Richard Branson’s Virgin Atlantic files for bankruptcy protection as its revealed airline may run out of cash next month

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RICHARD Branson’s Virgin Atlantic has filed for bankruptcy protection as its revealed airline may run out of cash next month.

The last gasp bid comes after Virgin Australia fell into administration earlier this year amid the coronavirus pandemic grounding international flights.

Richard Branson’s airlines are feeling the pinch due to the pandemic

Virgin Atlantic has filed for bankruptcy protection in the US as Branson tries to nail down a £1.2billion rescue plan.

It came just hours after the company told a court in London it could be forced to fold as earlier as next month.

The Virgin Group airline filed for Chapter 15 bankruptcy protection in the Southern District of New York on Tuesday.

The court filing means it is protected from the US bankruptcy courts, and signals to them about rescue plans underway abroad.

Branson’s flights have been hit hard by the pandemic, with thousands of plans grounded worldwide due to fears over the spread of the virus.

Virgin Atlantic, which is based in London and 49% owned by Delta Air Lines, was forced to ground all passenger operations back in April.

It was back flying again in July, but travel restrictions and low consumer confidence has still seen small passenger numbers.

Virgin’s filing in the US court said it had negotiated a deal with stakeholders “for a consensual recapitalization”.

It said it would get debt off its balance sheet and “immediately position it for sustainable long-term growth.”

Chapter 15 bankruptcy protection is used to block creditors who want to file lawsuits or tie up assets in the US.

It does not mean the company

Virgin Atlantic saw its flights grounded in March due to the pandemic

A Virgin Atlantic spokeswoman said the restructuring plan was before a British court “to secure approval from all relevant creditors before implementation.”

 

More to follow…

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