British airline Virgin Atlantic has reportedly received a funding injection of £400 million ($530 million) from its founder, Sir Richard Branson, and co-owner, Delta Air Lines, Inc., to strengthen its finances, which have been severely battered by the COVID-19 pandemic.
News of the capital injection comes as Virgin Atlantic, among other UK carriers, seeks support from the government to weather the newly tightened travel restrictions, which are designed to curb the spread of the Omicron variant.
Sir Richard Branson-founded, Virgin Group, which currently owns a 51 percent stake in the airline, will be investing £204 million ($270 million), while Delta, which holds a 49 percent stake, will be investing £196 million ($260 million).
With the funding, Virgin Atlantic stated that it will be able to come out of the pandemic with a stronger financial position as well as a bolstered balance sheet, primed to capitalize on opportunities in the market once the demand returns.
Virgin Atlantic had to let go of almost half of its workforce to reduce costs during the pandemic, having recorded an £858 million ($1.13 billion) annual loss.
While some relief had been observed as flights between the UK and US resumed, the emergence of a new COVID-19 variant has led to new travel restrictions, including pre-departure testing for UK arrivals to control the spread, delaying the airline’s revival.
Virgin Atlantic had previously sought several funding rounds since the beginning of the pandemic, with the most notable having been the £1.2 billion ($1.6 billion) solvent rescue package it had secured in September last year. Sir Richard had also injected £200 million ($264 million) in the package, alongside other creditors including Davidson Kempner Capital Management, an American hedge fund.
The airline also managed land hundreds of millions of pounds, in installments, after selling several of its Dreamliner aircrafts as well as another loan from the Virgin Group.
Following the investment, Shai Weiss, CEO, Virgin Atlantic, stated that the airline has proven that it has what it takes to emerge as a stronger airline and that its shareholders Delta and Virgin Group, along with its creditors, have provided unwavering support throughout.