LONDON – Virgin Atlantic (VS) is in detailed talks with Cardnet, which is owned by the Lloyds Banking Group, and First Data, a subsidiary of American Fiserv.
The airline was hoping to persuade the two companies to release around £200m of funds to aid its working capital as part of a broader rescue deal.
Cardnet and First Data are understood to be the final pieces of the puzzle, securing an overall package that would provide substantial breathing space for VS to continue treading through the aviation industry crisis caused by the coronavirus pandemic.
At the moment, VS has yet to comment on the talks with the two merchant acquirers.
Virgin Atlantic Rescue Plan
Virgin Atlantic announced in April that it needed over £1bn to save the airline from bankruptcy. Sir Richard Branson had already added £200m in the airline in the form of capital injection, as other deals came following the agreement with airplane lessors to spread the rates and defer various fees.
Other adopted solutions to prevent the airline’s demise were the closing of its London Gatwick (LGW) base and the cutting of 3,150 jobs, a third of the company workforce, leaving operative its London Heathrow (LHR) and Manchester (MAN) bases.
Virgin Atlantic also decided to retire its Boeing 747 fleet in favor of the newest generation airplanes.
Virgin Atlantic Plans to Restart Operations
The airline has said it would aim to resume passenger flights on July 20 to destinations including Hong Kong, Los Angeles, and New York; although Delta (DL), which owns 49% of the British airline, has warned that the recovery of demand for international travel is likely to lag domestic US aviation by a year.
Virgin Atlantic is anticipating that customer demand will be at least 40% lower during 2020, with only a gradual recovery next year, reinforcing its desire to seek substantially more than its initial funding requirement of about £500m.
Virgin Atlantic Support to the UK during Coronavirus
Virgin Atlantic has been flying a large amount of its fleet, mostly Boeing 787-9 Dreamliners and Airbus A350-1000, since the UK lockdown began in March.
These flights have focused on cargo routes to support the need for Personal Protective Equipment (PPE) in the UK. The destinations were mainly in China and London Heathrow (LHR), adding later humanitarian flight support to the US.
Featured image: Virgin Atlantic Airbus A330-343 G-VSXY. Photo: ©Hiro Nishikura