Virgin Atlantic owners Sir Richard Branson and Delta have pumped another £400m into the struggling carrier, as the spread of the Omicron variant and growing travel restrictions spread gloom around airline investors.
Red list travel restrictions have forced Virgin to scrap the reopening of key South African winter sun routes, as well as hitting its Lagos service, while the reintroduction of PCR testing for all travellers to the UK has hit the sector more broadly.
While Virgin had been recently boosted by the reopening of the transatlantic route, and insists it anticipates a return to profitability from 2023, Branson and Delta have had to dig further to bolster the airline and allow it to pay down debt.
Shai Weiss, chief executive of Virgin Atlantic, said that both shareholders and creditors had “been a source of unwavering support” during the pandemic, with an earlier £1.2bn recapitalisation in September 2020 bringing the airline back from the brink.
Delta’s chief executive, Ed Bastian, said that Virgin Atlantic’s business had now transformed, “allowing them to emerge from the pandemic a stronger airline”.
Weiss joined other UK airline bosses in signing a joint letter to the prime minister objecting to the “disproportionate and haphazard” policies hitting customers and businesses. About £1bn combined was wiped off the market value of easyJet, Ryanair, and British Airways’ owner IAG on Monday. All saw share prices fall as investors digested news of cancelled holidays and the prospect of mounting travel restrictions hitting consumer confidence.
The airlines called on Boris Johnson to scrap the emergency testing regime for international travellers, given the spread of the latest Covid variant in the UK, and provide bespoke economic support for the sector to help it through the crisis.
The letter said: “As leaders of UK airlines, we are deeply concerned about the haphazard and disproportionate approach by government to travel restrictions following the emergence of the Omicron variant … Pre-departure and upon-arrival testing clearly add very little value to our Covid protection, but unnecessarily disrupt Christmas for families as well as businesses while severely damaging the UK travel industry.”
The airline bosses urged the government to “prevent the permanent scarring of our industry” by removing the requirement for fully vaccinated passengers to test, when the policy is formally reviewed on 20 December, and to act on tackling the inflated prices and poor provision of private PCR tests.
They added: “We and our customers feel sincerely let down, having believed a more pragmatic, evidence-led approach to travel, in line with the rest of the world, had been achieved and agreed by all concerned just a few months ago.”