Sir Richard Branson warns Virgin Atlantic could collapse without financial support.
While Virgin Australia is expected to go into administration, more developments regarding Virgin Atlantic’s situation are emerging.
Sir Richard Brandon, who owns 51% in Virgin Atlantic, wrote an open letter to employees today.
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.
Specifically, this loan is expected to be around £500 million. So far, Richard Branson has injected £250 million into the Virgin Group, with around £100 million to Virgin Atlantic.
The airline also requested for a bailout from the government, but was denied and Virgin Atlantic was told to resubmit a proposal.
However, some major companies, such as Airbus, Rolls-Royce, London Heathrow Airport, and Manchester Airport, are backing Virgin Atlantic for a bailout.
According to Sir Richard Branson:
Without (the loan) 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 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.
Unfortunately, both Virgin Atlantic and Australia are struggling during these unprecedented times of plummeting air travel demand. We will likely hear more news over the next few weeks.