A woman has been banned from Virgin airlines for life after she was filmed hurling racist insults at a Sydney family.

Fijian authorities are investigating after the woman on board flight VA 181 to Nadi began verbally abusing the family sitting across from her.

“You’re a f------ Muslim,” the woman was filmed saying to the passengers, slurring her words.

The woman’s distressed son can be seen repeatedly putting his hands over her mouth in an attempt to stop her ranting.

“Are you f------ kidding me? I’ve done nothing wrong. I’m sitting here,” she argues as cabin crew repeatedly try to subdue her.

“Now we’re a minority.”

The woman then threatens to “knock out” the passenger filming her.

“Keep recording. I’m going to knock her out. So you’re not worried about those that chop people’s heads off? Wow.

“But that’s okay, that’s okay,” she mocks.

The family at the receiving end of the woman’s insults claim she had been drinking vodka from a bottle in her handbag throughout the flight.

"For her to sit there and accuse us of being Muslim terrorists and associating us with those people, who are just the minority that do those things, it was offensive to us," a family member who does not want to be identified told 9NEWS.

The woman was escorted from the plane by Fijian authorities.

"Virgin Australia takes the safety of our guests and our crew very seriously. On board Virgin Australia flight VA 181 from Sydney to Nadi on 4 May 2017, a passenger acted in an inappropriate manner towards other passengers and our crew," the airline said in a statement this afternoon.