A £200 million cash injection is to be pumped into Virgin Atlantic by founder Sir Richard Branson to help the airline survive the Covid-19 travel downturn.
The investment is part of a reported £1 billion rescue package to pull back the iconic long-haul carrier from the brink of bankruptcy.
Sir Richard’s Virgin Group has committed the £200 million following the $500 million sale of shares in his space venture Virgin Galactic in May.
Delta Air Lines, the 49% co-owner of Virgin Atlantic, is reported by the Financial Times to be ready to put up £400 million.
The commitment from the US carrier is likely to be in the form of deferred payments such as brand fees and shared IT and back-office platforms.
A further sum of up to £250 million could come from outside investors, led by Wall Street hedge fund Davidson Kempner Capital Management, according to a Bloomberg report.
The firm has reportedly emerged as the favoured funding provider, ahead of an alliance between Elliott Management and investment firm Greybull Capital, the former owner of Monarch.
An additional £200 million has been agreed in the form of relief from some of Virgin’s suppliers such as aircraft manufacturer Airbus.
Virgin Atlantic has already slashed costs by cutting 3,150 jobs and shifting operations from Gatwick to Heathrow after being denied a government bailout.
An airline spokesperson said: “Virgin Atlantic has been working on a comprehensive, solvent recapitalisation of the airline to ensure that we can continue to provide essential connectivity and competition to consumers and businesses in Britain and beyond.”
Negotiations are progressing.
The airline plans to resume flying from July 20 from Heathrow to Hong Kong and adding New York and Los Angeles a day later. A further 17 routes are due to restart from August 1.
However, Virgin Atlantic said the resumption of services would depend on travel restrictions being lifted around the world.
Commenting on speculation that cuts have made crewing problematic, a spokesperson told The Times: “Due to the impact of the Covid-19 our current flying programme is dynamic and requires flexibility in our crewing.
“We have ample crew to cover our flights and we’re grateful to them for fully supporting our operations.”