On Tuesday, Virgin Atlantic announced a rescue package worth €1.2 billion deal to survive the next 1.5 years corona slum and target to return with profits in the year 2022. Sir Richard Branson’s grounded passenger airline is in turmoil due to four-month without any scheduled flights.
The funding would be a combination of loans, investments, cash, and deferrals. Investors include Davidson Kempner hedge fund, which would inject €170 million in loans, and Branson, which will provide €200M. Branson has sold some of his shares in the Virgin Galactic to provide funding.
The investors will not get any shares in the company but collateral. The shares of the Virgin Atlantic are owned 49% by US carrier Delta and 51% by Richard Branson.
Earlier, Branson requested the UK government for a bailout to his airline venture through state funding, but the administration rebuffed his appeal. Meanwhile, the other similar airlines such as British Airways and Jet got loans worth hundreds of millions to recover by the Bank of England.
The airline has remained only one-third as compared to pre-corona times. The company has already redundant many of its employees and is now operating with 6,500 staff. It is also planning to halt its operations at London Gatwick.
Interestingly, the company managed to get some revenue from about 1,400 cargo flights from April to June. The airlines even used passenger cabins to transport goods. Further, the company also took measures to save its expenditures which includes pushing back orders for new planes which saved around €880m and restructuring programme, which helped them reserve around €280m.