Virgin Australia boss Paul Scurrah says more than 1,000 of the workers it has stood down this week will probably be made redundant during the coronavirus pandemic.
Virgin Australia had on Wednesday said it would suspend 8,000 of its 10,000 workers as it slashed domestic flights.
Mr Scurrah on Thursday gave more detail to ABC TV and said: "This is the worst airline crisis the world has ever seen."
All 8,000 affected staff have been encouraged to take leave, and consider leave without pay.
Those to be made redundant could include pilots at Tigerair's Melbourne base, which the airline outlined on Wednesday. About 220 pilot jobs could go.
About 500 crew and pilots in New Zealand could suffer the same fate, according to Virgin.
Remaining workers are providing essential services such as transporting critical freight.
Mr Scurrah said Virgin was talking to major employers about finding work for affected employees.
The airline had already announced 750 layoffs late last year in a bid to turn around its flagging financial performance.
Elsewhere in the travel industry, Qantas last week stood down 20,000 of its 30,000 workers, while bookings agency Flight Centre says an initial 6,000 sales and support staff will either be stood down or made redundant.
Another travel agency, Helloworld, said it will be sack 275 people and stand down another 1,300 workers.
A growing number of retailers and hospitality groups, including Justin Hemmes' Merrivale empire and The Federal Group, have also suspended thousands of employees.
The federal government last week provided a $715 million rescue package for airlines, which will involve forgoing fuel excise, air service charges and regional security fees.
Shares in Virgin were trading nearly 20 per cent higher at 8.5 cents at 1500 AEDT.