Virgin Atlantic – which is 49% owned by Delta – files for bankruptcy as pandemic savages airline industry

  • Virgin Atlantic filed for Chapter 15 bankruptcy in New York on Tuesday
  • Chapter 15 allows foreign debtors to protect U.S. assets from creditors
  • Company says it is pursuing a ‘solvent restructuring’ under British law
  • Warned London court it would run out of cash next month if no deal is reached  
  • Virgin Atlantic is the second airline in the Virgin Group to file for Chapter 15 
  • Virgin Australia also sought protection after filing for voluntary administration  
  • The airline industry has been devastated by the pandemic as travel bans and border closures forced carriers to ground planes 

Virgin Atlantic has become billionaire Richard Branson’s second airline to file for Chapter 15 bankruptcy in the U.S. this year as the industry continues to be ravaged by the coronavirus pandemic.

Virgin Atlantic’s filing on Tuesday in U.S. bankruptcy court in the Southern District of New York said it has negotiated a deal with stakeholders ‘for a consensual recapitalization’ that will get debt off its balance sheet and ‘immediately position it for sustainable long-term growth.’

The U.S. filing is in addition to a proceeding filed in a British court, where Virgin Atlantic obtained approval Tuesday to convene meetings of affected creditors to vote on the plan on August 25.

A Virgin Atlantic spokesperson said that the company was pursuing a ‘solvent restructuring’ under British law. The filing means the airline is not yet going into liquidation or going out of business — but the company warned that if a deal with creditors isn’t reached, it could run out of cash by September.

The company’s filing comes just a day after Branson announced he could launch into space aboard his Virgin Galactic aircraft as its first passenger early 2021, potentially blazing a path for commercial flights.

www.dailymail.co.uk/news/article-8593311/Virgin-Atlantic-billionaire-Richard-Bransons-second-airline-file-bankruptcy.html