CANBERRA, Australia (AP) — Virgin Australia, the nation’s second-largest airline, announced Tuesday it had entered voluntary administration as it seeks to strengthen its finances amid a debt crisis.

Virgin said in a statement to the Australian Securities Exchange that it had appointed a team of Deloitte administrators to “recapitalize the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis.”

The move came after the Australian government refused Virgin’s request for a 1.4 billion Australian dollar ($888 million) loan.

Rival Qantas Airways argued that it had three times more revenue than Virgin and was therefore entitled to a AU$4.2 billion ($2.7 billion) loan if the smaller airline was not to gain an unfair advantage.

Administrator Vaughan Strawbridge said in the statement: “Our intention is to undertake a process to restructure and refinance the business and bring it out of administration as soon as possible.”

Virgin would continue to operate its scheduled international and domestic flights, the vast majority of which have been canceled due to the coronavirus pandemic.

Virgin shares have been in a trading halt for a week due to its debt crisis.

Virgin Australia’s major shareholders are Singapore Airlines and Etihad Airways as well as Chinese investment conglomerates Nanshan Group and HNA Group. British billionaire founder Richard Branson holds a 10% stake.

Treasurer Josh Frydenberg told reporters his “government was not going to bail out five large foreign shareholders with deep pockets who together own 90% of this airline.”

The Brisbane-based airline has 130 aircraft and employs 10,000 staff.

Australian governments and businesses fear that a collapse of Virgin would leave Qantas with a virtual monopoly in Australia’s domestic aviation market.

Virgin filled a gap left when Qantas' former main domestic rival, Air New Zealand-owned Ansett Australia, collapsed in 2001.

Finance Minister Mathias Cormann said his government wouldn't consider intervening until “the private sector opportunities have been exhausted.”

"The government is not in the business of owning an airline,” Cormann said, referring to a potential deal in which the government bought equity in Virgin.

“But we do want to see two airlines continue and we believe that the opportunities (are) there out of the administration process for that to happen,” Cormann added.

But opposition lawmakers and union leaders called for the government to bail out Virgin to save jobs and low-price domestic airfares.

“This crisis isn’t a result of market failure, it’s a result of a government decision to shut the market,” opposition leader Anthony Albanese said. “That’s why talk of market-based solutions at the moment is a triumph of ideology over common sense.”