Virgin Atlantic seeks £160m injection in Covid survival fight

Airline founder Richard Branson set to contribute £100m in fresh financing package

Virgin Atlantic is set to raise £160m as part of a financing package to sustain the carrier ahead of the expected reopening of international travel in the coming months.

Richard Branson’s Virgin Group is putting up around £100m with another £60m coming from deferrals.

The carrier’s operations have been badly hit by the coronavirus pandemic and the resulting collapse of tourism and business travel.

It cut more than 3,000 jobs and shuttered operations at London Gatwick in 2020 after being denied state support by the UK government.

America's Delta Air Lines also declined to bail out the firm, despite owning a 49 per cent stake.

Pushed to the brink of survival, Virgin Atlantic completed a £1.2bn recapitalisation in September 2020, including £200m from Mr Branson who founded the company more than 30 years ago.

“We continue to bolster our balance sheet in anticipation of the lifting of international travel restrictions during the second quarter of 2021,” said a spokeswoman for Virgin Atlantic in an emailed statement.

“This latest £160m financing provides further resilience against a slower revenue recovery in 2021.”

Virgin Atlantic in January sold two Boeing 787 jetliners to fund the repayment of a $170m  loan from New York-based hedge fund Davidson Kempner Capital Management that formed the basis of its rescue last year.

The sale and leaseback deal raised $234 million, leaving the airline with £70m of its own funds.