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Delta CEO won't invest more in Virgin Atlantic, say British carrier might file for bankruptcy

April 22, 2020
3 min read
Delta CEO won't invest more in Virgin Atlantic, say British carrier might file for bankruptcy
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Delta Air Lines is prepared for its partner Virgin Atlantic Airways to enter administration as the prospects of government aid dim amid the coronavirus pandemic.

The Atlanta-based carrier will not provide any funds to Virgin Atlantic, of which it owns 49%, said Delta CEO Ed Bastian during a first quarter earnings call on Wednesday. In addition, it is prepared for the airline to enter administration, the UK's equivalent to Chapter 11 bankruptcy restructuring.

"Virgin Atlantic may have to go down that same path [as Virgin Australia]," he told staff during a virtual town hall following the call and viewed by TPG. "Just because they file for bankruptcy or administration does not mean they’re going away… it’s an opportunity to restructure the business.”

Delta has no plans to sell or reduce its stake in Virgin Atlantic, Bastian noted.

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Virgin Australia, which is also one of Delta's partners, entered voluntary administration on April 21. Many expect Australia's second largest carrier to be acquired by a new owner through the process and restructured as a smaller, likely all-domestic airline.

Virgin Atlantic has temporarily suspended all passenger flights as COVID-19 continues to keep would be travelers out of the sky. The airline has sought millions of pounds from the UK to stay in business, something the government has yet to decide on.

"We will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for," Virgin Atlantic founder Richard Branson wrote in a letter to staff on April 20. Branson has gone so far as to pledge his personal island as collateral for a potential loan.

Related: Richard Branson says Virgin Atlantic will collapse without government support

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Virgin Atlantic's troubles are the same facing airlines around the world: near-zero passenger traffic amid fears of the coronavirus and government restrictions aimed at slowing its spread. International travel has been hit the hardest by said restrictions, and is expected to recover slower than domestic demand.

What that recovery looks like is anyone's guess. But it will undoubtedly include new safety measures designed to minimize the risk of exposure to COVID-19 to travelers, and limit its spread. However, there is no clear answer on what measures will assure would-be flyers.

"Confidence is everything," said International Air Transport Association (IATA) chief economist Brian Pearce on April 21. "We really do need to see measures that restore passenger confidence."

Related: At least 40% of travelers nervous about flying again after coronavirus

Featured image by PA Images via Getty Images

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Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
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Best premium travel card for value
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10xEarn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards®.
5xEarn 5x total points on flights through Chase Ultimate Rewards®.
3xEarn 3x points on other travel and dining.
1xEarn 1 point per $1 spent on all other purchases
  • Intro Offer
    Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®

    80,000 bonus points
  • Annual Fee

    $550
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

If you are looking to take your premium rewards to the highest level, this card is really a no brainer in our eyes. Chase's Ultimate Rewards make points easy to redeem, with a wide range of 10 airline and three hotel transfer partners and a friendly user interface. Despite the high annual fee, Chase is consistently adding new benefits to keep the card competitive in a fierce premium rewards field.

Pros

  • $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year
  • Access to Chase Ultimate Rewards hotel and airline travel partners
  • Unlimited 3x points on the broad category of travel and dining
  • 50% more value when you redeem your points for travel through Chase Ultimate Rewards®
  • Broad definitions for travel and dining bonus categories

Cons

  • Steep $550 annual fee
  • May not make sense for people that don't travel frequently
  • You must spend the $300 travel credit before earning 3x points for travel and dining
  • No automatic hotel elite status
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,200 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year.
  • Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,200 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit every four years for Global Entry, NEXUS, or TSA PreCheck®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more