Virgin Atlantic Airways has announced £400m new investment from shareholders, Virgin Group and Delta Air Lines.
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The investment positions Virgin Atlantic to emerge from the COVID-19 pandemic in a strong financial position and with a bolstered balance sheet, ready to capitalise on market opportunities as demand returns.
The airline anticipates a return to sustainable profitability from 2023, driven by a recovery in air travel demand and more than £300m of cost savings, already delivered.
Key Highlights:
• £400m new investment from Virgin Group (51%) and Delta Air Lines (49%)
• Creditors continue to support the airline with £200m reduction in cash burden through 2024
• The airline continues to have the full support of credit card acquirers (Merchant Service Providers)
• The airline to have fully financed new aircraft deliveries through Q2 2024, on track to reach a 100% next generation, fuel efficient fleet in early 2027, reinforcing its commitment to sustainable air travel
• New investment to bolster Virgin Atlantic’s balance sheet, enhancing liquidity and allowing the Company to pay down debt
• Virgin Atlantic is in a strong position to rapidly capitalise on opportunities as demand returns, and to withstand a further downturn in air travel
The £400m investment is split £204m Virgin Group, £196m Delta Air Lines and the ownership structure remains unchanged; Virgin Group owns 51% of Virgin Atlantic, while Delta Air lines owns the remaining 49% share.
Since the pandemic impacted, the airline has successfully completed a £1.5bn recapitalisation:
•- A £1.2bn privately funded, solvent recapitalisation on 4 September 2020, enabling it to bolster its balance sheet. This included a £200m investment from founder Richard Branson; reduced five-year fleet capex spend by £880m and delivered more than £300m in cost savings including, sadly, a 45% reduction in the size of its workforce.
• A further c. £300m of financing in Q1 2021, including a financing of two Boeing 787s. ■