Virgin collapse hints at further turmoil facing Asian airlines

Government support critical to industry's overall survival

20200421 Virgin Australia

Virgin Australia Holdings Ltd said on Tuesday it has entered voluntary administration to recapitalise the business and emerge in a stronger financial position © EPA/Jiji

ERI SUGIURA, Nikkei staff writer

TOKYO -- The collapse of domestic and international carrier Virgin Australia could be just the start of a radical reorganization facing Asia's aviation sector in the wake of the devastating coronavirus crisis.

Virgin Australia entered the market in 2000, targeting cost-sensitive passengers, but it suffered from fierce competition with budget carriers. Without lucrative business-use customers to fill the void, the carrier recorded a seven-year consecutive net loss.

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