Tiger Air has been completely suspended, and Virgin is now only operating freight and essential services, as borders around the country begin closing.
Domestic services are being further reduced from 50 to 90 percent, with 125 aircraft grounded from midnight Friday though until mid June.
That’s in line with the earlier announcement of grounding international flights.
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Around 8,000 workers are being temporarily stood down as well.
The airline says it is still committed to transporting essential services, critical freight and logistics operations, along with assisting customers in reaching their destination as state borders tighten.
Virgin Australia CEO and Managing Director Paul Scurrah says it’s the biggest grounding of aircraft in this country’s history.
“From the end of this week, we will begin re-positioning and grounding more than 125 aircraft in our fleet, suspending almost all our domestic and international flying until at least the middle of June.
“I know our people have been working tirelessly to help guests get home ahead of the various state travel restrictions and their efforts should be applauded as they adapt to a rapidly changing environment.
“We plan to return Tigerair Australia and Virgin Australia to the skies as soon as its viable to do so, however I am mindful that how we operate today may look different when we get to the other side of this crisis.
“My focus has been on guiding this company through the crisis, and at the same time ensure the business is set on a sustainable path when the recovery eventually comes.
“I am only too aware of how much our people are hurting at the moment and these very tough decisions have weighed heavily on me and my leadership team.
“We are talking to our teams and we are working hard to do what we can to protect jobs and extend payments for as long as possible,” Mr Scurrah said.