By Alistair MacDonald and Benjamin Katz

LONDON -- Richard Branson's Virgin Atlantic Airways said it secured a financial package worth about $1.5 billion that will allow it to stave off bankruptcy and provide some breathing room for the British billionaire's broader effort to stabilize his travel and tourism empire amid the pandemic.

Mr. Branson's Virgin Group will invest GBP200 million ($250 million) in the U.K.-based airline, a popular option for trans-Atlantic flights. U.S.-based investment firm Davidson Kempner Capital Management LP will provide GBP170 million in secured loans. The deal is contingent on the airline making savings through deferrals of fees and advances from payments companies and aircraft lessors. The company will also push back orders of new Airbus SE aircraft, it said.

Virgin Group will retain its 51% controlling stake in the airline, and its U.S. partner Delta Air Lines Inc. will continue to hold the remaining 49%. Both companies are deferring fees on things such as using the Virgin brand name and the use of Delta's booking system, Virgin said.

Airlines have been retrenching dramatically amid a near-standstill to air travel worldwide amid the coronavirus pandemic. They have furloughed or let go hundreds of thousands of staff, deferred or canceled new aircraft orders and grounded flights, drying up revenue.

Unlike in the rest of Europe, where the likes of Deutsche Lufthansa AG and Air France-KLM have received billions of dollars worth of loans from local governments, the U.K. opted to forego an aviation-specific bailout strategy. That triggered a monthslong search by Virgin Atlantic for external funding to keep its operations ticking.

"Undoubtedly, the last six months have been the toughest we have faced in our 36-year history," said Shai Weiss, Virgin Atlantic's chief executive, in a statement.

Virgin Atlantic was poised to turn its first profit since 2016 this year, until the coronavirus struck, forcing it to cut flights by 98% in the second quarter and lay off 3,550 workers. The airline said in its statement that it expects capacity to be reduced by 60% in the second half of 2020 from the year before and predicts precrisis levels of flying won't return until 2023.

Last month, U.S. private-equity firm Bain Capital agreed to buy Virgin Atlantic's insolvent sister airline Virgin Australia Holdings Ltd., charting a future involving fewer and smaller planes and mirroring strategies adopted by other carriers, including in the U.S.

Mr. Branson has been among those at the very center of the financial pain the pandemic has unleashed. Much of his sprawling business empire is geared toward travel and leisure, industries particularly hard hit amid the crisis. Other Virgin holdings include a cruise business that had just received its first vessel and a U.S. hotel group that had intended to open several properties this year.

To shore up his businesses, including Virgin Atlantic, Mr. Branson's group sold around 12% of another big holding, Virgin Galactic Holdings Inc. -- the space-tourism venture that made its initial public offering in New York last year.

Write to Alistair MacDonald at alistair.macdonald@wsj.com and Benjamin Katz at ben.katz@wsj.com