Virgin Australia has entered voluntary administration after failing to secure sufficient financial support to sustain the business.
However, the group is proposing to restructure and refinance the carrier "to emerge stronger" once the coronavirus crisis abates.
In a letter to Virgin Australia staff, Virgin Group founder Richard Branson said he was proud of everything they had achieved over the past 20 years, and vow to ensure this was "not the end for Virgin Australia, but a new beginning".
"We will work day and night to turn this into reality," Branson vowed.
Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes of Deloitte have been appointed voluntary administrators of the company and a number of its subsidiaries. Velocity Frequent Flyer, which while owned by the group, is a separate company and is not in administration.
In a statement, Virgin Australia said the decision to enter into voluntary administration came despite the carrier seeking financial assistance "from a number of parties", including state and federal governments, "to help it through the unprecedented crisis". However, Virgin said it was yet to secure "the required support".
Virgin Australia will continue to operate scheduled domestic and international flights to transport essential workers, maintain freight links, and return Australians home.
“Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible," said Strawbridge. “We are committed to working with Paul [Scurrah, Virgin Australia group chief executive] and the Virgin Australia team and are progressing well on some immediate steps.
"We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interest so far."
Scurrah added: “Our decision is about securing the future of the Virgin Australia Group and emerging on the other side of the Covid-19 crisis. Australia needs a second airline and we are determined to keep flying.
"Virgin Australia will play a vital role in getting the Australian economy back on its feet after the Covid-19 pandemic by ensuring the country has access to competitive and high-quality air travel.”
The company’s board paid tribute to employees for their "hard work and contribution", adding the pandemic came as the group was working on a "significant transformation program" which they said would have consolidated its workforce, simplified its fleet and cut unprofitable routes.
Branson said Virgin Australia had succeeded in bringing "much-needed" competition to Australia’s aviation sector, lowering airfares, giving consumers greater choice, and creating thousands of jobs.
However, in a barb directed at the Australian government, Branson said: "In most countries, federal governments have stepped in in this unprecedented crisis for aviation to help their airlines. Sadly, this has not happened in Australia."
On the future of Virgin Australia, Branson said it was "not the end". "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. This is not the end for Virgin Australia, but I believe a new beginning."