Richard Branson set to pump £200m into Virgin Atlantic

Sir Richard Branson is set to inject £200m into Virgin Atlantic as part of a deal to save the embattled airline.

The injection comes as the carrier is attempting to finalise a broader refinancing package worth about £1bn.

Delta Air Lines, which owns a minority stake in Virgin, will make a £400m commitment, the Financial Times reported.

The commitment is likely to be in the form of  deferred payments such as brand fees and shared IT and back-office platforms.

A spokesman for the carrier said: "Virgin Atlantic has been working on a comprehensive, solvent recapitalisation of the airline to ensure that we can continue to provide essential connectivity and competition to consumers and businesses in Britain and beyond."

The airline is leaning towards a rescue package led by Wall Street hedge fund Davidson Kempner Capital Management, Bloomberg reported.

The firm has reportedly emerged as the favoured funding provider, ahead of an alliance between Elliott Management and investment firm Greybull Capital.

A final decision has not yet been made and Centerbridge Partners, which had previously dropped out, could still make a late proposal.

A spokesman for New York-based Davidson Kempner, which manages more than $30bn (£24bn) of assets, declined to comment, as did Elliott and Centerbridge.

The potential rescue deal comes two months after the airline announced plans to cut more than 3,000 jobs, or one third of its staff, as its fleet remains grounded.

The pandemic has hammered the aviation industry and its recovery is expected to be slow as governments continue to enforce travel restrictions.

Virgin Atlantic previously sought a state bailout, but Sir Richard's plea was shot down by Chancellor Rishi Sunak.