Sir Richard Branson’s airline, Virgin Atlantic, filed for Chapter 15 Bankruptcy on Tuesday in a New York court. The airline argued that if it was not offered this protection, it was at risk of running out of money as soon as next month.
Going Out of Business?
Chapter 15 Bankruptcy allows foreign debtors protection against U.S. based creditors. This filing does not mean that the airline is going out of business, but they wanted to ensure they would be okay as the pandemic continues to hit the airline industry hard.
“With support already secured from the majority of stakeholders, it’s expected that the restructuring plan and recapitalization will come into effect in September,” a spokeswoman for Virgin Atlantic said. “We remain confident in the plan.”
Who Owns What?
Virgin Atlantic is 51% owned by Branson, and the other 49% belongs to Delta. Since the pandemic, it has shut down its London Gatwick base and cut over 3,500 jobs— causing many of its planes to be grounded.
The airline also asked London courts to grant a $1.6 billion rescue package. While this bailout was announced in the UK in July, there have been no updates on if it will actually come.
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