Virgin Atlantic Cargo launches operations between UK and Pakistan
27 / 08 / 2020
Virgin Atlantic Cargo is set to operate flights between the UK and Pakistan from December this year, after creditors voted in favour of its restructuring plan.
Virgin Atlantic will operate three new routes: London Heathrow to Lahore; London Heathrow to Islamabad; and Manchester to Islamabad.
“Trade in goods and services between the UK and Pakistan is worth some £3.3bn a year, rising 4.7% year-on-year in 2019, with high volumes of goods such as textiles, apparel and machinery,” the company said. “The UK is the third biggest global market for Pakistani exporters after the US and China and their main trade lane in Europe”.
Juha Jarvinen, chief commercial officer at Virgin Atlantic, commented: “Pakistan is an extremely exciting opportunity for us – it boasts one of the largest foreign-born populations in both the UK and the US and as people start to travel to visit loved ones, we’re anticipating the demand to visit friends and relatives will increase post Covid-19.
“Both Lahore and Islamabad are popular year-round destinations and we look forward to welcoming travellers onboard as demand for leisure and business travel gradually increases to the region. The growth in trade between both countries also offers great potential for our cargo customers too.”
Dominic Kennedy, managing director at Virgin Atlantic Cargo, added: “The import and export market for goods between the UK and Pakistan is extremely healthy, so we’re delighted to be offering our cargo customers another prime route with such positive growth opportunities. This is supported by our fast connections over London to Europe, the US and Africa, and this potential will become even greater as Virgin Atlantic continues to reintroduce more routes and frequencies as part of our Covid recovery plan.”
In July, the carrier detailed a proposal for a privately-funded solvent recapitalisation under a court-sanctioned process in the UK. The five-year business plan, which is supported by existing shareholders Delta Air Lines and Virgin Group, envisages roughly £1.2bn ($1.6bn) in refinancing over the next 18 months.
The carrier has previously warned that without the capital injection as part of the restructuring it would run out of cash by September 28.
Yesterday, Virgin Atlantic secured the support of its creditors, including 99% support from trade creditors who voted in favour of the plan, the airline said.
It said the next step is for a UK High Court hearing on September 2 to sanction the restructuring. “We remain confident that the plan represents the best possible outcome for Virgin Atlantic and all its creditors and believe that the court will exercise its power to sanction the Restructuring Plan, at a hearing scheduled on September 2.”
That will be followed by a US Chapter 15 procedural hearing on September 3 to recognise Virgin Atlantic’s restructuring plan in the US.
“Achieving this milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies as soon as they are ready to travel.”
Shareholders are providing around $600m in support over the life of the plan, including a £200m investment from Virgin Group, and £400m of shareholder deferrals and waivers. Investment firm Davidson Kempner Capital Management is also providing £170m of secured finance, while creditors are supporting the airline with over £450m of deferrals.
Virgin Atlantic restarted passenger flying on July 20 after a three-month hiatus due to the Covid-19 pandemic and is currently operating flights to New York JFK, Los Angeles, Hong Kong, Shanghai, Barbados and Miami with further routes being added throughout September and October. In addition, Virgin Atlantic Cargo is continuing to offer cargo-only flights to Atlanta, Brussels, Chicago, Delhi, Dublin, Johannesburg, Lagos, Milan, Mumbai and Tel Aviv.