Virgin Atlantic appears to have done what many deemed impossible for the airline, securing £1.2 billion in private funding to ensure future flying. At its worst, Virgin Atlantic’s flying schedule was down 98% during the pandemic, with many wondering if the airline could, or ever would fly again.
Now, it absolutely will, against all odds, including a failed effort from UK government to create meaningful support for airlines and the broader travel industry, while the rest of Europe, Asia, The United States and beyond dumped billions upon billions in. Here’s a look at the new financing, and when you’ll see a Virgin Atlantic plane headed your way…
Virgin Atlantic will receive £1.2 billion in privately arranged funding over the next 18 months, as agreements have been reached with past creditors, new investors and airline partners, and perhaps most vitally, a new £200 million investment from the Virgin Group.
On the news, Virgin Atlantic CEO Shai Weiss proclaimed “While we must not underestimate the challenges ahead and the need to continuously respond to this crisis, I know that now, more than ever before, our people are what sets us apart. I have been humbled by their support and unwavering solidarity throughout. The pursuit of our vision continues and that is down to each one of them.”
And yes, you care because your Virgin Atlantic Flying Club miles can now pretty much be deemed safe, at least for a good while.
Richard Branson launched Virgin Atlantic the same year of the birth of his daughter and has often been quoted as seeing the airline as one of his babies, unwilling to give up on it at any cost.
Now, the airline has released the details of the new financing package, which comes in addition to £280 million in annual cost savings, produced by condensing down to one London base at Heathrow, and making difficult layoffs early on to steady the ship.
- Shareholders are providing c.£600m in support over the life of The Plan including a £200m investment from Virgin Group, and the deferral of c.£400m of shareholder deferrals and waivers
- Davidson Kempner Capital Management LP, a global institutional investment management firm is providing £170m of secured financing
- Creditors will support the airline with over £450m of deferrals
- The airline continues to have the support of credit card acquirers (Merchant Service Providers) Lloyd’s Cardnet and First Data.
Reports suggest Virgin Atlantic was able to reach a reasonable agreement with credit card payment providers, who were hoping to hold onto all incoming Virgin Atlantic customer bookings for an extended period, as well as defer aircraft orders to the tune of £880 million.
Virgin Atlantic was already on the edge of operating the youngest fleet in the sky, and with the retirement of the Boeing 747 and Airbus A330-200 fleet, it’ll be even closer. Virgin Atlantic is currently flying a mix of Boeing 787 Dreamliner and Airbus A350-1000 aircraft, with plans to take additional A350’s and also Airbus A330-900neo aircraft in the next few years.
By 2022, the airline promises to fly the same number of routes as it did in pre-covid times, which if true will be a remarkable feat.
Virgin Atlantic will resume flights from next week, and already laid out a clear cut map of when and where it’ll fly this year and into next, starting with Hong Kong, Los Angeles and New York. Virgin Atlantic was one of the first airlines to introduce care packages for all passengers, including three medical grade masks, hand sanitizer and disinfecting wipes.
With the positive financing news, passengers will now actually get to use them.