Branson asks for loans from British government to keep Virgin Atlantic flying through Covid-19 storm

Virgin Atlantic will only survive the coronavirus pandemic if it gets financial support from the British government, the airline’s founder Richard Branson said.
Branson asks for loans from British government to keep Virgin Atlantic flying through Covid-19 storm

Virgin Atlantic flight VS355 arriving at London Heathrow Airport. Picture: Steve Parsons/PA Wire
Virgin Atlantic flight VS355 arriving at London Heathrow Airport. Picture: Steve Parsons/PA Wire

Virgin Atlantic will only survive the coronavirus pandemic if it gets financial support from the British government, the airline’s founder Richard Branson said.

Virgin Atlantic last month asked the government for emergency financial help in addition to the Covid-19 package made available to all British companies, but a deal has not yet been reached.

“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,” Mr Branson said in a blog post to staff.

“This would be in the form of a commercial loan — it wouldn’t be free money, and the airline would pay it back,” he said.

The UK-based Virgin Atlantic is 51% owned by Branson’s Virgin group, and 49% owned by US airline Delta.

Mr Branson, a billionaire, has come under fire from Labour politicians for asking for support at a time when Virgin Atlantic employees have taken a temporary wage reduction and much of the economy has ground to a halt.

It comes as Virgin Australia is poised to enter voluntary administration, with the cash-strapped airline unable to weather the coronavirus crisis because of its A$5bn (€2.9bn) of debt.

The Australian airline is owned by investors, including Singapore Airlines, Etihad Airways, Chinese conglomerate HNA, and Mr Branson’s Virgin Group.

The airlines have been among the worst hit during the crisis. Retailers have also been hit. In Britain, commercial tenants and landlords have asked the UK government for rental support, saying the pandemic makes it impossible for thousands of retailers to pay their rents.

The scale of the crisis facing the retail sector is grave and businesses are at risk of administration due to the impact of the virus, the British Retail Consortium and British Property Federation wrote in a letter to the government.

The letter proposed a furloughed space grant that would mirror similar schemes being introduced in other European countries, with the state supporting the fixed costs of businesses.

While sales may have increased in certain sectors such as food retailing and household items, these are temporary, and the majority of business are experiencing dramatic falls in turnover of up to 100%, the trade bodies wrote.

Reuters

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