Virgin Australia is expected to announce it will go into voluntary administration, with Deloitte tipped to step in to help the company restructure about $5 billion in debt and pay off its creditors, including worker entitlements.

Key points: Virgin are expected to make the announcement to the ASX later this morning

Virgin are expected to make the announcement to the ASX later this morning The airline is in prime position for takeover by a private equity firm

The airline is in prime position for takeover by a private equity firm Virgin grounded all but one of its 130 planes and temporarily stood down about 8,000 workers

The cash-starved airline is expected to make the announcement to the ASX this morning, after management, including CEO Paul Scurrah, failed to convince the Federal Government to step in with a $1.4 billion bailout.

It is understood Virgin Australia's board met on Monday night to decide the company's future, including the possibility of going into voluntary administration — where an insolvent company is placed in the hands of an independent person who can assess the best path forward for its business owner and creditors.

The airline is in prime position for takeover; private equity firms have been circling as credit ratings agencies recently downgraded Virgin's rating, saying a "default" was likely.

Last month, about 8,000 of 10,000 workers at Virgin Australia were temporarily stood down as it grounded most of its planes due to coronavirus.

Virgin Australia is majority foreign-owned by Etihad Airways (20.94 per cent stake), Singapore Airlines (20.09 per cent), Nanshan Group (19.98 per cent), HNA Group (19.82 per cent) and Richard Branson's Virgin Group (10.42 per cent), but none of these shareholders have stepped in to help as they are battling their own coronavirus-induced problems.

There are fears that until a new airline can establish itself as a formidable competitor to Qantas, consumers may lose out with higher fares and reduced flight options.

Until coronavirus grounded all but one of its planes, Virgin Australia had a fleet of about 130 aircraft flying to 41 destinations around the world.

It may have to revert to being a pure domestic player.

Critics against a bailout have repeatedly argued that it is not the role of the Federal Government to give handouts to badly managed airlines.

Over the past decade, Virgin made a full-year profit just twice.