Susan Haas
USA TODAY
Published 11: 21 PM EDT Aug 4, 2020
NEW YORK — Virgin Atlantic, the airline founded by British businessman Richard Branson, filed Tuesday for security in U.S. financial anguish court docket as it tries to survive the virus pandemic that is hammering the airline alternate.
The airline made the Chapter 15 filing in U.S. federal financial anguish court docket in Original York after a constant within the United Kingdom.
A spokeswoman for Virgin Atlantic said the financial anguish filing is phase of a court docket course of within the United Kingdom to full a restructuring realizing that the airline launched final month. The formulation is supported by a majority of the airline’s collectors, and the corporate hopes to emerge from the course of in September, she said.
A Virgin Atlantic attorney said in a court docket filing that the corporate wants an negate from a U.S. court docket to rating terms of the restructuring educate within the U.S.
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The airline is primarily a lengthy-haul operator, including flights between the U.K. and the U.S. It stopped flying in April attributable to the pandemic and ideal resumed flights in July. It closed a inappropriate at London’s Gatwick Airport and gash about 3,500 jobs.
Branson appealed to the British authorities for financial lend a hand earlier this year — even asserting that he would pledge his Caribbean island resort as collateral for a loan — however changed into rebuffed.
Final month, Virgin Atlantic launched that it had build apart together a deal to raise 1.2 billion kilos (nearly $1.6 billion at most stylish swap charges) from non-public sources, including 200 million kilos from Branson’s Virgin Community.
Atlanta-primarily based Delta Air Lines, which owns 49% of the airline, agreed to defer payments it changed into owed, and hedge fund Davidson Kempner agreed to lend Virgin Atlantic 170 million kilos. Virgin Atlantic also delayed deliveries of Airbus jets.
Virgin Atlantic’s court docket moves educate financial anguish filings within the U.S. by Latin The US’s two greatest airlines, Latam and Avianca, and by Mexico’s Aeromexico for the reason that inaugurate up of the pandemic. Virgin’s sister airline Virgin Australia filed for security from collectors in its home nation in April.
Airlines occupy been slammed by the coronavirus outbreak that has resulted in lag restrictions and left many contributors disquieted to hover. The Worldwide Air Transport Association, a alternate community for world airlines, estimates the alternate will lose $84 billion this year and earnings will tumble by half of from 2019 ranges.
