Billionaire founder Richard Branson said on Monday that airlines need money from the British and Australian governments to continue "in the face of serious travel uncertainty today", including lack of clarity about the period during which the planes must remain immobilized.
In an open letter to employees, Branson said that the survival of Virgin Atlantic and Virgin Australia was important to provide much-needed competition to British Airways, a IAG subsidiary, and Qantas . "If Virgin Australia disappears, Qantas will effectively have a monopoly on the Australian sky," he noted.
Branson, who has already injected $ 250 million into Virgin Group companies in response to the pandemic, said he would offer his Necker Island property in the Caribbean as collateral "to raise as much money as possible against the island to save as many jobs around the group as possible. "
Virgin Atlantic will apply for a commercial loan from the British government, which it will repay, added Branson, without giving details of the amount of money it needs.
"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 will be no competition and hundreds of thousands of additional jobs will be lost, as well as critical connectivity and enormous economic value, "he said.
National travel bans and blockages have brought global aviation almost to athe stop, prompting dozens of airlines to immobilize planes and place workers on leave without pay. The International Air Transport Association said last week that airline passenger revenues would be cut in half this year, falling $ 314 billion from 2019.
Lufthansa , one of the largest airline groups in Europe, permanently reduces the size of its fleet and closes one of its low-cost carriers, warning that the aviation sector will take years to recover from the crisis.
While U.S. airlines will receive tens of billions of dollars in support as part of the country's $ 2 trillion stimulus package, European governments have not promised wholesale bailouts to their carriers.Instead, individual airlinesexploit government support to pay staff salaries and increase debt.
Low budget carrier EasyJet said earlier this month that it had raised £ 600 million ($ 746.6 million) through the UK government's Covid Corporate Financing Facility. The government has said it will examine the situation of businesses on a case-by-case basis.
British Airways and Virgin Atlantic have found 38,000 employees between them and are counting on the government to pay 80% of the wages of these employees.
A spokesperson for Virgin Atlantic said the airline "is exploring all options available for obtaining additional external funding." The airline declined to comment on a report from the Financial Times that it was asked to resubmit its loan proposal for a £ 500 million ($ 622.2 million) coronavirus.because the British government was not satisfied with its initial offer.
Virgin Group operates in many sectors hardest hit by the coronavirus pandemic, including aviation, recreation, hotels and cruises. "The challenge right now is that there is no money going in and many are coming out," said Branson. The company employs 70,000 people in 35 countries.
Branson has been criticized for asking government help when he doesn't pay income tax in the UK because his main home is on Necker Island, which he bought at age 29 years old.
He addressedthe criticism in his letter, saying that he and his wife Joan "did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular of Necker Island". Virgin businesses have paid taxes in the UK, he said.
- Eoin McSweeney contributed to the report. Source link
