Virgin Atlantic secures GBP1.2b rescue package to keep flying

Virgin Atlantic has agreed a GBP1.2b rescue package aimed at securing the grounded airline for the next five years after months of negotiating with shareholders and private investors to stave off collapse. CE Shai Weiss said shortly after the deal was signed off on Tuesday that the rescue plan was a “major achievement” that most people “probably thought . . . impossible”. “We’re planning for forever,” said Weiss. “This is not a plan for another plan . . . our job has been to take a very severe look into 2021 specifically. We funded the plan for the worst case rather than best case as you would expect us to do.” The rescue package will inject about GBP1.2b into the airline over the next 18 months, with GBP200m of cash from Richard Branson’s Virgin Group and GBP170m of debt funding from US hedge fund Davidson Kempner Capital Management. It will include GBP400m of fee deferrals from shareholders, Virgin Group and Delta, which owns 49%, while creditors have agreed to postpone payments worth a further GBP450m. The carrier has also implemented a cost-saving programme that will involve 3,550 job cuts and secured agreement from its credit card companies to unlock customer cash. Weiss hoped the package would help the carrier return to profitability in 2022. “We must and will become a sustainably profitable enterprise,” he said. He admitted there were “challenges ahead”. But added: “We haven’t done this on a prayer and a hope. I think people can get comfortable with the fact that this has been reviewed by so many people. There was competition to lend us money.”<br/>