Delta Airlines, which holds a 49 per cent stake in Virgin Atlantic, has firmly rejected the idea of providing a cash injection to get the struggling airline through its current crisis.
The British airline has been soliciting the UK government for more assistance to get the business through the COVID-19 epidemic, but the Delta rejection comes as another blow to its prospects into the future.
Delta has stated it is concentrating on its own problems after operations were hammered by the coronavirus pandemic.
Delta boss Ed Bastian warned his company is facing “crisis in cash”, adding it is barred from investing in foreign businesses under the terms of a rescue by the American authorities.
Speaking to CNBC, he said, “We need to protect our own business. That’s where our focus is. I trust Virgin will work through its challenges with the government. If they are required to go through an administration process in the UK, I’m confident they could re-emerge.”
Before this statement by Delta, Sir Richard Branson, who owns 51 per cent of Virgin Atlantic, had offered his private island located in the British Virgin Islands as loan collateral to help sweeten the chance of extra government assistance in the UK.
Internationally, Virgin is also facing woes abroad as Virgin Australia collapsed into voluntary administration on Tuesday.
According to The Telegraph, a Virgin Atlantic spokesman said, “Because of significant costs to our business caused by unprecedented market conditions which the COVID-19 crisis has brought with it, we are exploring all available options to obtain additional external funding.
“We continue to take decisive action to reduce our costs, preserve cash and protect jobs. Discussions with a number of stakeholders continue and are constructive, meanwhile the airline remains in a stable position.
“Virgin Atlantic is committed to continuing to provide essential connectivity on competitive terms to consumers and businesses in Britain and beyond, once we emerge from this crisis.”
