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Virgin Atlantic files for Chapter 15 bankruptcy in US
UK based Virgin Atlantic filed for Chapter 15 bankruptcy protection in New York so it can protect assets from US creditors.
The airline suspended flights in April due to the coronavirus pandemic.
The long haul carrier has been hit especially hard by the ban on US travelers to Europe
Chapter 15 gives some protection to foreign based companies while undergoing bankruptcy or court supervised restructuring proceedings elsewhere.
Virgin, which is 49% owned by Delta Air Lines, said in the Chapter 15 filing it has agreement with stakeholders in the UK ‘for a consensual recapitalization’ that will ‘immediately position it for sustainable long-term growth.’
This includes £200 million from founder Richard Branson.
It is awaiting approvals from all creditors before implementing its company-wide restructuring plan.
Virgin said in the court filing that ticket sales are 89% down and demand for the remainder of the year is about 25% of pre-pandemic levels.
by Ray Montgomery, US editor
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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