Virgin Atlantic has secured a £1.2bn rescue in a major coup for the troubled airline's founder Sir Richard Branson.
A complex deal has been agreed with US hedge fund Davidson Kempner, credit card firms and other creditors following months of talks after a collapse in global air travel pushed the company to the brink.
Billionaire Sir Richard will inject £200m into the airline, with a further £400m coming from deferrals and waivers of fees owed to shareholders. The rescue has been achieved without financial support from taxpayers.
Shai Weiss, chief executive, said: "We have accomplished what many thought impossible."
The future of 36-year-old Virgin Atlantic was thrown into doubt as the coronavirus pandemic hit earlier this year.
It did not qualify for existing state-backed rescue schemes after racking up years of losses.
Appeals for a tailormade taxpayer bailout were rejected by Whitehall, raising fears that the airline might collapse with 10,000 jobs at risk, and even a pledge by Sir Richard to put up his private Caribbean island as security failed to sway officials.
More than 3,500 Virgin Atlantic staff set to be made redundant as part of the rescue deal. Meanwhile, the airline's jumbo jets will be retired and a base at Gatwick Airport - where its first flight departed on June 22, 1984 - will be closed.
Mr Weiss said: "Few could have predicted the scale of the Covid-19 crisis we have witnessed and undoubtedly, the last six months have been the toughest we have faced in our 36-year history."
The airline's boss admitted problems with customer service shortcomings following delays in refunding holidaymakers whose trips were cancelled due to the pandemic.
He said: "Despite the incredible efforts of our teams, through cancelled flights and delayed refunds we have not lived up to the high standards we set ourselves.
"We will do everything in our power to earn back their trust."
Davidson Kempner will inject £170m into the business through fresh loans. It is thought that the backing of a new investor and Sir Richard's own cash injection were crucial in convincing other creditors to delay repayment of £450m which they are owed.
A further £400m will come from either waiving or deferring fees owed to Sir Richard's parent business Virgin Group and Delta, the US carrier that owns a 49pc stake in the airline.
The overhaul of Virgin Atlantic’s finances will use a new court-sanctioned process and is expected to take effect this summer.
Sir Richard was criticised for going cap in hand to the Government and hit back at accusations he wanted "free money" from British taxpayers.
His private-only rescue deal contrasts sharply with UK rivals, which were able to lean heavily on state aid schemes because they had better finances going into the crisis.
British Airways, easyJet, Ryanair and Wizz Air have been handed £1.8bn of emergency loans from the Treasury to shore up finances hit by the coronavirus pandemic.
Josh Bayliss, chief executive of Virgin Group, said: "Virgin Atlantic has had to reimagine its business and rebuild its finances.
"Under the leadership of Shai Weiss, [the airline] has shown great resilience and unwavering spirit during this challenging time.
"This is the hardest challenge the airline has faced in its 36 years. However, strengthened by the refinancing, support of creditors and its outstanding employees, we are delighted that Virgin Atlantic will be able to continue flying."