Matt Haycox Daily

News for Business Owners, By Business Owners!

Virgin Atlantic files for bankruptcy protection in the US

The pandemic claimed its latest corporate victim on Wednesday, with Virgin Atlantic filing for bankruptcy protection in the United States on Tuesday, even as the British-based airline tried to broker a rescue deal in the UK.  

The COVID-19 pandemic has hit many airlines hard since at least March, with many having to close routes, and leaving most struggling for survival. But Virgin has been one of the hardest hit. 

The Richard Branson-owned airline stopped flying in April, but announced that it was working on plans for a private funding deal worth 1.5 million pounds in July. The company hopes to emerge from the process in September, according to a company spokesperson. 

Virgin Atlantic sought Chapter 15 bankruptcy in New York on Tuesday, according to a court filing, which would allow the company to protect its US assets as a foreign debtor while working on the UK rescue plan. 

Also on Tuesday, Virgin Atlantic was given approval in court proceedings in the UK to meet with creditors to vote on the rescue plan. 

The plan will entail cutting annual costs by 280 million pounds, while slaying off 3,000 employees. 

Meanwhile, Virgin Australia, another member of the Virgin Group, went into voluntary administration in April before being bought out by a US equity firm. 

There was more bad news in Australia on Wednesday, when Virgin announced the closure of its budget subsidiary Tigerair Australia and the cutting of 3,000 jobs, as it prepared to be relaunched by new owners. 

Earlier this year Branson approached the British government for financial help, even offering to put up his Necker Island resort in the British Virgin Islands as collateral for a loan. But the request was denied. 

Share:

Facebook
Twitter
Pinterest
LinkedIn

Related Posts