Qantas will reportedly push for government assistance should Virgin receive rescue package

Australia's second largest carrier is seeking a federal government bailout after slashing its workforce and capacity because of the coronavirus pandemic.

Qantas has reportedly told the government it expects a $4.2 billion loan if Virgin Australia is bailed out. Source: AAP

Virgin Australia is seeking financial support from the federal government to survive the fallout from coronavirus pandemic.

The carrier, the second biggest after Qantas, wants a rescue package of up to $1.4 billion.

Virgin Australia told the share market it is seeking the funds from what it anticipates would be support for the wider industry.

Virgin Australia is seeking a rescue package of up to $1.4 billion. Source: AAP

It could involve the government becoming a part-owner.

Qantas has told the government it expects a $4.2 billion loan if Virgin Australia is bailed out, according to the Sydney Morning Herald.

Treasurer Josh Frydenberg declined to comment on any specifics, saying "we support strongly, the aviation industry."

"I've been in close contact with leaders of the business community including the aviation sector (Virgin boss) Paul Scurrah and (Qantas chief) Alan Joyce," he told ABC radio.

"But we have already illustrated our commitment to having a viable, sustainable aviation sector with more than $700 million in fees being waived."

Mr Frydenberg said the transport of freight and people was important to the economy.

Qantas chief Alan Joyce says his company has een in close contact with leaders of the business community, including those spearheading rival outfit Virgin. Source: AAP

"We'll continue that dialogue with key stakeholders," he said.

The airline recently cut its workforce by 80 per cent and its capacity by 90 per cent.

Global credit rating agency Fitch on Monday put Virgin Australia on rating watch negative citing a drop in demand in the aviation market due to the coronavirus.