Virgin Atlantic is Branson’s second airline to file for bankruptcy

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Virgin Atlantic became the second airline of billionaire Richard Branson to file for bankruptcy this year as the industry continues to be ravaged by the coronavirus pandemic.

The Virgin Group airline filed on Tuesday for Chapter 15 bankruptcy protection in the Southern District of New York, just hours after the company told a London court it would be forced to go. withdraw if a bailout deal is not reached next month.

This marks another blow for Branson’s brand Virgin, coming just months after sister airline Virgin Australia requested voluntary administration in April.

Airlines have been among the hardest hit by the pandemic, as borders were closed and travel bans were issued when countries closed earlier this year.

Virgin Atlantic became billionaire Richard Branson’s second airline to file for bankruptcy this year as the industry continues to be ravaged by the coronavirus pandemic

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

The airline flew its planes into the skies again in July but, as travel restrictions continue and consumer confidence is low, it has failed to draw crowds.

“The ongoing COVID-19 pandemic has had a negative impact not only on [Virgin Atlantic], but the aviation industry as a whole, causing the virtual shutdown of the global passenger aviation industry, ”the company’s lawyers wrote in their Tuesday filing.

‘While [Virgin Atlantic] has taken various measures to manage its liquidity in view of the unprecedented financial and operational conditions it faces, a more complete recapitalization is needed to secure the future of its business and ensure that it is able to cope with its commitments and its financing needs beyond mid-September 2020. ”

Chapter 15 is a form of bankruptcy for companies that span multiple countries, allowing foreign companies to file for bankruptcy in US courts.

The filing means that the airline is not yet in liquidation or bankruptcy.

Richard Branson said he would sell his private island to save his ailing travel agency

Richard Branson said he would sell his private island to save his ailing travel agency

The Virgin Group airline filed on Tuesday for Chapter 15 bankruptcy protection in the Southern District of New York, just hours after the company told a London court it would be forced to go. withdraw if a bailout deal is not reached next month.

The Virgin Group airline filed on Tuesday for Chapter 15 bankruptcy protection in the Southern District of New York, just hours after the company told a London court it would be forced to go. withdraw if a bailout deal is not reached next month.

However, it is the latest in a series of disastrous warnings for the airline.

At a London court hearing earlier Tuesday, Virgin Atlantic said it would be cash-strapped as early as September unless a bailout deal was quickly approved.

The company is seeking a $ 1.6 billion bailout and has said that without it, available cash will plummet and be forced to fall back.

The restructuring plan was announced last month but, despite the support of most stakeholders, it has not yet been finalized.

This would allow Branson, who has been criticized for asking the UK government for a bailout, to retain his 51% stake in the company.

Branson also said he would sell his private island to save the struggling business.

A UK judge has given the company the green light to call four creditors meetings on August 25 to vote on the restructuring plan.

Virgin Atlantic's check-in area is seen empty at London's Heathrow Airport in April as the coronavirus pandemic ravaged the airline industry

Virgin Atlantic’s check-in area is seen empty at London’s Heathrow Airport in April as the coronavirus pandemic ravaged the airline industry

“With the support already obtained from the majority of stakeholders, it is expected that the restructuring and recapitalization plan will come into effect in September,” said a spokeswoman for Virgin Atlantic.

“We remain confident in the plan. “

This comes from various efforts to save the struggling business.

In May, the airline announced plans to cut 3,150 jobs.

According to Business Insider, Delta CEO Ed Bastian has already made it clear that Delta will not offer a cash injection to save Virgin Atlantic from bankruptcy.

Virgin Atlantic operates primarily from the UK and also has administrative offices in Atlanta, Georgia and New York.

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