June 11, 2020 / 3:17 AM / 24 days ago

Virgin Australia to double domestic flight capacity by early July

* Increase equates to 13% of normal capacity from 6%

* Rival Qantas also has announced plans to boost capacity

* Travel demand rising as state border restrictions ease

SYDNEY, June 11 (Reuters) - Airline Virgin Australia Holdings Ltd said on Thursday it would double domestic capacity by early July as state border restrictions ease and demand grows, joining rival Qantas Airways Ltd in adding a significant number of flights.

Virgin Australia, the country’s second-biggest carrier, entered voluntary administration in April owing nearly A$7 billion ($4.88 billion) to creditors, but has been flying a limited government-supported network during the coronavirus pandemic that has decimated travel and roiled airlines around the world.

The airline said it would add 30,000 seats across 320 one-way flights per week to its schedule, boosting capacity to around 13% of normal from the current 6%.

Qantas last week said it would triple domestic capacity to 15% of normal by the end of June by adding more than 300 return flights per week. Before the pandemic, Qantas had a nearly two-thirds share of the domestic market.

In a note issued on Thursday before Virgin Australia’s statement, credit ratings agency Moody’s said ongoing uncertainty related to Virgin could benefit Qantas.

Meanwhile binding offers for Virgin Australia from finalists Bain Capital and Cyrus Capital Management are due on June 22, Reuters reported last week, citing a source with knowledge of the matter.

Administrator Deloitte has said it hopes to agree a deal with the winner by the end of the month ahead of a second meeting of creditors in August to vote on approval.

$1 = 1.4335 Australian dollars Reporting by Jamie Freed; Editing by Kenneth Maxwell

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