The  British airline, Virgin Atlantic, has filed for bankruptcy as the global aviation industry continues to grapple with the devastating effects of the Coronavirus pandemic.

According to a report by Daily Mirror, this recent action is coming after Virgin Australia filed for voluntary administration, a type of bankruptcy, in April.

An earlier appeal by the airline for a bailout from the British Government was turned down by ministers, leaving the airline in a race against time to secure new investment.

READ MORE: Aviation: Aviation sector grasps for stimulus in worst ever crisis

The airline’s boss, Sir Richard Branson, even offered to pledge his Caribbean holiday island Necker in exchange for investment.

In the meantime, the airline said it will most likely run out of cash by September.

David Allison QC, for Virgin Atlantic Airways Limited, previously said: “The group’s financial position has been severely affected by the ongoing Covid-19 pandemic, which has caused unprecedented disruption to the global aviation industry.’’

‘’Passenger demand has plummeted to a level that would, until recently, have been unthinkable. As a result of the COVID-19 pandemic, the group is now undergoing a liquidity crisis.’’

(READ MORE: Bristow Helicopters sacks about 100 pilots due to Coronavirus pandemic)

A spokesperson for Virgin Atlantic disclosed that the airline attended a court session on Tuesday as part of a solvent recapitalization process under 26(A) of the UK Companies Act 2006. That process would be going ahead with the support of the company’s majority creditors.

The airline’s official said, “Following the UK hearing held earlier today, ancillary proceedings in support of the solvent recapitalization were also filed in the US under their Chapter 15 process. These ancillary US proceedings have been commenced under provisions that allow US courts to recognize foreign restructuring processes.’’

‘’In the case of Virgin Atlantic, the process we have asked to be recognized is a solvent restructuring of an English company under Part 26A of the English Companies Act 2006.”

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The UK based airline is seeking for protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country.

This move is coming less than a month after the airline disclosed that it had agreed a rescue deal worth $1.6 billion to secure its future beyond the Coronavirus crisis. Under the arrangement, Virgin’s boss, Richard Branson, would inject $200 million, with additional funds provided by investors and creditors.

This proposal needed to secure approval from creditors under a court-sanction process.

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Mr Allison told Justice Trower that the Virgin Atlantic Group has sound business model during a high court hearing on Tuesday.

It can be recalled that Virgin Atlantic, who have been heavily impacted by the coronavirus pandemic had put in some measures to ensure the future of the airline is safeguarded. Some of these measures include the reduction of its schedule to prioritize core routes based on demand, cut over 3,000 jobs and so on.

The management of Bristow Helicopters Limited has announced t company’s decision to lay off about 100 pilots and engineers in the next couple of weeks.

This is coming barely 24 hours after another airline, Air Peace, sacked over 70 pilots under its employment, due to the Coronavirus pandemic crisis.

In a statement that was issued by the airline, it was noted that the decision was taken due to the negative impact of the pandemic on its operations. Bristow Helicopters also noted that it would use this period to restructure all aspects of its business model.

The airline’s management described the downsizing exercise as painful but inevitable, as it was done in order to ensure the continuity of its business and delivery of essential services to its clients.

The aviation firm, which primarily provides services in the oil and gas industry, revealed that it had engaged the National Association of Aircraft Pilots and Engineers (NAAPE) in order to negotiate a fair and equitable redundancy compensation for all those that will be affected by this exercise.

(READ MORE: Oil and Gas companies revenues plummet by over N84 billion in 3 months)

Part of the statement by the airline said:

“This decision has not been made lightly, but having considered the state of the business and the very serious constraints caused by the spread of the COVID-19 disease and the downturn in the oil and gas market, the company must now take this painful, but decisive step to ensure the continuity of its business and delivery of essential services to its clients.

“One of these measures includes the right-sizing of the business to ensure that the company has the optimal level of personnel to continue the safe delivery of its services to its clients, whilst allowing the appropriate capacity for future growth.

“Accordingly, and with much regret, the company has taken the very difficult decision to release over 100 pilots and engineers (both National and Expatriates) over the next couple of weeks.”

Just yesterday, Nigerians woke up to the news that Air Peace had sacked about 70 pilots under its employment across its fleet and also reduced staff salaries by 40%. The airline said the exercise was due to the devastating impact of the Coronavirus pandemic on its business.

It added that the move was made to protect the majority of the existing jobs and the possibility of creating new ones in the future, as well as ensuring the survival of the airline.

Globally, the aviation industry has been one of the hardest-hit by the pandemic. Nigerian airports were shut from flight operations (domestic and international) in March as part of the measures to contain the spread of the coronavirus disease.

Following the gradual easing of lockdown, the Federal Government announced the gradual reopening of the airports for domestic operations from July 8. The airports are still shut to international flight operations.

The British Airline Pilots Association have announced that British Airways pilots have accepted a deal that will temporarily cut their pay by 20% and limit job losses to just about 270, as against the initial planned 1,255.

This deal has resolved an ongoing bitter dispute between the pilots and the airline, as the carriers attempt to navigate through the global slump in air travel due to COVID-19.

The British Airline Pilots’ Association (BALPA), while disclosing that just over one-fifth of the 1,255 initially planned redundancies will be allowed to go, the terms of the agreement suggest that the pilots will accept an initial pay cut of 20%, which will gradually reduce to 8% over a 2-year period and then phase out entirely in a longer-term.

The pilot union said that there will not be firing and rehiring of pilots. The UK lawmakers had previously been very critical of British Airways over the alleged usage of furlough fire and rehire scheme, a strategy used by companies to force employees to accept inferior terms.

They accused the airline of planning to cut as many as 12,000 jobs and exploiting the coronavirus crisis to reduce staff and weaken the employment terms of those remaining.

Airlines have been seriously hit by government lockdowns and restrictions that are parts of measures to contain the spread of the coronavirus pandemic.

The hopes of the airlines recovering at the tail end of the profitable summer tourism season seem to have been dashed due to disruptions caused by a new wave of the virus outbreak in many countries, including France and Spain, with new travel restrictions being placed by them.

The International Air Transport Association (IATA), had revealed that a full recovery is unlikely before 2024, which is a year later than it had earlier predicted. The British Airways, while agreeing with this bleak assessment, says that it does not expect the airline to return to pre-COVID-19 business level until at least 2023.

The IAG Group, holding company for British Airways, said yesterday, “Therefore we need to act now to reshape our company for a very different future.”

The company has not received the billions in bailouts that some rival airlines like Air France-KLM and Deutsche Lufthansa received. The assistance they got was only limited to furlough funds to protect jobs and state-backed loans.

Global lockdowns imposed to fight the coronavirus pandemic have negatively affected air travel, thereby putting the future of many airlines in serious doubt.