Virgin Atlantic has declined to comment on speculation that plans are being considered for a new £400 million funding round as prospects fade for an initial public offering (IPO).
The carrier was reported by Sky News to be in talks with its shareholders and other financial stakeholders about raising additional capital to see it through the traditionally quieter winter period.
City sources were cited as suggesting the amount being sought was still being finalised, but would involve founder Sir Richard Branson contributing.
It is expected to be announced by the end of the year.
The head of the Virgin Group last week sold $300 million of stock in New York-listed Virgin Galactic – bringing the total raised from selling shares in the space venture during the pandemic to more than $1 billion.
A Virgin Group spokesperson said that the latest sale would allow Sir Richard to support his “portfolio of global leisure, holiday and travel businesses that continue to be affected by the impact of the Covid-19 pandemic, in addition to supporting the development and growth of new and existing businesses”.
Virgin Atlantic has been helped by the recent resumption of flights between the UK and US – the most profitable part of its business – but is braced for a difficult winter amid oil price volatility and other inflationary pressures.
The airline lost more than £650 million last year as the Covid-19 crisis hit the global aviation industry, and is expected to have made a further substantial loss in 2021.
It was revealed in August that Sir Richard was plotting a listing on the London Stock Exchange as it pinned its hopes on a glut of demand for transatlantic travel.
However, despite positive talks with institutional investors, the need to return to normalised trading patterns has prompted the plan to be shelved indefinitely, according to the Sky News report on Saturday.
A significant improvement in the airline’s financial performance could yet pave the way for it to be revived, although that is unlikely for at least a year, according to one fund manager who held discussions with the company.
Virgin Atlantic has sought several rounds of funding since the start of the pandemic, including a £1.2 billion in September last year, which included £200 million from Sir Richard, a loan from US hedge fund Davidson Kempner Capital Management and contributions from creditors.
It has also landed hundreds of millions of pounds more – in multiple instalments – from the sale of several Boeing 787 Dreamliners and a further loan from Virgin Group.
The latest financial injection would include payment deferrals and other creditor assistance as well as cash, according to a City source.
Delta Air Lines owns the remaining 49%, with the carrier having scrapped a deal in late 2019 that would have seen Air France-KLM acquiring a 31% shareholding from Sir Richard.
A Virgin Atlantic spokesperson said: “We won’t be commenting on the speculation.”