Breaking news today as Virgin Atlantic has filed for Chapter 15 bankruptcy protection in the United States. The airline has made this step as it undergoes its own private restructuring plan in the UK.
Virgin Atlantic files for bankruptcy protection
Reuters reports that Virgin Atlantic filed under Chapter 15 of the US Bankruptcy Code in the southern district of New York on August 14th. Chapter 15 bankruptcy is for bankruptcy cases in which debtors, assets, and parties of interest are spread across multiple countries. Generally, the case is ancillary to proceedings in another country– in this case the United Kingdom.
The filing comes after the airline spent a few months operating no passenger operations. It was only on July 20th that Virgin Atlantic resumed passenger flights. Like many other airlines around the world, Virgin Atlantic suffered from the ongoing crisis.
Virgin Atlantic had strong exposure to the key segments of the industry that the crisis has severely impacted. First, the carrier only operates international widebody routes. These routes were hit by border closures and evaporating demand that severely impacted Virgin’s financial state.
Virgin Atlantic’s Tuesday
On Tuesday, August 4th, Virgin Atlantic told a London court that it was at risk of running out of cash next month unless its July rescue package is approved, according to a report in the Sydney Morning Herald.
Virgin Atlantic is owned 49% by Atlanta-based Delta Air Lines.
