Cash-strapped Virgin Australia Holdings Ltd on Thursday suspended trading in its shares to continue talks on financial aid and restructuring alternatives to help it weather the coronavirus crisis.

Australia's second-biggest airline said those discussions remained confidential and incomplete. It did not provide further detail, including the identity of the parties it is talking with.

The trading suspension will last for up to seven days, extending a trading halt that has been in place since Tuesday.

Virgin has so far been unsuccessful in its request to the Australian government for A$1.4 billion (US$883.54 million) in loans that it could convert to equity under certain circumstances.

The opposition Labor Party supports a government lifeline to Virgin, which is more than 90% foreign owned, while rival Qantas Airways Ltd has said any government support should be offered to both carriers.

"We want to see two airlines in the domestic market but we're not in the business of owning an airline," Australian Treasurer Josh Frydenberg said on television network Nine on Thursday.

Virgin is also in talks with creditors about debt restructuring options such as a debt-for-equity swap and has hired UBS, Morgan Stanley, Houlihan Lokey and Deloitte as advisers, according to a person with knowledge of the matter.

Entering voluntary administration is a last resort but the airline believes it needs a decision on government aid by next week, the person, who was not authorised to speak publicly, said.

Qantas would have an effective monopoly in the Australian market if Virgin disappeared. It would be difficult for a start-up airline to gain financing given the current drop in demand and regulatory approvals to fly could take around a year to receive, analysts said.

Air New Zealand Ltd, which is licensed to operate in the Australian domestic market, sold its shares in Virgin in 2016.

The New Zealand carrier is focused on its own survival plan, including a permanent 30% reduction of its workforce, rather than entering the Australian market, according to a person with knowledge of the matter who was not authorised to speak with media.

"We have no plans to operate domestic services in Australia," an Air New Zealand spokeswoman said on Thursday.