Richard Branson has become somewhat desperate in his quest trying to get the government to chip-in in the form of a “commercial” loan.
Virgin Atlantic would collapse unless they get a £500M loan form the UK. It is unclear for how long this money would last.
You can access Virgin Atlantic’s site here.
Here’s what Brandon posted on his blog:
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 (as easyJet will do for the £600m loan the government recently gave them). 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 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.
Here why Branson lives in a tax haven:
There have been comments about my home. Joan and I did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island, which I bought when I was 29 years old, as an uninhabited island on the edges of the BVI. Over time, we built our family home here. The rest of the island is run as a business, which employs 175 people. As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the Group.
If the airline would be worthy of investment, surely there would be real commercial players willing to lend money at an applicable rate?
Richard Branson has been quite loved in the UK, but recently there has been some noise about his residence in a tax haven and one of his companies suing the NHS after losing a contract in the UK.
Delta owns 49% of the airline and the Virgin Group, 51%. A deal for 31% of the airline going to Air France-KLM fell through in 2019 and given the current situation, was probably a good choice for AF-KLM. Perhaps Delta could chip in if Richard Branson is unable to come up with more capital or if lenders are not willing to loan more money?
The situation must be rather desperate for Sir Richard because you shouldn’t threaten a government unless it is truly your last option.