The COVID-19 pandemic has been catastrophic for the airline industry. Passenger numbers are almost at zero, with only a handful of relief flights still airborne. Airlines are appealing to governments for support but there is no guarantee that help will materialise.
Virgin Atlantic made it clear last week that they have appealed for government support, suggesting emergency credit facilities to a value of £5-7.5 billion for the UK aviation sector.
It is understood that Virgin Atlantic is expected to ask for a government bailout in the coming days, worth hundreds of millions of pounds, and it is likely that other UK airlines will be seeking the same state aid.
Richard Branson has said he will inject $250 million into the Virgin group, including the new Virgin Voyages cruise line, but more financial help will be needed.
UK Chancellor of the Exchequer, Rishi Sunak, has told airlines only to ask the government to step in as “a last resort” and “exhaust other options” first, including exploring other avenues such as raising money from shareholders.
The government has also said its emergency business measures, including a Bank of England scheme for firms to raise capital and employee wage subsidies, are available for airlines.
But Will This be Enough?
IATA CEO, Alexandre de Juniac, said:
“There is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.”
IATA CEO, Alexandre de Juniac
Grant Shapps, Secretary of State for Transport, told MPs on the Transport Select Committee that nothing had been ruled out in its response to coronavirus for the aviation sector, including a state stake in airline ownership.
A Virgin Atlantic spokesperson commented:
“The aviation industry is facing unprecedented pressure. We are appealing to the Government for clear, decisive and unwavering support. Our industry needs emergency credit facilities to a value of £5-7.5bn, to bolster confidence and to prevent credit card processors from withholding customer payment.”
Virgin Atlantic spokesperson
There’s no doubt about it. The coronavirus has had a apocalyptic affect on aviation. Airlines, including Virgin Atlantic, are playing a critical role in delivering vital medical supplies, but this doesn’t compensate for the almost total loss of passengers flying.
Decisions made in the coming days and weeks will be critical for airlines’ survival; these decisions will shape how the aviation industry looks, when the world emerges from the COVID-19 pandemic.
Why should the uk government help a non taxpaying airline he left the uk to live on a private island so he should use his own money
I feel Richard Branson could do as what the Tory MP stated in parliament the other day & cover the salaries with his own cash from his interest net payments alone from his Billions! He keeps banging on how he loves his staff and their the best,so show it!! Its a few quid in his ‘economies of scale’ etc!
Regarding the airline itself ,well its going to need some help but i am not sure how this is going to work as Delta has a 49% share stake in that airline and the UK Government i would think will not be trying to help Delta as i am sure they will be asking their own US Government to help their own airline? The Q is ,what do you do with stakes??? The UK will want a %? ownership stake (temporarily) till it gets back on its feet and pays off any grants etc.I suppose that would have to come out of Richard Branson own personal share stake if he seeks it but how does Delta share fit into all this?? how much of the 51% would the UK Government want for the millions required??? Is it even up for discussion or can he Virgin seek the funds with no stakes implementation,just a debt?? I have not read anywhere as of yet how it will be done?
Hello. Neither have I. It’s really interesting to read your comments and you raise some good points.
Great read and let’s hope VS survive to tell the tale.
Hi Clive, thanks for your comment. Yes, let’s hope so!
Hi Sam, you let as know what’s going on, it is chocking, feel for all the Airlines and staff, home bound for all of them..but not only them we me as well, stay safe Sam till we and you can fly again best wishes to you..
Big admirer ..Namaste ✌😷🌹🤗💖
Hi Rosemarie, great to read your comment. It’s so incredibly tough for airlines and their staff right now as you say. Here’s hoping we all get back to some sort of normality soon, and see more planes in the air again. Namaste back to you. Louise