Virgin Atlantic filed for Chapter 15 bankruptcy protection
in the Southern District of New York on Tuesday.
The carrier is seeking approval for a £1.2 billion
recapitalisation deal, but the carrier on Tuesday said it would effectively run
out of cash next month if that package is not approved. Virgin Atlantic has
creditor meetings later this month and, if creditors approve, it will have to
get the plan approved at a hearing on 2 September, according to Bloomberg.
Chapter 15 is a bankruptcy filing specific for cases
involving businesses with assets in multiple countries.
Virgin Atlantic has struggled to raise extra cash to help it
survive the coronavirus pandemic. It began resuming flights last month but is
planning to reduce staffing numbers by more than 3,000 and temporarily cease
flying from London’s Gatwick airport to cut costs.
The airline joins Sir Richard Branson’s other carrier Virgin
Australia in filing for bankruptcy protection as a result of the pandemic,
though the latter has since entered into an agreement to be acquired by Bain
Capital.