VIR­GIN AT­LANTIC SE­CURES £1.2bn RES­CUE PACK­AGE

Business Traveller - - UPFRONT -

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”.

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