Natalie Williamson claims she, her 17-month-old son, Riley, and her now estranged husband were on a Virgin flight from Fiji to Sydney, when the flight attendant picked up Riley, placed him in the overhead locker and closed the latch.

Virgin has admitted an incident did take place, but claims Ms Williamson's husband was playing a peek-a-boo game with Riley involving the overhead compartment when the flight attendant joined in.

"We conducted a thorough investigation of the incident and the staff member involved was subsequently terminated," a Virgin spokeswoman said.

The airline offered Ms Williamson three free flights, but the mother has said she is too shaken by the mid-air experience to redeem them.