange, the business said: "Virgin Australia has entered voluntary administration to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the Covid-19 crisis."

Sister firm Virgin Atlantic is still locked in talks with the British government about a separate rescue, but there are fears it will not be able to offer up sufficient security.

Sir Richard has even offered to mortgage the Caribbean island he calls home in return for a government loan.

Separately London-listed budget airline Wizz Air said it had been given the green light to tap the Bank of England for support using a short-term loan scheme for the biggest companies.

The airline did not offer further details of whether it plans to access state aid, stressing only that its balance sheet is one of the strongest in the industry.

EasyJet was the first major airline to tap taxpayers for support, securing a £600m loan from the Bank-backed Covid Corporate Financing Facility earlier this month.

Virgin Australia's insolvency followed a meeting where shareholders voted against providing more financial support.

The airline had asked the Australian government for £710m but the request was denied, prompting the board to appoint Deloitte has voluntary administrators.

The carrier, which serviced some international destinations as well as dozens of domestic routes, was founded in 2000 by Branson and is the main rival to Qantas in Australia.

In a letter staff, Sir Richard said it was "not the end for Virgin Australia, but I believe a new beginning".

He said: "Never one to give up, I want to assure all of you – and our competitor – that we are determined to see Virgin Australia back up and running soon.

"We will work with Virgin Australia's administrators and management team, with investors and with government to make this happen and create a stronger business ready to provide even more value customers, competition to the market, stimulus to the economy and jobs for our wonderful people.

"Virgin Australia has captured the hearts of all Australians. That is down to all of you – past and present – who made it the best airline to fly within Australia."

Sir Richard owns about 10pc of the company, with other investors including Etihad Airways, Singapore Airlines and China's HNA Group.