This archive report was first published on 6 August 2020.
On August 6, 2020, Virgin Atlantic, a London-based airline, filed for Chapter 15 bankruptcy protection in the US, seeking to shield its assets from creditors as it navigates a rescue plan.
The airline, which is 49% owned by Delta Air Lines, has been struggling to stay afloat since the COVID-19 pandemic triggered a massive decline in travel demand. In April, Virgin Atlantic suspended all passenger operations, and it didn't resume flights until July.
Despite securing a £1.2 billion rescue package in July, which included £200 million from Sir Richard Branson's Virgin Group and £170 million from US hedge fund Davidson Kempner Capital Management, the airline's financial situation remains precarious.
According to a report by Bloomberg, Virgin Atlantic told a London court that it could run out of money in September if a restructuring deal is not approved. The airline's reservations are down 89% from a year ago, and current demand for the second half of 2020 is at approximately 25% of 2019 levels.
Virgin Atlantic's decision to file for Chapter 15 bankruptcy protection is the latest in a series of financial struggles faced by the airline industry. Three of Latin America's biggest airlines – Latam Airlines Group SA, Avianca Holdings SA, and Grupo Aeromexico SAB – are also reorganizing in bankruptcy court in New York.
