British billionaire Sir Richard Branson is set to inject over £100 million (US$139 million) into his struggling airline Virgin Atlantic, under a £160 million rescue plan to see the airline through the rest of the pandemic.
The UK-based airline announced the £160 million rescue deal, which consists of a £100 million cash injection from Branson-owned Virgin Group, which owns a 51 per cent stake in the carrier, as well as a further £60 million in deferred payments to the company’s creditors.
The airline says the deal will see it through the final waves of the pandemic, as it anticipates an imminent ramp-up in demand through the European summer months.
“We continue to bolster our balance sheet in anticipation of the lifting of international travel restrictions during the second quarter of 2021”, a spokeswoman for Virgin Atlantic said.
“This latest £160 million financing provides further resilience against a slower revenue recovery in 2021,” she said.
It follows an announcement made in January that Virgin Atlantic has completed a sale and leaseback agreement with Friggin Global Asset Management of two Boeing 787s, in order to free up cash and strengthen the airline’s balance sheet.
In September 2020, the airline secured a £1.2 billion rescue fund that was aimed to aid it through the remainder of the pandemic.
At the same time, the airline announced it was shedding 1,150 more jobs, bringing the total number of layoffs across the business to over 4,600 since the beginning of the pandemic.
The airline at that time said the cuts were “heartbreaking, but essential” to its ongoing survival.
“Until travel returns in greater numbers, survival is predicated on reducing costs further and continuing to preserve cash,” Virgin Atlantic said.
“The outlook for trans-Atlantic flying, which is core to Virgin Atlantic’s business, remains uncertain with US-UK travel curtailed.”
According to CEO Shai Weiss, the airline was able cut costs by £335 million by halving its workforce and reducing its fleet size.