Global Travel Media » Blog Archive A sign of a seriously struggling airline – Virgin Atlantic sells and leases back its two Dreamliners to raise cash | Global Travel Media

Home » Aviation »Headline News » Currently Reading:

[sam id="86" codes="true"]

A sign of a seriously struggling airline – Virgin Atlantic sells and leases back its two Dreamliners to raise cash

December 14, 2020 Aviation, Headline News No Comments

Reports from the UK say that Virgin Atlantic is raising up to £70 million by selling and leasing back its two Boeing 787 Dreamliners, with a deal made with the aircraft lessor Griffin Global Asset Management, in partnership with an organisation familiar to Australia due to its acquisitor of Virgin Australia, the private US investment firm Bain Capital.

The proceeds from the sale-and-leaseback could also be used to pay for some of the debt after the airline’s recapitalization completed in September 2020, with a Virgin Atlantic spokesperson saying, “This financing opportunity, regarding two of our 787s, allows us to pay down debt and improve our cash position going into 2021,” adding, “Passenger and cargo flying continued throughout November and following our Black Friday sale, we have seen encouraging demand for travel at Christmas, Easter and Summer next year.”

Virgin Atlantic, as an all-widebody airline, has been hit hard by closed borders and international flight restrictions, with around 3,000 jobs cut in the early stages of the pandemic and a further 1,150 in September 2020, with August 2020, the carrier concluded a rescue deal worth up to £1.2 billion with Richard Branson’s Virgin Group injecting £200 million, as well as £400 million of shareholder deferrals and waivers.

The company hopes that the deal will help to secure Virgin Atlantic’s future for at least 18 months and save 6,500 jobs at the airline, aiming to cut as much as £280 million in costs, as it has retired older aircraft, including seven Boeing 747s.

Since the beginning of the pandemic, as with a number of other airlines, for example Emirates, Virgin Atlantic says it has been encouraged by the results of its cargo division, with in November 2020, Virgin Atlantic Cargo launched a pharma service in preparation to distribute the COVID-19 vaccine throughout its network worldwide.

In a most recent development, Virgin Atlantic Cargo started cargo flights between the UK and Pakistan on December 7, 2020, with the flights supporting the growing trade volumes between exporters and importers in both countries.

Other struggling airlines have been downsizing to raise money and alleviate the balance sheet crisis, with classic down past scenario down under reportedly being related to the Ansett, which it is said had sold and leased back all its aircraft, apparently leaving no aircraft to be liquidate by the administrators to contribute to saving the business.

Recently, Norwegian Air Shuttle reached an agreement to sell two of its 787-9 Dreamliners to Italian leisure airline Neos Air in October 2020 and the British low-cost airline EasyJet also completed the sale and leaseback deals of its nine Airbus aircraft in October 2020.

A report by John Alwyn-Jones

Comment on this Article:


Huawei Christmas in July banner Sidebar







TravelManagers Tower 2 300x600px


Huawei Christmas in July banners Leader
%d bloggers like this:
%d bloggers like this: