Last week, it was reported that Virgin Atlantic airlines had filed for bankruptcy protection. However, in a twist, the Virgin Galactic Holdings group (SPCE) has denied the bankruptcy reports and has instead stated that their recent appearance in court was “all part of the process.”
According to representatives of the airline company owned by Sir Richard Branson, the court appearances were related to a “solvent recapitalization” finalization that was underway. In speaking with Forbes, Virgin stated that court proceedings were being conducted so the company could be approved to hold affected creditor meetings in August. The airline claims that it is restructuring itself and is working on gaining support for the changes it plans to make in September from its current stakeholders; the company claims to have already garnered support from the majority.
While Virgin Atlantic has already established a presence and efforts in London courts, the company is also working on pushing for American approval on the restructuring plan by working with the New York court system.
The airline industry has been one of the hardest hit throughout the coronavirus pandemic. In July, Spirit Airlines (SAVE) announced that it would be furloughing workers in the future. While Southwest (LUV) announced that it would be delaying layoffs and furloughs, it was also reported in July that a significant portion of employees were planning to exit voluntarily. United Airlines (UAL) also reported substantial Q2 losses this year. Some experts believe that the entire airline industry won’t report more than $1.3 billion in sales due to the ongoing pandemic.
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