Virgin Atlantic receives funding offers from private investors

Virgin Atlantic is still hoping to get financial aid from the UK government despite not qualifying for its corporate Covid fund
Virgin Atlantic, Richard branson

Virgin Atlantic has once again asked for a rescue deal from the UK government after the airline was offered millions of pounds of private funding, according to reports.

The pandemic-hit airline has received offers from multiple financial institutions and is waiting to hear whether the government will provide guarantees for a credit facility, according to sources cited by Bloomberg.

Unlike UK airline EasyJet, Virgin Atlantic does not qualify for the UK’s Covid Corporate Financing Facility, set up to support companies struggling because of the pandemic.

Virgin Atlantic was told it should first seek private funding before asking the government for financial aid. Founder Richard Branson has already pledged more cash for the carrier and has raised millions partly by selling shares in Virgin Galactic.

A spokeswoman for Virgin Atlantic told Bloomberg that it is exploring all external funding options.

“Constructive discussions with a number of stakeholders are progressing,” she said. “Meanwhile the airline remains in a stable position.”

The UK’s Department for Transport said it is working closely with the aviation sector and “willing to consider the situation of individual firms, so long as all other government schemes have been explored and all commercial options exhausted, including raising capital from existing investors”.

As a long-haul carrier, Virgin Atlantic is expected to take longer to recover and start flying profitably again compared to short-haul airlines.

The airline’s fleet remains grounded and some 3,000 jobs will be cut.

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