More bad news: Virgin Atlantic has officially filed for Chapter 15 bankruptcy in New York.
Virgin’s position looks shaky: it sold Virgin America to Alaska a few years ago, and earlier this year Virgin Australia also filed for bankruptcy and was taken over by Bain Capital. After saying last month it had just received a £1.5 billion loan, Virgin’s flagship carrier Virgin Atlantic suddenly announced a Chapter 15 bankruptcy filing.
I keep noticing a pattern: the sweeter the airline mileage program, the tougher the situation seems to be. Airlines with worse mileage programs tend to fare relatively better, and they also roll out more interest-free loan promotions to extract money.
Chapter 15 bankruptcy is somewhat different from the more commonly heard Chapter 11. My simple take is that Chapter 11 is for companies registered in the United States, while Chapter 15 is for companies incorporated outside the U.S. that still do business here.
There are still four months left in 2020. We don’t know which travel and aviation companies might file for bankruptcy next, but it will likely be several years before we return to the earlier hot market atmosphere.