Virgin Atlantic has filed for bankruptcy in the US as the global aviation industry feels the impact of the coronavirus pandemic.
The UK-based airline is seeking protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country.
It is the second Virgin-branded airline to struggle this year. Virgin Australia went into administration in April.
Meanwhile, Virgin Australia’s new owner Bain Capital is set to cut 3,000 jobs.
Virgin Atlantic’s US bankruptcy court filing said it had negotiated a deal with stakeholders “for a consensual recapitalization” that will get debt off its balance sheet and “immediately position it for sustainable long-term growth”.
The move comes less than a month after the company said it had agreed a rescue deal worth £1.2bn ($1.6bn) to secure its future beyond the coronavirus crisis.
Under that plan Richard Branson’s Virgin Group injected £200m, with additional funds provided by investors and creditors.
The billionaire Virgin boss had a request for UK government money rejected, leaving the airline in a race against time to secure new investment.