Virgin Atlantic‘s founder, Sir Richard Branson, has revealed that the airline could be facing imminent collapse, unless a government lifeline is extended.
In an open letter to employees of Virgin Atlantic, and the now-collapsed Virgin Australia, Branson said that survival of Virgin Atlantic was vital to provide competition to the UK flag-carrier British Airways.
“Virgin Atlantic started with one plane 36 years ago. Over those years it has created real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large.”
Sir Richard Branson, Virgin Group CEO
Branson stressed that a government loan would be vital to securing Virgin Atlantic’s future, in the face of the coronavirus pandemic.
Branson also noted that rival British low-cost carrier Easyjet received a £600 million ($747 million USD) government bailout earlier in April.
“We will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for. This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back.”
According to the open letter, Virgin Atlantic employees have agreed to an 8-week-long pay cut to be spread across six and half months.
Branson called the decision “virtually unanimous“; explaining that it is was made in conjunction with Virgin Atlantic employees and the trade unions representing them, all in an effort “save as many jobs as possible“.
Branson also responded to prompts about his private island, Necker Island, in the British Virgin Islands. He defended it as his home, saying that it was not used for tax purposes. Branson said that Virgin pays tax to the UK.
In the letter, Branson explained that he and his team would be raising money against the island, as well as other assets, to keep the airline afloat.
CNN has reported that the UK government has said it will consider funding all organisations on a case-by-case basis.
Article Sources: Virgin Atlantic Open Letter, CNBC, and CNN.
Delta is likely trying to save itself. I think VS will be caught in the middle, Delta unable to fund due to receiving US funds and it’s own precarious picture, Virgin unable to get UK funds because of Delta ownership.
A google search reveals that it’s not just Delta that part owns Virgin Atlantic but Air France which has a 31% stake. That leaves Branson with only a 20% share. Does that qualify for a British Government loan/bailout?
Regarding virgin airline what did they do for you last time you Took an Atlantic flight
very tight on the coffee and I’ll give you orange juice when it’s orange squash as for the loan
Margaret facture would say no no no
And taxpayers money should only be used for hospitals old peoples homes public toilets and
Have a central services
Not to be used for companies that I’ve got an expansion programme and do not know how to live within their means like everybody else
I will not bail out Virgin Atlantic too. I’m with the British Govt. Since Delta owned 49% of VA, why not ask them to inject more cash. For Sir Richard Branson, good luck with your Caribbean Island mortgage for more loan to save VA. BTW, he didn’t save Flybe. Pathetic.
Here in America, if I go to ask for a welfare check, the government makes damn sure I am actually broke before they will give me a dime. If I even have a car title in my name I have to sell it before I can suck the public money coffers dry. Why is it any different for this situation? Also, isnt a 6 month emergency plan part of your business model? And what about the exit strategy portion of your business model that is mandatory before starting up a business? And why are you putting it on the backs of your workers. I am pretty sure you could pay the 600 million for easyjet, bail your own self out, pay the 8 weeks to the employees and still go to the strore and get you some Pelosi ice cream.
My question on this topic is, dont you have 600 million Mr Branson? Isnt it your company Mr Branson? Why should a government bail out your company before yuopui bail out YOUR company? Why should you keep your money while the people bail out YOUR company with THEIR money? Wont you keep on making money if they do bail you out? I would think that as the owner of a company you would go broke first then ask for a bailout. Just sayin
SPOT ON !!!!!
I cannot imagine the public (and US Govt. outcry) if Delta starts putting money into their ‘foreign carrier’, ESPECIALLY if Delta is getting US Govt grants and loans……
“Branson to mortgage Caribbean island as he seeks Virgin bailout” is being reported by various sources, Not sure of details.
i can see how the UK is hesitant to give support to an airline that is 49% owned by Delta. It’s probably part of the reason Branson doesn’t want to, or isn’t able to. invest his own money.
What is Delta willing to do?