Virgin Atlantic has filed for bankruptcy as the airline industry continues to be devastated by the coronavirus pandemic.
THE Virgin Group airline filed for Chapter 15 bankruptcy protection in the Southern District of New York on Tuesday. It comes just hours after a court in London heard Virgin Atlantic could run out of money by the end of September if creditors do not approve a £1.2 billion bailout package.
It also comes just months after its sister airline Virgin Australia filed for voluntary administration in April.
Virgin Atlantic’s filing in US bankruptcy court in the southern district of New York said it has negotiated a deal with stakeholders “for a consensual recapitalisation” that will get debt off its balance sheet and “immediately position it for sustainable long-term growth.”
A Virgin Atlantic spokeswoman said the restructuring plan was before a British court “to secure approval from all relevant creditors before implementation.” The airline has over 10,000 UK staff and operates from Gatwick, Heathrow and Manchester.
The US filing seeks protection from creditors in the United States under Chapter 15 of the US Bankruptcy Code, which allows a foreign debtor to shield assets in the UK.