While Delta Air Lines has a 49% stake in Virgin Atlantic, the Atlanta-based carrier has made it clear it is focused on ensuring its own business survives the COVID-19 crisis. That's not the only limitation, though. With its current 49% stake in the airline, the US carrier has already ‘bumped up against UK limits on foreign airline ownership'. The remaining 51% is owned by Sir Richard Branson's Virgin Group.
No matter how much Delta would like to lend support to Virgin Atlantic in this difficult time, Delta simply does not have the financial means to offer Virgin Atlantic a cash lifeline at this time. In fact, the US carrier just posted a $534m loss for Q1. Any cash that Delta has will be used to protect its own business and employees for as long as the carrier is able to do so.
It has already been widely reported that the aviation industry is struggling very badly amid the coronavirus crisis as travel restrictions imposed worldwide essentially decimated travel demand and revenue for airlines around the world.
Passenger airlines like Flybe, Trans States Airlines, and Compass Airlines have already gone under while major carrier Virgin Australia recently just entered voluntary administration after it was denied a loan from the Australian government. Air Mauritius also recently entered voluntary administration stemming from financial woes brought about by the COVID-19 pandemic.
For those who don't already know, Virgin Atlantic's Sir Richard Branson had recently tried to obtain a £500 million loan from the British government. He offered his Caribbean island as collateral and even went as far as stating that Virgin Atlantic would likely collapse without government support. It remains to be seen if the UK government would give Virgin Atlantic a much-needed helping hand.
Delta CEO Ed Bastian raised the possibility that Virgin Atlantic could end up going through insolvency proceedings. However, he's confident Virgin Atlantic would be able to re-emerge stronger should that scenario play out in real life.