NEW YORK — Virgin Atlantic, the airline founded by British businessman Richard Branson, filed Tuesday for protection in U.S. bankruptcy court as it tries to survive the virus pandemic that is hammering the airline industry.
The airline made the Chapter 15 filing in U.S. federal bankruptcy court in New York after a proceeding in the United Kingdom.
A spokeswoman for Virgin Atlantic said the bankruptcy filing is part of a court process in the United Kingdom to carry out a restructuring plan that the airline announced last month. The process is supported by a majority of the airline’s creditors, and the company hopes to emerge from the process in September, she said.
(Reuters) – Emirates Group is planning to cut about 30,000 jobs to reduce costs amid the coronavirus outbreak, which will bring down its number of employees by about 30% from more than 105,000 at the end of March.
The company is also considering speeding up the planned retirement of its A380 fleet, the report added, citing people familiar with the matter.
An Emirates spokeswoman said that no public announcement has been made yet by the company regarding “redundancies at the airline”, but that the company is conducting a review of “costs and resourcing against business projections”.
“Any such decision will be communicated in an appropriate fashion. Like any responsible business would do, our executive team has directed all departments to conduct a thorough review of costs and resourcing against business projections,” the spokeswoman said.
Emirates, one of the world’s biggest long-haul airlines, said earlier this month that it will raise debt to help itself through the coronavirus pandemic, and may have to take tougher measures as it faces the most difficult months in its history.
The state-owned airline, which suspended regular passenger flights in March due to the virus outbreak that has shattered global travel demand, had said that a recovery in travel was at least 18 months away.
It reported a 21% rise in profit for its financial year ending March 31, but said the pandemic had hit its fourth-quarter performance.
It said it would tap banks to raise debt in its first quarter to lessen the impact of the virus on cash flows.
(Reporting by Kanishka Singh in Bengaluru and Alexander Cornwell in Dubai; Editing by Catherine Evans and Jan Harvey)
FILE PHOTO: An Emirates Airbus A380 airliner lands at Nice international airport, France
SEOUL (Reuters) – South Korea’s largest airline, Korean Air, plans to sell around 1 trillion won ($816.55 million) in new shares in its biggest rights issue in 20 years to raise funds amid mounting strains in the industry due to the pandemic.
Korean Air is the latest carrier to raise funds as travel restrictions imposed by governments around the world have led to airlines grounding their fleets worldwide.
Korean Air separately plans to receive 1.2 trillion won in support from South Korean state-owned banks.
About 79 million newly issued shares, to be listed on July 29, will be first bought by the carrier’s shareholders, including holding company Hanjin Kal which has a 30% stake in the carrier, followed by general public, the company said in a statement.
“Korean Air will continue to carry out self-rescue measures to overcome the dismal business environment due to COVID-19,” the company said.
Korean Air had 70% or more of its employees working in South Korea take a six-month leave of absence in April. Woo Kee-hong, the airline’s president, warned in March that the coronavirus outbreak could threaten its survival if the situation becomes prolonged.
Korean Air also picked last month a preferred bidder to buy its real estate and non-core assets, which some analysts value at about 400-500 billion won.
Korean Air had a debt-to-equity ratio of about 870% as of end-2019. It is expected to announce January-March quarter earnings later this week.
A spokeswoman for Korean Air said it was operating just 10% of its previously planned international schedule, and 60% of its domestic schedule.
The airline said it expects its June international schedule to rise to 20% of its previous plan, as it announced the addition of more international passenger flights to prepare for increased travel demand once COVID-19 restrictions are relaxed.
United Airlines Holdings Inc said earlier this month it plans to raise $2.25 billion through a bond offering, after announcing a public offering to raise more than $1 billion in April.
In March, Singapore Airlines said it would issue S$5.3 billion ($3.70 billion) in new equity and up to S$9.7 billion($6.78 billion) via mandatory convertible bonds in a rights issue backed by state investor Temasek Holdings.
($1 = 1,224.6700 won)
(Reporting by Joyce Lee; Editing by Simon Cameron-Moore and Louise Heavens)
Korean Air’s passenger planes are parked following outbreak of COVID-19, at Incheon International Airport
LONDON (Reuters) – Irish airline Aer Lingus said it was reviewing its social distancing procedures after a flight on Monday was packed with passengers.
European flights have all but come to a standstill during the coronavirus pandemic with only a few services operating for essential travel such as people going to work or being repatriated, or for cargo.
While there is no visibility on when travel restrictions will ease, airlines are considering how to safely restart services and give passengers confidence to fly.
Aer Lingus, owned by IAG <IAG.L>, said it would consider how it operates after its Belfast to London Heathrow flight on Monday had “unexpectedly high loads” and that due to the level of the demand for the route, it could need to make changes.
“Aer Lingus is reviewing its processes and procedures applicable to the operation of this service,” an Aer Lingus spokeswoman said, adding that safety was its top priority.
Some airlines have discussed leaving middle seats empty on flights to enable social distancing, while other airlines such as Germany’s Lufthansa <LHA.DE> and Hungary’s low cost airline Wizz Air <WIZZ.L> have made it compulsory for passengers to wear face masks on flights.
(Reporting by Sarah Young and Ian Graham; Editing by Kirsten Donovan)
FILE PHOTO: The Aer Lingus EI-DER Airbus A320 makes its final approach for landing at Toulouse-Blagnac airport
