Virgin Atlantic ‘told to re-submit’ £500m state aid bid

Virgin Atlantic has been told to re-submit a bid for a £500 million state coronavirus bailout package.

The government was left unimpressed with an initial funding bid, the Financial Times reported (subscription needed).

The airline had not done enough to show it had explored other options to bolster cash before asking for state aid, according to the newspaper which cited one person familiar with the matter.

Virgin Atlantic, which is is 51% owned by Sir Richard Branson’s Virgin Group and 49% by Delta Air Lines, last month requested emergency financial help in addition to the coronavirus package made available to all British companies.

Virgin Atlantic has not commented on the report.

Travel Weekly reported on Wednesday that senior figures at the airline were hopeful ministers would make a decision shortly on their appeal for state aid.

Virgin Atlantic is seeking a £500 million bailout, split between a commercial loan and a credit guarantee to release funds from card companies withholding payments.

The carrier has been in talks on a government cash injection since the beginning of April.

Manchester Airport Group (MAG), Heathrow, Airbus and Rolls Royce have all lobbied the government in recent days to bail out Virgin Atlantic, which needs a loan to cover fixed costs of about £20 million a week while flights are grounded as well as a credit guarantee.