Virgin Atlantic close to securing rescue deal as COVID-19 slashes air travel demand

 Tailfins of parked Virgin Atlantic passenger aircraft are pictured. — AFP/Files

LONDON: Virgin Atlantic is “close” to securing a deal to recapitalise the struggling British airline as the coronavirus pandemic slashes demand for air travel, a source told AFP Wednesday.

The carrier, part owned by tycoon Richard Branson, is making “very good progress” in talks with private investors and is “close” to agreement, the source said.

Media reported that Virgin Atlantic is trying to secure a rescue deal worth up to £1.0 billion ($1.2 billion, 1.1 billion euros) to ensure its survival.

The news comes two months after Virgin Atlantic announced plans to axe more than 3,000 jobs, or one third of its staff, as COVID-19 continues to ground a large number of passenger jets.

A company spokesman added separately that it was seeking a “comprehensive” deal to keep going.

“Virgin Atlantic has been working on a comprehensive, solvent recapitalisation of the airline to ensure that we can continue to provide essential connectivity and competition to consumers and businesses in Britain and beyond,” the spokesman said in a statement.

“Since the very beginning of the COVID-19 crisis, we have made difficult decisions and taken decisive action to reduce our costs, preserve cash and protect as many jobs as possible.

“We greatly appreciate the support of our shareholders, creditors and private investors and by working together, we will ensure that Virgin Atlantic can emerge from the crisis a sustainably profitable airline, with a healthy balance sheet,” the statement added.

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