Virgin Atlantic secures £160m in fresh funding
Virgin Group will contribute around £100 million of new funding to Virgin Atlantic to help the carrier survive until mass travel restarts in the wake of the Covid-19 pandemic.
The loan from Virgin Group, which owns 51 per cent of the airline, forms part of a £160 million support package that is close to being finalised, Virgin Atlantic confirmed.
The deal also includes payment deferrals with creditors.
A Virgin Atlantic spokesperson said: “We continue to bolster our balance sheet in anticipation of the lifting of international travel restrictions during the second quarter of 2021.
“This latest £160 million financing provides further resilience against a slower revenue recovery in 2021 and follows a $230 million financing on two Boeing 787s in January, which allowed us to pay down debt and strengthen our cash position.
“We remain confident that Virgin Atlantic will emerge a sustainably profitable airline and would like to thank our creditors and shareholders, Virgin Group and Delta, for their ongoing support and unwavering belief in our future.”
Like the rest of the aviation industry, Virgin Atlantic has been forced to ground large parts of its fleet as the disruption caused by the pandemic drags into a second year.
The carrier secured a £1.2 billion private sector rescue package last summer including £200 million of cash from Virgin Group and £170 million of debt funding from US hedge fund Davidson Kempner Capital Management.