The application was filed a month after the company agreed to a $ 1.6 billion bailout deal • The company is currently in negotiations with shareholders to try to stabilize it
Virgin planes at the port of the phenomenon in Manchester, UK, June // Photo archive: AFP
The British airline Virgin Atlantic declared bankruptcy this morning (Wednesday), following the Corona crisis that hit many airlines around the world, which are suffering a severe blow as part of the tourism industry.
According to the company's bankruptcy petition, it is in negotiations with its shareholders regarding a "mutual investment" that will remove the company's debts from its balance sheet and that will "bring it immediately to long-term stabilization." The request was made less than a month after the company agreed to a rescue deal worth about $ 1.6 billion, designed to secure its future beyond the corona crisis.
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Under this plan, the owners of the Virgin Group, billionaire Sir Richard Branson, will transfer about $ 260 million to the airline, and additional funds will be transferred to it by investors and creditors. Branson's application for a grant from the UK government was rejected, forcing the company to find new avenues for receiving investors.
Virgin Atlantic announced in May that it would cut some 3,500 jobs in the UK alone and that it would no longer operate at London Gatwick Airport. However, the remaining 6,500 jobs in the company are not currently at risk.
Airlines around the world have been hit hard by the crisis, this is because many countries are instructing everyone who enters them to go into isolation, which has led to a dive in the number of flights around the world. According to the International Airlines Association, airlines will lose more than $ 84 billion due to the crisis.