Virgin Atlantic files for bankruptcy protection, warns it is running out of money

Virgin Atlantic files for bankruptcy protection, warns it is running out of money

Airlines have been devastated by Covid-19.

Virgin Atlantic perhaps one of the earliest to register the impact of the virus.

In April earlier this year, they reported it that Virgin’s founder, Richard Branson,

sought a government bailout of £500 million (S$867.4 million), but faced a backlash from the public and politicians.

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In July, they announced that they would cut over 3,000 jobs, calling the last six-months the toughest in their 36-year history.

Virgin has however raised US$1.25 billion in a rescue deal later on, which would hopefully secure the safety of over 6,000 jobs.

However that rescue deal is not guaranteed just yet.

According to BBC, this requires approval from “creditors under a court-sanctioned process”.

To facilitate this process, BBC reported on Aug. 5 that Virgin Atlantic is seeking protection under chapter 15 of the US bankruptcy code.

CNN reported that the filing came on the same day as a U.K. court hearing where Virgin Atlantic

received approval to call a meeting of creditors to vote on the restructuring plan.

Virgin Atlantic warns that if they don’t approve the deal, the airline could run out of

cash by next month, and would run out of money completely by end-September.

We do not expect global air travel to recover fully till 2024.

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