In short, I think this is just a continuating of the havoc of what we are observing with the COVID-19 outbreak and how it is directly affecting the travel industry.
However, I think the shareholding details of SIA in Virgin Australia is around 20% of the entity as the second largest carrier in Australia. But I feel in the short run its not going to move the prices much unless Virgin Australia goes into full liquidation and the price drops to zero.
I would say administration is the step before liquidation, meaning that the company is looking for a consulting company in this case Deloitte to look after the company to find ways to cut costs and restructure.
Here are more details:
Virgin Australia, partly owned by Singapore Airlines, said on Tuesday (Apr 20) it entered voluntary administration to recapitalise the business after being battered by the coronavirus crisis, making it the largest airline to collapse under the shock of the coronavirus outbreak.
In an announcement to the Australian Stock Exchange (ASX), Virgin said it planned to keep operating flights despite handing over the keys to administrators.
"Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis," CEO Paul Scurrah said in the statement.
"Australia needs a second airline and we are determined to keep flying."
More than 90 per cent of Virgin Australia's shares are controlled by a group of investors including Singapore Airlines, Etihad Airways, Chinese conglomerate HNA Group and Richard Branson's Virgin Group, which have all suffered a sharp deterioration in revenue because of the coronavirus pandemic.
The airline was more than A$5 billion (US$3.2 billion) in debt and had appealed for an A$1.4 billion loan to stay afloat, but the government refused to bail out the majority foreign-owned company.
It had reported seven consecutive annual losses even before the coronavirus pandemic decimated domestic and international demand.
In short, I think this is just a continuating of the havoc of what we are observing with the COVID-19 outbreak and how it is directly affecting the travel industry.
However, I think the shareholding details of SIA in Virgin Australia is around 20% of the entity as the second largest carrier in Australia. But I feel in the short run its not going to move the prices much unless Virgin Australia goes into full liquidation and the price drops to zero.
I would say administration is the step before liquidation, meaning that the company is looking for a consulting company in this case Deloitte to look after the company to find ways to cut costs and restructure.
Here are more details:
Virgin Australia, partly owned by Singapore Airlines, said on Tuesday (Apr 20) it entered voluntary administration to recapitalise the business after being battered by the coronavirus crisis, making it the largest airline to collapse under the shock of the coronavirus outbreak.
In an announcement to the Australian Stock Exchange (ASX), Virgin said it planned to keep operating flights despite handing over the keys to administrators.
"Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis," CEO Paul Scurrah said in the statement.
"Australia needs a second airline and we are determined to keep flying."
More than 90 per cent of Virgin Australia's shares are controlled by a group of investors including Singapore Airlines, Etihad Airways, Chinese conglomerate HNA Group and Richard Branson's Virgin Group, which have all suffered a sharp deterioration in revenue because of the coronavirus pandemic.
The airline was more than A$5 billion (US$3.2 billion) in debt and had appealed for an A$1.4 billion loan to stay afloat, but the government refused to bail out the majority foreign-owned company.
It had reported seven consecutive annual losses even before the coronavirus pandemic decimated domestic and international demand.