Virgin Atlantic has filed for Chapter 15 bankruptcy protection in the U.S. as the COVID-19 pandemic hammers the global airline industry.
Virgin Atlantic, an airline founded by British businessman Richard Branson, made the bankruptcy filing in U.S. federal bankruptcy court in New York City after a similar filing in the United Kingdom.
Several airlines have been pushed to similar outcomes by the pandemic. Latin America's two biggest airlines, LATAM and Avianca, have each filed for bankruptcy protection, as well as Mexico's Aeromexico. Virgin's sister airline, Virgin Australia, filed for protection from creditors in its home country in April.
The International Air Transport Association, a trade group for global airlines, estimates that the air travel industry will lose $84 billion U.S. this year, and that revenue will drop by half from 2019 levels.
Branson had appealed to the British government for financial help. Virgin Atlantic said last month that it raised $1.8 billion CDN from private sources, including Branson himself, to shore up its battered finances. Atlanta-based Delta Air Lines, which owns 49% of the airline, agreed to defer payments it was owed, and hedge fund Davidson Kempner agreed to lend Virgin Atlantic $128 million CDN.
Unfortunately, those efforts were not enough to keep Virgin Atlantic aloft.
