Virgin to seek bail-out as virus crisis leaves airlines grounded

VIRGIN ATLANTIC is poised to seek a bail-out from the government worth hundreds of millions of pounds in the coming days.

The Uk-based airline is looking for a package of commercial loans and guarantees, according to the Financial Times, as it battles the crisis hitting the aviation industry due to the coronavirus pandemic.

It comes after Sir Richard Branson, the billionaire founder of the company, offered to inject $250m (£200m) into his Virgin Group conglomerate, with the majority going to the airline.

Virgin Atlantic will be among the first airlines in the UK to ask for state aid since the Government said this week that it would only act as a “last resort” on a case-by-case basis.

Other carriers including easyjet, regional airlines such as Loganair and Eastern Airways, and Norwegian Air Shuttle are also reportedly mulling a decision to seek aid after the Government ruled out a broad bailout for the airline industry. Virgin led calls for state aid for airlines two weeks ago as travel bookings dropped almost to zero with the coronavirus pandemic leaving the majority of flights grounded.

Rishi Sunak, the Chancellor, said earlier this week that British airlines and airports would only be able to ask for a taxpayer bail-out once they have exhausted all other options, such as seeking cash from investors.

A Government spokesman said: “We are continuing to work closely with the sector and are willing to consider the situation of individual firms, so long as all other government schemes have been explored and all commercial options exhausted, including raising capital from existing investors.”