Life Travel Virgin Atlantic files for US bankruptcy protection
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Virgin Atlantic files for US bankruptcy protection

Virgin Atlantic, the airline founded by Richard Branson, has plans for a restructure. Photo: AP
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Virgin Atlantic has filed for protection in a US bankruptcy court as it tries to ride out the coronavirus pandemic hammering the airline industry.

The airline, which was founded by British businessman Richard Branson, made the filing in federal bankruptcy court in New York on Tuesday (local time) after a proceeding in the United Kingdom.

A spokeswoman for Virgin Atlantic cast the Chapter 15 bankruptcy filing as part of a court process to carry out a restructuring plan the airline announced last month.

The process is supported by a majority of the airline’s creditors and the company hopes to emerge from the process in September, she said.

The move comes after the airline announced a bail-out deal three weeks ago from private sources including Mr Branson to shore up its battered finances.

 

 

Virgin Atlantic’s decision follows bankruptcy filings in the US by Latin America’s two biggest airlines, Latam and Avianca, and by Mexico’s Aeromexico since the start of the pandemic.

Virgin’s sister airline Virgin Australia filed for protection from creditors in April.

Mr Branson retains a 10 per cent stake in Virgin Australia, which announced on Wednesday that about 3000 jobs would disappear in a trimmed-down vision of the carrier under new owners.

Airlines have been slammed by the coronavirus outbreak that has led to travel restrictions and left many people afraid to fly.

The International Air Transport Association, a trade group for global airlines, estimates the industry will lose $US84 billion ($A118 billion) this year and revenue will drop by half from 2019 levels.

Mr Branson had appealed to the British government for financial help.

-with agencies