Coronavirus: Virgin Atlantic flies in face of downturn with €1.3bn rescue deal
Virgin Atlantic has announced a £1.2 billion (€1.3 bn) rescue package to help it weather coronavirus-related turbulence.
The airline called the deal “a major milestone towards securing its future”.
It involves £170m (€186m) of new investment and both Virgin Group and other creditors deferring millions of euros of money owed.
Virgin Atlantic has already announced it will cut more than 3,000 jobs in the UK and end its operations at Gatwick Airport in the face of the coronavirus-caused economic crisis.
“Few could have predicted the scale of the COVID-19 crisis we have witnessed and undoubtedly, the last six months have been the toughest we have faced in our 36-year history,” said Virgin Atlantic’s CEO, Shai Weiss. “We have taken painful measures, but we have accomplished what many thought impossible.”
The company is set to resume flights from London Heathrow to Orlando, Hong Kong, Shanghai, New York JFK and Los Angeles from July 20 and 21.
Aviation has been one of the hardest-hit sectors in the coronavirus pandemic.
Other carriers like RyanAir, EasyJet, Air France, British Airways and Lufthansa have already announced thousands of job cuts.
A study conducted by the New Economics Foundation estimated that up to 70,000 jobs could be lost in the UK aviation sector only.
“Aviation represents a core component of our national infrastructure […] Yet the sector is in a state of flux and likely faces a longer crisis period than most other sectors, in part because of a longer period of suppressed demand due to Covid-19 health measures”, the organisation said.
“A sectoral recovery plan must immediately be developed for aviation which covers a period of at least the next 5-7 years to manage the transition from lockdown to a new normal.”