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| Coronavirus: Crisis-hit Virgin Atlantic files for bankruptcy | |
| (about 3 hours later) | |
| Virgin Atlantic has filed for bankruptcy in the US as the global aviation industry feels the impact of the coronavirus pandemic. | Virgin Atlantic has filed for bankruptcy in the US as the global aviation industry feels the impact of the coronavirus pandemic. |
| The UK-based airline is seeking protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country. | The UK-based airline is seeking protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country. |
| It is the second Virgin-branded airline to struggle this year. Virgin Australia went into administration in April. | It is the second Virgin-branded airline to struggle this year. Virgin Australia went into administration in April. |
| Meanwhile, Virgin Australia's new owner Bain Capital is set to cut 3,000 jobs. | Meanwhile, Virgin Australia's new owner Bain Capital is set to cut 3,000 jobs. |
| Virgin Atlantic's US bankruptcy court filing said it had negotiated a deal with stakeholders "for a consensual recapitalization" that will get debt off its balance sheet and "immediately position it for sustainable long-term growth". | Virgin Atlantic's US bankruptcy court filing said it had negotiated a deal with stakeholders "for a consensual recapitalization" that will get debt off its balance sheet and "immediately position it for sustainable long-term growth". |
| The move comes less than a month after the company said it had agreed a rescue deal worth £1.2bn ($1.6bn) to secure its future beyond the coronavirus crisis. | The move comes less than a month after the company said it had agreed a rescue deal worth £1.2bn ($1.6bn) to secure its future beyond the coronavirus crisis. |
| Under that plan Richard Branson's Virgin Group injected £200m, with additional funds provided by investors and creditors. | Under that plan Richard Branson's Virgin Group injected £200m, with additional funds provided by investors and creditors. |
| The billionaire Virgin boss had a request for UK government money rejected, leaving the airline in a race against time to secure new investment. | The billionaire Virgin boss had a request for UK government money rejected, leaving the airline in a race against time to secure new investment. |
| The US filing is tied to a separate action filed in a British court, where Virgin Atlantic obtained approval on Tuesday to convene meetings of affected creditors to vote on the plan on 25 August. | The US filing is tied to a separate action filed in a British court, where Virgin Atlantic obtained approval on Tuesday to convene meetings of affected creditors to vote on the plan on 25 August. |
| In May, Virgin Atlantic, which is 51% owned by Virgin Group and 49% by US airline Delta, announced that it would cut more than 3,000 jobs in the UK and close its operation at Gatwick airport. | In May, Virgin Atlantic, which is 51% owned by Virgin Group and 49% by US airline Delta, announced that it would cut more than 3,000 jobs in the UK and close its operation at Gatwick airport. |
| Virgin Australia cuts | Virgin Australia cuts |
| Meanwhile, Virgin Australia's new owner, the US private equity group Bain Capital, said it will cut 3,000 jobs, which is about a third of the airline's employees. | Meanwhile, Virgin Australia's new owner, the US private equity group Bain Capital, said it will cut 3,000 jobs, which is about a third of the airline's employees. |
| The turnaround plan for Australia's second largest airline will also see it retire the budget brand Tigerair. | The turnaround plan for Australia's second largest airline will also see it retire the budget brand Tigerair. |
| "Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market," Virgin Australia's chief executive Paul Scurrah said. | "Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market," Virgin Australia's chief executive Paul Scurrah said. |
| In April, Virgin Australia went into voluntary administration, making it Australia's first big corporate casualty of the coronavirus pandemic. | In April, Virgin Australia went into voluntary administration, making it Australia's first big corporate casualty of the coronavirus pandemic. |
| The following month it was bought by Bain Capital, which said it supported the airline's current management team and its turnaround plan for the business. | The following month it was bought by Bain Capital, which said it supported the airline's current management team and its turnaround plan for the business. |
| Bain also promised a "significant injection of capital" that would help Virgin Australia recapitalise and retain thousands of jobs. | Bain also promised a "significant injection of capital" that would help Virgin Australia recapitalise and retain thousands of jobs. |
| Carriers around the world are struggling as they deal with the severe plunge in air travel caused by the coronavirus pandemic. | Carriers around the world are struggling as they deal with the severe plunge in air travel caused by the coronavirus pandemic. |
| The International Air Transport Association warned in June that the slump will drive airline losses of more than $84bn (£64bn) this year. | The International Air Transport Association warned in June that the slump will drive airline losses of more than $84bn (£64bn) this year. |