Virgin Atlantic gets £400 million lifeline from Virgin Group and Delta Air Lines
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Virgin Atlantic has announced a £400 million investment from Virgin Group and Delta Air Lines, in a move which should hopefully allow the UK airline to survive the Omicron storm.
£204 million is being provided by Virgin Group with £196 million coming from Delta. All new aircraft deliveries are now fully funded up to mid 2024.
On the back of the new investment, Virgin Atlantic is forecasting a return to profitability in 2023. This is not totally unrealistic given that the airline has made huge reductions in its fleet and staff costs since the start of the pandemic, but clearly won’t be easy.
In total, Delta has just announced commitments of $1.2 billion across three airlines where it has a shareholding – Virgin Atlantic, Aeromexico and LATAM.
Delta was restricted from putting new money into Virgin Atlantic last year under the terms of the bailout it received from the US Government. Instead, it supported the first Virgin Atlantic recapitalisation by writing off historic and future payments due from the airline.
The shareholdings in Virgin Atlantic will remain unchanged. Virgin Group retains 51% and Delta Air Line remains at 49%.
Shai Weiss, CEO of Virgin Atlantic, said:
“Our story has been well documented during the pandemic. Together with our people, we have proven that we have what it takes to emerge a stronger airline. Throughout, our shareholders Virgin Group and Delta Air Lines, and our creditors, have been a source of unwavering support. As our customers look to travel again to reconnect with their families, loved ones and business colleagues around the world, we look forward to working together towards our vision of becoming the most loved travel company and becoming sustainably profitable, serving our customers with Virgin flair for the next 37 years and beyond.”
Josh Bayliss, CEO of the Virgin Group, said:
“Since 1984, Virgin Atlantic has been a cornerstone of the Virgin brand, flying millions of customers and providing essential competition. We are extremely grateful to the Virgin Atlantic team for its incredible tenacity and commitment skilfully navigating the worst crisis ever to hit the travel industry. With the addition of new routes and a continuing focus on operating a cleaner, greener fleet, there is much to look forward to.”
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