Virgin Atlantic abandons plan for Government bailout, has five weeks to find a buyer (Telegraph)
Links on Head for Points may support the site by paying a commission. See here for all partner links.
The Sunday Telegraph reports that Sir Richard Branson has abandoned plans for a Government bailout of Virgin Atlantic and is now desperately seeking a trade buyer.
The airline will be put into administration at the end of May if this cannot be achieved. Accountancy firm EY is reportedly already lined up to act as administrator.
The airline is reported to have hired investment bank Houlihan Lokey, which specialises in distressed debt situations, to approach potential investors. 50 parties are believed to have asked for financial information.
Interestingly, none appear to be trade buyers. Names quoted included hedge fund Lansdowne Partners, Singapore’s sovereign wealth fund, US private equity group Centerbridge Partners and distressed debt investor Cerberus.
Potential bidders are expected to form consortia to submit bids. It is important to remember that a 51% shareholding must remain with UK or European Union entities under EU aviation law. Only Lansdowne Partners, of the names listed above, has a qualifying domicile.
Delta Air Lines, currently a 49% shareholder, has already said that it will not commit further funds to the airline as it deals with its own financial crisis. Delta is keener to take money out of Virgin Atlantic, with the airline currently owed $200m which was due as a transition payment to reflect the addition of Air France and KLM into the Delta / Virgin transatlantic joint venture.
Delta’s CEO Ed Bastian is quoted as telling MSNBC that it supported administration, believing that there would be bidders for the assets. Any solution is likely to see Delta’s shareholding wiped out, but this is unlikely to be a major problem as the real value for the airline is in the joint venture agreement. Virgin Group may be reduced to a minority stake unless there is an issue over hitting the 51% EU quota.
Is this really the last throw of the dice?
Not necessarily.
It is possible that the airline will return to the Government with a request for aid before putting the airline into administration. As we covered, the original bail-out request was rejected because the airline was not believed to have exhausted all other potential options. This new process may be a way of proving to the Government that no other alternative is possible.
How to earn Virgin Points from UK credit cards (April 2024)
As a reminder, there are various ways of earning Virgin Points from UK credit cards. Many cards also have generous sign-up bonuses.
You can choose from two official Virgin Atlantic credit cards (apply here, the Reward+ card has a bonus of 15,000 Virgin Points):
Virgin Atlantic Reward+ Mastercard
15,000 bonus points and 1.5 points for every £1 you spend Read our full review
Virgin Atlantic Reward Mastercard
A generous earning rate for a free card at 0.75 points per £1 Read our full review
You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.
American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points.
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express comes with 40,000 Membership Rewards points, which convert into 40,000 Virgin Points.
The Platinum Card from American Express
40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review
Small business owners should consider the two American Express Business cards. Points convert at 1:1 into Virgin Points.
American Express Business Platinum
40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review
American Express Business Gold
20,000 points sign-up bonus and FREE for a year Read our full review
Click here to read our detailed summary of all UK credit cards which earn Virgin Points.
(Want to earn more Virgin Points? Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)
Mikeact 
TGLoyalty 
Craig 
Philco 
Cal 
Lady London 
David D 
Hb 
James 
Blindman 
Nick G 
Baji Nahid 
David Turner 
Lee 
Alan 
Comments (349)