Accounting firm Deloitte has been appointed as administrators to help the troubled carrier restructure amid the devastating impact of the coronavirus crisis.

Virgin Australia is carrying about $5 billion in debt and its cash flow has collapsed due to the pandemic.

The move to place the company into voluntary administration comes after the Federal Government rejected a $1.4 billion bailout to keep the airline afloat.

Velocity Frequent Flyer is a separate company under the Virgin Group and is not in administration.

In a statement to the ASX this morning, Virgin Australia said the decision was made to “recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis”.

“The decision comes as the Group has continued to seek financial assistance from a number of parties, including state and federal governments, to help it through the unprecedented crisis, however it is yet to secure the required support,” the statement said.

“Virgin Australia will continue to operate its scheduled international and domestic flights which are helping to transport essential workers, maintain important freight corridors, and return Australians home.”

Administrators Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes of Deloitte will work as voluntary administrators supported by Virgin Australia’s management team, lead by chief executive Paul Scurrah.

“In 20 years, the Virgin Australia Group has earned its place as part of the fabric of Australia’s tourism industry,” Mr Scurrah said.

“We employ more than 10,000 people and a further 6000 indirectly, fly to 41 destinations including major cities and regional communities, have more than 10 million members of our Velocity loyalty program, and contribute around $11 billion to the Australian economy every year.

“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.”

Virgin Group founder Sir Richard Branson addressed the decision in a tweet directed to the Virgin Australia team.

Dear @VirginAustralia team. I am so proud of you and everything we have achieved together. This is not the end of Virgin Australia, but I believe a new beginning. I promise that we will work day and night to turn this into reality https://t.co/GJH1zhEqEd pic.twitter.com/GelLiA6DKG

— Richard Branson (@richardbranson) April 20, 2020

“I am so proud of you and everything we have achieved together,” he said.

“This is not the end of Virgin Australia, but I believe a new beginning. I promise that we will work day and night to turn this into reality.”

In Australia, Virgin employs about 10,000 people directly and supports another 6000 jobs indirectly. About 80 per cent of its direct workforce has already been stood down.

The airline is 90 per cent foreign owned. Abu Dhabi’s Etihad owns 21 per cent of the company, while Singapore Airlines and Chinese firms HNA and Nanshan Group each hold 20 per cent. The Virgin Group has a 10 per cent stake.

The Queensland and NSW governments had been in talks about possible bailout packages, with the NSW deal contingent on whether the Brisbane-based airline would relocate its headquarters.

Virgin Australia suspended its international operations due to the COVID-19 crisis and currently flies only one domestic service between Sydney and Melbourne.

Its subsidiary Tigerair Australia has stopped flying during the pandemic.

This article originally appeared on news.com.au and has been reproduced here with permission.