Virgin Atlantic Files for Bankruptcy as Covid Continues To Hurt Aviation Sector

Virgin Atlantic has filed for bankrupt protection from creditors in the US, according to a court filing in New York on Tuesday.
The airline is seeking the protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country. The announcement comes little more than a month after Virgin Atlantic announced it had secured funding to survive for another 18 months.
Virgin Atlantic flies only long-haul international routes and suspended flights in April due to the coronavirus pandemic.

Bloomberg reported Virgin Atlantic told the high court it could run out of money in September if a restructuring deal is not approved.
Non-US companies use chapter 15 to block creditors who want to file lawsuits or tie up assets in the US.
In July, the airline said its private deal with stakeholders eliminated the need for support from the British government that billionaire founder Richard Branson had sought. The reorganisation is expected to be completed towards the end of this summer and be spread across the next 18 months.
The airline, 51% owned by Branson’s Virgin Group and 49% by US airline Delta, closed its Gatwick base and cut more than 3,500 jobs to contend with the fallout from the Covid-19 pandemic, which has grounded planes and hammered demand for air travel.

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