Virgin Australia is also sacking a third of its workforce - 3000 staff - as the crippled airline plots a flightpath out of the coronavirus pandemic.

In an announcement to the stock market on Wednesday, Virgin Australia said it was discontinuing its budget offering Tigerair, at least until customer demand improved.

Jestar, owned by rival Qantas, is now the sole surviving low-cost airline.

Virgin says all travel credits will be honoured and it remains committed to regional and charter flights.

The trimmed-down airline plans to offload some of its fleet.

"Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer," chief executive Paul Scurrah said.

"Our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10-million-member strong Velocity frequent flyer program."

The Australian Services Union, which represents some Virgin staff, said the job losses were shattering.

"It will mean thousands of skilled workers leaving our critical aviation sector. And thousands of people losing their jobs at the height of this crisis when it is hardest to find work," the union said.

"For months now, we have been calling for the Morrison government to urgently implement an aviation support package.

"It is beyond time for Morrison to step up and deliver."

When the aviation market recovers, Virgin plans to pick up 2000 extra workers, although it warns that may take at least three years.

Meanwhile, Virgin will streamline its fleet by shedding its Boeing 777s, Airbus A330s and Tigerair Airbus A320s.

It will retain the Boeing 737s and regional and charter aircraft.

The airline has been struggling under billions of dollars in debt and the impact of the pandemic on the passenger market, which has led to the near-collapse of international and domestic travel.

Bain Capital is expected to take control of the airline in coming weeks after it plunged into voluntary administration earlier this year.

It will remain based in Brisbane.

Australian Associated Press