LONDON (CU)_Since the beginning of the COVID-19 pandemic early last year, some of the major players in the airline industry, including Virgin Atlantic, have been severely affected by the international border closures and lockdown restrictions brought about by the global health crisis. In April, the British airline reported a pre-tax loss of £659 million for 2020, after its passenger numbers declined by a staggering 80 per cent. The situation meant that the group was forced to slash its costs, having to shed as much as 41 per cent of its workforce.
This was despite the £1.2 billion rescue deal announced in July last year, to keep the business afloat after months without scheduled flights. On the other hand, the airline’s founder, the billionaire Sir Richard Branson, raised £200 million by selling off a stake in the Group’s space division Virgin Galactic, with hopes to return to profit in 2022. Yet, these efforts have proven to be insufficient, and therefore, the British airline is now attempting to shore up its balance sheet by raising funds on the London Stock Exchange.
Currently, Branson’s Virgin Group owns 51 per cent of the firm, while the rest is owned by US-based Delta Air Lines. Therefore, the listing, which will be announced in autumn, may see the business magnate relinquish overall control of the business. However, some experts claim that the move might prove a tricky gambit, as international travel restrictions which are still in place in many countries, has prompted concerns among investors who wonder how long it will take the industry to recover. This situation has resulted in the share prices of airlines such as IAG and easyJet remain significantly lower in the comparison to pre-pandemic levels.
Nevertheless, according to Sky News, Citi, Barclays and other advisers of Virgin Atlantic’s have been approaching several major investors and have received a positive response.
