Virgin Atlantic’s co-owner will not inject fresh capital into the cash-strapped airline, as talks continue with ministers and other private investors over a rescue.
US airline Delta, which owns 49pc of the Virgin Atlantic, said it was concentrating on its own problems with operations severely affected by the coronavirus pandemic.
Boss Ed Bastian warned Delta was facing a “crisis in cash” and that it was unable to help because a condition of recent US state aid restricted it from investing in foreign companies.
“We need to protect our own business. That’s where our focus is,” he told CNBC. “I trust Virgin will work through its challenges with the Government. If they are required to go through an administration process in the UK, I’m confident they could re-emerge.”
Virgin Atlantic said it was in talks with “a number of stakeholders” and was “exploring all available options to obtain additional external funding”. The airline has appointed restructuring specialist Houlihan Lokey to assist in securing an investment.
Billionaire Sir Richard Branson owns 51pc of Virgin Atlantic and has pledged his Caribbean island home to secure a government bailout.
Talks with Whitehall officials have stumbled in the past week. It is understood Virgin has struggled to make a compelling case to ministers, who are concerned about the airline’s recent loss-making activities and a lack of assets against which to secure a £500m loan.
Under boss Shai Weiss, Virgin Atlantic is understood to have been on track to return to profitability until Covid-19 hit operations.
Sir Richard’s Virgin Australia, a separate business in which the businessman owned a 10pc stake, collapsed into bankruptcy on Tuesday.