International effects on the Virgin Australia business

In 2020, Virgin Australia faced significant financial loss due to the strain of the COVID-19 pandemic. Due to the pandemic, international tourism and recreational travel business suffered immensely and had a huge impact on the aviation industry.

While Virgin temporarily went back to being an airline that was domestic-only, it did not manage to last very long. It applied for a heft $1.4 billion bailout loan from the Australian Government. In response to this, Qantas argued that it needed a proportional bailout due to the fact its network was 3 times larger than that of Virgin.

It was announced that Virgin Australia and Qantas would be leveraged by the Australian Federal Government to run essential travel only international network. It then had a twice-weekly flight to Hong Kong and a once-weekly flight to Los Angeles. At this point, Virgin Australia also shut down its operation in New Zealand, a move which caused approximately 600 jobs to be lost.

Virgin Australia eventually went into voluntary administration. The reason for this was declared as an inability to have operation continue without a significant bailout from the Australian Government.

Virgin Australia is the main example of the devastating effect that COVID had on the aviation industry around the world. This was no doubt due to the fact that the virus could spread easily on planes were people were in close proximity to each other, and that several outbreaks were tied to tourists

Aviation is only one of the industries that were affected severely by the COVID pandemic. Of course, the tourist industry that is related to aviation was affected, as well as many other industries such as film and live music where public gatherings were part of the experiences on offer for customers.