Virgin Atlantic Airways (Virgin Atlantic) has announced £400m new investment from shareholders, Virgin Group and Delta Air Lines. 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
Since the beginning of the crisis, Virgin Atlantic has taken decisive action to reduce costs, preserve cash and raise capital. With the full support of its shareholders and creditors, the airline is positioned for recovery from the pandemic, bolstered by the opening of US borders to UK nationals on 8 November, as it benefits from pent up customer demand and robust trading for Easter and Summer 2022.
Shai Weiss, CEO Virgin Atlantic, said: “Our story has been well documented during the pandemic. Together with our people, we have proven that we have what it takes to emerge a stronger airline. Throughout, our shareholders Virgin Group and Delta Air Lines, and our creditors, have been a source of unwavering support. As our customers look to travel again to reconnect with their families, loved ones and business colleagues around the world, we look forward to working together towards our vision of becoming the most loved travel company and becoming sustainably profitable, serving our customers with Virgin flair for the next 37 years and beyond.”
Ed Bastian, CEO, Delta Air Lines, said: “Virgin Atlantic’s business has transformed, allowing them to emerge from the pandemic a stronger airline. Their distinct and vibrant brand will be reconnecting and delighting its customers for years to come. Together, more customers will be able to take advantage of the many benefits our strategic partnership offers, including a route network serving more than 350 cities in North America, Europe and the UK.”
Josh Bayliss, CEO of the Virgin Group, said: “Since 1984, Virgin Atlantic has been a cornerstone of the Virgin brand, flying millions of customers and providing essential competition. We are extremely grateful to the Virgin Atlantic team for its incredible tenacity and commitment skilfully navigating the worst crisis ever to hit the travel industry. With the addition of new routes and a continuing focus on operating a cleaner, greener fleet, there is much to look forward to.”