The cash-strapped Virgin Australia announced on Tuesday that it had decided to stop paying, making it the world's largest airline to collapse from the fallout from the emerging Corona virus.
The company stated in a notice to the Australian Stock Exchange that it intends to continue operating its flights, even though its fate is in the hands of judicial guards.
"Our decision today is to secure the future of the Virgin Australia Group and get out of the Covid Crisis-19," the company's CEO, Paul Skoura, said in the notice.
He added, "Australia needs a second airline and we are determined to continue flying."
Virgin Australia, with a staff of about 10,000, is under debt of more than A $ 5 billion ($ 3.2 billion) and has asked the Australian government to lend A $ 1.4 billion to survive, but Canberra has refused to rescue a company that is majority owned by foreigners.
Earlier, British businessman Richard Branson, owner of the Virgin Group, stressed that "Virgin Australia is fighting for survival and needs help to navigate this global catastrophe."
He also addressed a letter to Virgin Atlantic Airways staff, explaining that the company needs government financial assistance to escape the severe consequences of the Corona virus on the aviation sector.
Branson pledged to "do everything he can" to continue the work of Virgin Atlantic.
He wrote in his speech: "We all need government assistance to achieve this in light of the severe mystery surrounding travel today and not knowing how long the restrictions will continue to fly."
"The assistance will be in the form of a commercial loan, and the company will repay the loan," he said, noting that easy-cost airline EasyJet had obtained a loan of 600 million pounds ($ 746 million).
The Financial Times reported last Friday that the government had asked Virgin Atlantic to re-apply for a rescue package worth 500 million pounds, after it felt that the company had not shown that it had studied other options to obtain additional funds.