Virgin won't resume flights soon if UK introduces quarantine

Tuesday 19th May 2020 15:30 EDT

Virgin Atlantic will not be able to resume passenger flights until August at the earliest if Britain introduces a 14-day quarantine for travellers, according to a source. The carrier is battling to stay afloat after grounding passenger flights amid the coronavirus pandemic and the source said it is trying for a private-only deal to secure its future, with around a dozen private equity and other firms expressing serious interest.

The introduction of a quarantine on travel into the UK would add further pressure on its finances. “If the quarantine is in place, the earliest is August. If there’s no quarantine, you could see, maybe, July,” the source said. British government ministers have said they plan a quarantine for most international travellers in the coming weeks, though they have provided few details.

Many airlines have warned that the quarantine policy will further hurt a sector which is already facing its biggest ever challenge, and there is increasing exasperation that as the government outlines its plan for lifting Britain’s lockdown, there is no clear plan for aviation.

Willie Walsh, the boss of British Airways owner IAG, said this week that the quarantine plans and comments from the government were hindering the prospect of any travel recovery. The quarantine policy would leave Virgin Atlantic unable to fill planes, the source said, meaning that a resumption of flights would burn cash at a point when the airline is trying to preserve it.

The British-based airline said last week that it would lay off almost a third of its workforce due to the slump in air travel caused by the pandemic. The source said the airline also planned to defer delivery of aircraft on order. Virgin Atlantic is seeking hundreds of millions of pounds in support from shareholders through working capital facilities and deferment or alleviation of payments that are due. It is also in discussion with creditors and the British government.

The source said that a dozen institutions had expressed serious private sector interest in a deal and they included investment firms Cerberus Capital Management, Centerbridge, Greybull, Apollo and Davidson Kempner. There airline is also examining the possibility of a public-private partnership for the airline, where the government provides 500 million pounds ($606 million) in guarantees but may not ever need to hand over any cash, the source said.

Founder Richard Branson, whose Virgin Group owns 51% of Virgin Atlantic alongside US airline Delta with 49%, said in April the airline will only survive the impact of Covid-19 if it gets government support.

Britain has said that airlines need to exhaust private avenues of investment before individual support for companies is considered, and that airlines can access government support schemes for businesses more generally.

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