After Virgin Atlantic warned that it might run out of money in September and collapse, its fortunes were reversed as creditors approved a proposed rescue plan.
The plan, worth up to £1.2 billion ($1.6 billion), will secure Virgin Atlantic’s future for at least 18 months and save 6,500 jobs at the airline.
“Achieving this milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies as soon as they are ready to travel,” stated a Virgin Atlantic spokesperson, reported Reuters.
Virgin Atlantic has two more hurdles to clear, as London’s High Court will have to approve the plan. In addition, a second hearing will be held in the United States, where the airline filed for Chapter 15 bankruptcy in August 2020.
“We remain confident that the plan represents the best possible outcome for Virgin Atlantic and all its creditors and believe that the court will exercise its power to sanction the restructuring plan,” added the spokesperson.
The plan aims to cut costs as much as £280 million ($369 million), as it has retired older and less efficient aircraft, including seven Boeing 747s. The carrier also withdrew from London-Gatwick, closed its base there and is now focusing on providing services from London Heathrow Airport (LHR) and Manchester Airport (MAN). However, the company has retained its slots at the airport to “protect opportunities for future growth.”