The debt-laden carrier became the outbreak’s biggest airline scalp when it handed control to administrators on Tuesday. A near-halt in passenger revenue overwhelmed the Brisbane-based company in less than two months.

“We should get used to news of this kind,” said Volodymyr Bilotkach, a lecturer in air-transport management at the Singapore Institute of Technology. “We’ll see more airlines go under.”

The speed of Virgin Australia’s unraveling suggests industry groups haven’t been exaggerating in raising the alarm with increasing frequency. The International Air Transport Association, which represents nearly 300 airlines, has said half face bankruptcy in two to three months without government help. Many carriers have furloughed staff and grounded entire fleets. IATA has warned that 25 million jobs in aviation and related sectors are at risk.

In Australia, the government rejected Virgin Australia’s initial plea for a A$1.4 billion ($884 million) loan. Several other proposals for state aid met the same response, according to Chief Executive Officer Paul Scurrah, until a final request for just A$200 million was rebuffed Monday.

Other carriers struggling to tap rescue funds are also teetering.

No Wages

Virgin Atlantic Airways Ltd. is battling to convince a skeptical U.K. government to step in provide backing, with billionaire founder and 51% owner Richard Branson saying Monday that the carrier won’t survive without outside help.

Discount airline Norwegian Air Shuttle ASA, which has grounded its entire fleet, said Monday it put four pilot and cabin-crew units in Denmark and Sweden into bankruptcy protection because it couldn’t pay salaries. The company has floated a debt-for-equity swap in a bid to meet the terms of bailout funds from Norway’s government.

South African Airways, which last made a profit in 2011, plans to lay off its entire workforce after failing to persuade the government to provide more financial aid. The coronavirus may prove too much for the 86-year-old airline, which was reducing routes and considering job cuts even before the outbreak.
Source: Bloomberg