Sir Richard Branson’s Virgin Group is ready to pour £100m of recent funding into Virgin Atlantic to assist the service survive till mass journey restarts because the Covid-19 pandemic abates.
The mortgage from Virgin Group, which owns 51 per cent of the airline, types a part of a £160m help package deal that’s near being finalised, Virgin Atlantic confirmed. The deal additionally consists of fee deferrals with the corporate’s collectors.
“We proceed to bolster our steadiness sheet in anticipation of the lifting of worldwide journey restrictions through the second quarter of 2021,” the airline stated. The £160m financing will present “additional resilience in opposition to a slower income restoration” this yr, it added.
Like the remainder of the trade, Virgin Atlantic has been compelled to floor massive elements of its fleet because the disruption attributable to the pandemic drags right into a second yr.
The airline’s enterprise mannequin relies on long-haul flying and specifically the profitable routes between the US and UK, which have been all however closed since March — leaving it desperately exposed through the disaster.
Branson raised eyebrows final yr when he requested for presidency help for his cash-strapped companies, and in contrast to rivals together with British Airways and easyJet, Virgin didn’t entry UK authorities funds on the top of the disaster after the federal government rebuffed an preliminary request for a bailout.
As a substitute the airline put together a £1.2bn personal sector rescue package deal final summer season together with £200m of money from Virgin Group and £170m of debt funding from US hedge fund Davidson Kempner Capital Administration.
That financing was primarily based on a forecast that folks would start to journey once more in vital numbers by this Easter, however the earliest the UK’s borders will open for non-essential journey is Could 17, whereas US borders are nonetheless closed to many passengers.
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The £160m in new financing, first reported by Sky Information, follows $230m raised in January by the sale and lease again of two Boeing 787 Dreamliner planes. The airline has additionally minimize £335m in prices for the reason that disaster started, together with 1000’s of jobs.
Even with leisure flying grounded, Virgin has managed to eke out income this yr from the heavy demand for cargo flights, together with sending its heavy jets on the brief hop between the UK and Brussels.
The airline can also be nonetheless working some passenger flights, and has reported strong demand from the south Asian diaspora within the UK travelling to see pals and family in India and Pakistan.