Delta and Virgin Group have pledged funds to help Virgin Atlantic emerge from the pandemic. Virgin Group owns 51% of Virgin Atlantic and Delta the remainder. Neither specified how much of the £400 million they were contributing.
In another boost, Virgin said it had obtained “full support” of credit card acquirers which process payments.
Virgin said: “With the full support of its shareholders and creditors, the airline is positioned for recovery from the pandemic, bolstered by the opening of US borders to UK nationals on 8 November, as it benefits from pent up customer demand and robust trading for Easter and summer 2022.”
Shai Weiss, Virgin Atlantic chief executive, said: “Our story has been well documented during the pandemic. Together with our people, we have proven that we have what it takes to emerge a stronger airline.
"Throughout, our shareholders Virgin Group and Delta Air Lines, and our creditors, have been a source of unwavering support.”
Delta has held a 49% stake in Virgin since 2012, when it bought the minority shareholding from Singapore Airlines.
In an update to investors, Delta said: “Delta is investing in Virgin Atlantic, Aeromexico and Latam as each carrier emerges from restructuring or recapitalization.
“Upon completion of their respective processes, Delta is targeting a 20% equity stake in Aeromexico and a 10% equity stake in Latam. In addition, Delta will maintain its 49% equity stake in Virgin Atlantic. The airline’s investment in these carriers will be approximately $1.2 billion.”
Delta cannot take more than a 49% stake in Virgin as ownership rules mean Virgin must stay a UK company to maintain its flying rights and its valuable Heathrow slots portfolio.
However, Delta’s investment solidifies its transatlantic joint venture with Virgin, which was struck in 2013. This includes co-operating on US routes from Heathrow.
Delta chief executive Ed Bastian said: “Virgin Atlantic’s business has transformed, allowing them to emerge from the pandemic a stronger airline. Their distinct and vibrant brand will be reconnecting and delighting its customers for years to come.
"Together, more customers will be able to take advantage of the many benefits our strategic partnership offers, including a route network serving more than 350 cities in North America, Europe and the UK.
“These strategic investments in our partners will transform our ability to improve the travel experience for our customers, enabling us to deliver a seamless travel experience alongside offering our customers an unrivalled network between North American and premier markets worldwide.”
