Embattled Virgin Australia has said it will ground all domestic flights except a single daily trip from Sydney to Melbourne due to coronavirus, and is seeking AU$1.4bn (£707m) in government aid.
The severely reduced programme will run through to 15 June at the earliest.
It is understood that Virgin is seeking the cash in the form of a loan, which could then be converted into equity.
However, the Australian authorities have indicated that any financial help is likely to be industry-wide rather than airline specific.
“We continue to talk to airline executives on a regular basis as we navigate this unprecedented situation,” deputy Prime Minister Michael McCormack said today.
“All levels of government, airports, airlines and the whole sector will need to work together to ensure Australia’s aviation industry emerges from this crisis in the best position possible.”
The government has already announced some aid to the industry as a whole, including refunding and waiving charges such as domestic air traffic control fees worth AU$715m and AU$198m in support for regional aviation.
The measures come after Virgin had already cut all international services, put the majority of staff on leave and cut all pilots at budget subsidiary Tigerair.
The drastic steps stand in contrast to Virgin’s biggest rival Qantas, which, although it has cut its flights, has maintained services to every capital city and 25 regional destinations.
However, it did say that it expected to fly 95 per cent fewer passengers this year than over the Easter holiday last year.
The two airlines have been involved in a spat recently over claims that Qantas has been briefing the media about Virgin’s alleged financial insecurity.
Virgin has referred the case to Australia’s competition authority, saying that its rival has been encouraging people to speculate that Virgin should not be permitted state aid due to its lack of funds.