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A key vote on Virgin Atlantic\u2019s \u00a31.2 billion rescue deal will be held on Tuesday.<\/p>\nA key vote on Virgin Atlantic\u2019s \u00a31.2 billion rescue deal will be held on Tuesday.<\/p>\n
Creditors will vote at a closed hearing at the High Court on whether to approve the restructuring package secured by the airline in July.<\/p>\n
The carrier warned earlier this month it could run out of money by the end of September if the bailout does not go ahead.<\/p>\n
It has been hit hard by the collapse in demand caused by the coronavirus pandemic.<\/p>\n
The rescue deal involves only private funds and includes a cash injection of \u00a3200 million from founder Sir Richard Branson\u2019s Virgin Group.<\/p>\n
Virgin Atlantic is seeking approval for the plan from creditors, who are being asked to accept 20% less than they are owed and for repayments to be rescheduled.<\/p>\n
The airline insists that without a \u201csolvent recapitalization\u201d its directors would have \u201cno choice\u201d but to place it into administration, which would \u201cresult in a poor outcome for the company\u2019s creditors\u201d.<\/p>\n
Virgin Atlantic has said it does not expect demand for air travel to return to pre-pandemic levels until 2023.<\/p>\n
In May it announced it would shrink its operations, including closing its Gatwick base and cutting 3,550 jobs.<\/p>\n