Richard Branson’s Virgin Atlantic secures £1.2billion rescue deal saving thousands of jobs

VIRGIN Atlantic has secured a £1.2billion rescue deal saving thousands of jobs.

The airline, which is owned by Sir Richard Branson, confirmed the rescue package, which includes a £170million cash injection from US hedge fund Davidson Kempner.

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But not all jobs will be saved. Under the refinancing deal, Virgin Group will have to cut £280million per year.

At the start of the pandemic, the airline employed 10,000 workers in the UK.

A third of these jobs - around 3,150 - were put at risk under restructuring plans announced back in May when it said it would be ceasing all flights from London's Gatwick Airport.

The rescue deal doesn't mean these job cuts will be stopped, but it does help thousands more workers who would have faced redundancy if the airline had gone under.

In total, the rescue package is worth £1.2billion over the next 18months, and means Sir Richard Branson maintains a controlling stake in the businesses.

Shai Weiss, CEO, Virgin Atlantic said: “Few could have predicted the scale of the Covid-19 crisis we have witnessed and undoubtedly, the last six months have been the toughest we have faced in our 36-year history. 

"We have taken painful measures, but we have accomplished what many thought impossible. 

"We greatly appreciate the support of our shareholders, creditors and new private investors and together, we will ensure that Virgin Atlantic can emerge a sustainably profitable airline, with a healthy balance sheet."

It pulls Virgin Atlantic from the brink of administration as a result of the coronavirus crisis.

The billionaire boss warned that the airline would go bust if it didn't get a government bailout, thought to be around £500million, back in April.

But Richard Branson - who is estimated to be worth £3.5billion - turned to private investors to stop it from going under after plans to use taxpayer money were slammed.

Ryanair boss Michael O'Leary said at the time that Branson - worth an estimated £3.8 billion - should "bail himself out" while a 

It follows the fall of Virgin Australia into administration after being refused a bailout from the Australian government.

Government travel bans have caused devastating blows to the industry, leaving airlines to repay millions of pounds to customers for cancelled flights.

Before lockdown, Flybe announced that it will cease trading with immediate effect.

Since then, British Airways has axed 12,000 jobs, while 4,500 jobs are at risk at easyJet under plans to close its Stansted, Southend and Newcastle hubs.

Ryanair has also said it is cutting 3,000 roles.