Virgin Atlantic has borrowed $745 million (£600 million) from the US investment giant Apollo Global Management, using its coveted landing slots at Heathrow Airport as collateral to help pay down debt and finance a major upgrade of its aircraft fleet.
The airline — which relies on Heathrow as its principal hub — said the fresh capital will be used to strengthen its balance sheet, modernise its cabins and roll out free onboard wifi, powered by Elon Musk’s Starlink satellite network.
“This agreement marks an important milestone as we continue to strengthen our balance sheet and deliver on our vision to become the most loved travel company,” said Shai Weiss, Virgin Atlantic’s chief executive.
The airline confirmed that the investment will help fund a full refurbishment of its Boeing 787-9 fleet from 2028, including expanded Upper Class and Premium cabins. Virgin also expects to take delivery of ten new Airbus A330neo aircraft next year, each featuring its latest high-end ‘retreat suite’ product.
Virgin Atlantic, founded by Sir Richard Branson in 1984, is jointly owned by Virgin Group (51%) and Delta Air Lines (49%). The company has previously leveraged its Heathrow slots — among the most valuable aviation assets in the world — raising £220 million in 2015 through Europe’s first bond sale backed by airport slot rights.
Take-off and landing slots at capacity-constrained airports such as Heathrow can trade for tens of millions of pounds, and are regarded as a crucial competitive asset. Virgin and British Airways remain the two dominant long-haul carriers at Heathrow, with both airlines guarding their slot portfolios closely.
For Apollo, the deal adds another sizeable UK investment in a year where the New York-based firm has been increasingly active. The private equity group, which manages $908 billion in assets, recently provided a £4.5 billion loan to support the Hinkley Point C nuclear project and committed £4.9 billion to Ørsted’s Hornsea 3 offshore wind farm.
“This creative, asset-backed structure unlocks important capital investment for Virgin Atlantic,” said Samuele Cappelletti, a partner in Apollo’s real assets division. “We believe the airline is well-positioned for continued success with its differentiated offering.”
His colleague Ben Eppley added that the financing “demonstrates our ability to provide bespoke, scaled lending solutions to leading businesses.”
Virgin Atlantic returned to profitability earlier this year for the first time since the pandemic, reporting £20 million in pre-tax profit for 2024, compared with a £139 million loss the year before.
However, the airline cautioned recently that signs of a softening in transatlantic demand were emerging, and its recovery continues to lag that of rival British Airways, which has enjoyed several years of strong financial performance since the end of lockdowns.
Virgin hopes that the new capital injection, combined with upgraded aircraft and enhanced passenger experience, will help secure its position in an increasingly competitive long-haul market.