Virgin Atlantic becomes billionaire Richard Branson’s second airline to file for bankruptcy

Virgin Atlantic has become billionaire Richard Branson’s second airline to file for bankruptcy this year as the industry continues to be ravaged by the coronavirus pandemic.

The Virgin Group airline filed for Chapter 15 bankruptcy protection in the Southern District of New York on Tuesday.   

This comes just months after sister airline Virgin Australia filed for voluntary administration in Australia back in April.   

Airlines have been some of the hardest hit among the global health crisis as borders shuttered and flights were banned when nations went into lockdown earlier this year. 

Virgin Atlantic, which is based in London and 49% owned by Delta Air Lines, was forced to ground all passenger operations in April.

The airline took its planes to the skies once more in July but, as travel restrictions continue and consumer confidence is low, it has failed to draw the crowds back in.   

Chapter 15 is a form of bankruptcy for companies that span multiple countries, providing a way for foreign companies to file for bankruptcy in the US court system. 

Under the filing, the airline is not yet going into liquidation or going out of business.   

However it marks the latest in a string of dire warnings for the airline, after Virgin Atlantic told a London court Tuesday it will run out of cash as soon as September unless a rescue deal is quickly approved. 

The company is seeking a $1.6 billion rescue package and has said that without it available cash will plummet and it will be forced to fold. 

Virgin Atlantic mainly operates in the UK and also has administrative offices in Atlanta, Georgia and New York.  

Delta CEO Ed Bastian has previously made it clear Delta will not offer a cash injection to save Virgin Atlantic from bankruptcy, according to Business Insider.