Virgin Australia is expected to go into voluntary administration on Tuesday following a board meeting of its international shareholders.
The move could threaten jobs for New England residents not only in the aviation industry but also the tourism sector said Labor senator Tim Ayres.
He has called on Barnaby Joyce to pressure Scott Morrison to save Virgin Australia.
Senator Ayres said the Federal Government needs to guarantee Australia’s two major airlines will survive to protect New England jobs, services and ongoing access to regular and affordable flights to other parts of the country.
“Tamworth’s economy is already doing it tough as a result of COVID-19, it cannot afford to be hit by losing Virgin Australia,” he said.
“Barnaby Joyce must pick up the phone and push Scott Morrison to urgently extend a lifeline to Virgin Australia to support jobs and livelihoods in New England."
The meeting on Monday came after Virgin went into a trading halt on the stock exchange last week and the federal government rejected its pleas for financial aid.
The airline pleaded for a 1.4 billion financial lifeline which was rejected.
Senator Ayres said the government has shown a willingness to provide direct support to airlines with a $100 million package to address the cash flow crisis of a dozen regional airlines, including majority foreign-owned Regional Express.
He added it must now provide direct support to large aviation companies, like Virgin Australia, through extending or guaranteeing lines of credit and taking an equity stake.