A syndicate of lenders to Virgin Atlantic has appointed Deloitte to advise on their financial exposure in the event of a restructuring of the airline, according to reports.

Sky News quoted an aviation source as saying the group of banks were owed at least £250 million by the carrier, which is currently battling for survival and negotiating with the government and private investors on a bailout package.

The report said a number of private investors were waiting on the outcome of talks with the government before committing additional capital. However, an initial request for £500 million in aid was turned down in April.

The carrier has reportedly placed US-based restructuring firm Alvarez & Marsal on standby to prepare for potential insolvency, including a possible a ‘pre-pack administration’ if all else fails.

This would see the airline’s assets sold before the appointment of an administrator.

However, Sky News said such a move could cause complications including its ability to continue flying under its CAA licence and the termination of its aircraft leasing and slot agreements as part of an administration process.

On Saturday, Virgin Group confirmed it had sold $366 million worth of shares in the Virgin Galactic space travel brand, and said it intended to use the net proceeds of the sale to “support its portfolio of global leisure holiday and travel businesses that continue to be affected by the unprecedented impact of Covid-19”.

At the beginning of this month, Virgin Atlantic announced it would cut 3,150 jobs, move its operations from Gatwick Airport and rebrand Virgin Holidays.

Last week the airline said government plans on quarantine arrivals would delay its return to flying until August, a month later than it had previously intended.

Chief executive Shai Weiss has insisted he is “100% confident” Virgin Atlantic will survive.