Under the plan, existing shareholders will contribute £ 600 million ($ 750.6 million), including £ 200 million ($ 250 million) from Virgin Group, founded by billionaire Branson. The American hedge fund Davidson Kempner is providing additional financing of £ 150 million ($ 188 million) and creditors have agreed to defer payments worth £ 450 million ($ 562.5 million).
“Few could have predicted the magnitude of the Covid-19 crisis we have witnessed, and certainly the past six months have been the most difficult we have faced in our 36-year history,” said Virgin Atlantic CEO Shai Weiss, in a statement. “We have taken painful steps, but we have accomplished what many thought was impossible,” he added. The company said it expects to be profitable again from 2022.
Virgin Atlantic, which has only been operating cargo flights since April, plans to restart passenger flights starting July 20. The company laid off 3,550 employees and closed its base at London Gatwick Airport, consolidating its operations at London Heathrow and Manchester Airport.
Global aviation has been devastated by the coronavirus pandemic, and airline industry losses are expected to exceed $ 84 billion this year, according to the International Air Transport Association. Air travel is not expected to recover to 2019 levels until at least 2023.
– Michelle Toh contributed to this article.
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