VIRGIN ATLANTIC SECURES £1.2bn RESCUE PACKAGE
VIRGIN ATLANTIC HAS AGREED a refinancing package which it says represents a “private-only solvent recapitalisation of the airline”. The deal – which requires shareholder approval – will see new funding of £170 million from Davidson Kempner Capital Management LP, as well as £200 million from parent company Virgin Group. In addition, the payment of £400 million to shareholders will be deferred, and creditors will further support the airline with another £450 million in deferred repayments.
In May, Virgin announced plans to axe more than 3,000 jobs and close its operations at Gatwick, but it intends to retain its slot portfolio at the airport “to protect opportunities for future growth”.
The onset of Covid-19 led to a 98 per cent drop in flying in the second quarter of this year, and capacity for the second half of 2020 was expected to be down 60 per cent on 2019, “with pre-crisis levels of flying unlikely to return until 2023”, the airline said.
By the first quarter of 2022, the carrier is expected to operate a streamlined fleet of 37 aircraft, following the retirement of seven B747s and four A330s, and the delivery of outstanding A350 and A330-900 orders has been “rescheduled”.