Virgin Atlantic could be in imminent danger of collapse without government support, founder Richard Branson has warned. In an open letter to staff, the entrepreneur said the coronavirus pandemic had created the most challenging trading environment the carrier had ever faced. Rebutting claims he was seeking “free money”, Branson urged officials to provide the struggling carrier with capital on commercial terms.
Branson said, “Together with the team at Virgin Atlantic, we will do everything we can to keep the airline going – but 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. The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value.”
Virgin Atlantic is owned by the Virgin Group, which holds a 20 per cent stake, Air France-KLM (31 per cent) and Delta Air Lines (49 per cent). The carrier is believed to be seeking £500 million from the UK government, but has seen applications rejected after failing to explore alternative sources of finance.
On the other side of the world, Virgin Australia is also seeking government support. Branson added, “The same is true in Australia, where the brilliant Virgin Australia team is fighting to survive and need support to get through this catastrophic global crisis. We are hopeful that Virgin Australia can emerge stronger than ever, as a more sustainable, financially viable airline. If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies.”
