Virgin Atlantic defers deliveries to boost liquidity: ALC | News | Airfinance Journal

Virgin Atlantic defers deliveries to boost liquidity: ALC


Virgin Atlantic Airways is deferring the delivery of leased and owned Airbus A330neos and A350s to maintain liqudity as part of its refinancing plan, Air Lease executive chairman Steve Udvar-Hazy has disclosed.

Speaking on an investor call on 6 August, Hazy said that Air Lease, Aercap and Avolon had all participated in the £1.2 billion ($1.3 billion) financing plan as part of a “pre-packaged” reorganisation.

“What we did is some of our deliveries have been rescheduled. But most importantly, their direct buys were rescheduled to later time frames, which means the airline has to pay less in pre-delivery deposits to Airbus, and therefore, they can protect their cash liquidity position,” he said.

Six A330-900s being placed by ALC on lease with the UK carrier will now arrive after the airline’s purchased A330-900s, of which the London-based carrier has 14 on order and is in the process of taking delivery of a 12 A350-1000 order, he added.

A mixture of owned and leased A350-1000s are replacing the carrier’s last 747-400s and the A340-600s, Udvar-Hazy said, giving the carrier a “much more streamlined” fleet of 787-9s, A330neos and A350-1000s.

He said Virgin Atlantic intends to use the A350-1000s for high-density routes like New York, while the 787s will operate the “longer, let's say, a little thinner routes”, many as part of a codeshare or joint venture with shareholder Delta Air Lines.

The A330-900s will do “a lot of the other stuff” like services to Florida, the Caribbean, the Middle East and secondary markets in Canada.

“So it took a lot of effort. And the other key lessors, Aercap and Avolon, participated. We don't have any aircraft at Virgin at the moment, but we obviously had to be cognizant of a total solution rather than a sort of a partial solution,” Udvar-Hazy noted.

He said the airline’s UK bank lenders, Delta as a 49% shareholder and credit card processors had participated in the restructuring.

Virgin Atlantic Airways has filed for Chapter 15 protection in the USA and has started a parallel process in the UK to secure a legally binding agreement from creditors for its refinancing and restructuring plans.

Aercap has 12 aircraft placed with Virgin consisting of a mixture of A330s, A340s and 787s. Avolon has one A330 and three 787s placed with the UK carrier.


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Transaction Snapshot
Air Company | Bond issue | 01-24 | $1.5bn
Financial Close:
Some Aviation Trust
$1,500.00m USD
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