Earlier this week, Sir Richard warned that Virgin Atlantic would go bust without Government support. He called for a commercial loan to help the company survive the coronavirus crisis, which has seen flights ground to a halt amid airport closures. In an open letter to Virgin Group employees this week, Mr Branson wrote: “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. “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.”
He also noted that the calculation, for the amount of money needed to be raised, was based on “the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw”.
However, when Virgin Atlantic’s rival airline – British Airways – encountered similar turmoil in 2009, Sir Richard said the Government should avoid bailing them out.
At the time, he said the airline was “not worth much anymore” and warned ministers against bailing it out if its finances deteriorated.
He added that ministers “would be better to wait for its demise”.
The now 69-year-old continued: “We and others are standing by ready to take on their routes and runway slots at Heathrow if they get into serious trouble.
“I thought the US government’s bailout of the car companies was a bad idea and it’s the same for BA.”
Mr Branson made the claims at an event before a Virgin Atlantic flight to New York – marking the airline’s 25th anniversary.
The statement was widely reported in the media by titles such as the Independent, the Daily Mail and the Guardian.
After he made the comments, British Airways’ share price dropped by almost nine percent.
In fact, the embattled company was the biggest faller in the FTSE 100 at the time, slipping by 8.65 percent.
When contacted by Express.co.uk, a Virgin Group spokesperson said: “The current global crisis is unprecedented, impacting families, livelihoods and businesses in a severe and unparalleled way – it’s an entirely different set of circumstances to those in 2009.
“The reality is that many airlines around the world, including Virgin Atlantic, now need government support and many have already received it.
“Virgin Atlantic’s support would be in the form of a commercial loan and it would be paid back.
“Virgin Atlantic has a long history of delighting its customers and offering much needed choice and competition that significantly benefits the UK economy.”
Published at Fri, 24 Apr 2020 14:00:00 +0000