Richard Branson's Virgin Atlantic has filed for bankruptcy protection in the United States after telling a court it would run out of cash next month if a pending rescue deal isn't approved.
Bloomberg reports the company had said during proceedings in Britain that it planned to apply for the US protection while it finalises a rescue plan that's already supported by a majority of its stakeholders. Virgin is seeking to secure a 1.2 billion pound ($2.37 b rescue, which was announced in July.
Chapter 15 bankruptcy protection allows foreign companies with US assets to protect themselves against claims while they work on a turnaround plan at home.
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More than 20 airlines have failed or have sought bankruptcy protection after during the past six months as the pandemic wiped out nearly all international travel earlier this year.
Capacity is running at just over 50 per cent of what it was last year and airlines which haven't been able to get state backing or raise sufficient funds privately are particularly vulnerable.
