Virgin Atlantic files for bankruptcy as Covid continues to hurt airlines

Virgin Atlantic has declared itself bankrupt and is seeking protection from creditors in the US, according to a court filing in New York on Tuesday. The airline is seeking the protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country. The announcement comes little more than a month after Virgin Atlantic announced it had secured funding to survive for another 18 months. Virgin Atlantic flies only long-haul international routes and suspended flights in April due to the coronavirus pandemic. The bankruptcy is the second from a Virgin Group airline this year. Virgin Australia, the country’s second largest airline, went into administration in April, owing $6.8b to more than 12,000 creditors. Virgin Atlantic’s filing in the US bankruptcy court in the southern district of New York said it has negotiated a deal with stakeholders “for a consensual recapitalization” that will get debt off its balance sheet and “immediately position it for sustainable long-term growth”. On Tuesday the airline also filed a proceeding in the high court in London, where Virgin Atlantic obtained approval on Tuesday to convene meetings of affected creditors to vote on the plan on 25 August. A Virgin Atlantic spokeswoman said the restructuring plan was before the UK court “to secure approval from all relevant creditors before implementation”.<br/>