Virgin Atlantic could go bankrupt if creditors do not approve a £1.2bn rescue deal, according to the BBC.

David Allison, Virgin Atlantic’s Legal Representative made this known to the BBC.

Virgin Lawyers says the airline is fundamentally sound but a restructuring and fresh injection of money is critical to securing its future.

As part of that process Virgin Atlantic is also seeking protection under chapter 15 of the US bankruptcy code because they need approval from creditors under a court-sanctioned process.

Like other airlines, Virgin Atlantic's finances have been hit hard by the collapse in air travel due to the pandemic.

Recall that Eons Intelligence reported on Tuesday, August 4th, 2020, that Air Peace sacked about 70 pilots and slashed the salaries of staff.

Last month, Virgin Atlantic company agreed a rescue deal worth £1.2bn ($1.6bn) to secure its future beyond the coronavirus crisis.

Passenger demand has also crashed to a level as a result of the Covid-19 pandemic, and the group is now undergoing a liquidity crisis.

The court in London heard that the airline's cash flow would drop to critical levels by the middle of next month and it would run out of money altogether by the week beginning of 28th September.

The International Air Transport Association warned in June that the slump will drive airline losses of more than $84bn (£64bn) this year.


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