- British billionaire Richard Branson has offered to put his private island as collateral to save his airline Virgin Atlantic from collapse.
- In an open letter to Virgin Group staff on Monday, Branson pledged to use his private Necker Island to save the airline from travel restrictions related to coronaviruses.
- “As with other Virgin assets, our team will raise as much money as possible against the island to save as many jobs in the Group as possible,” said Branson.
- Branson Virgin Australia announced on Tuesday that it is preparing to join the voluntary administration.
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British billionaire Richard Branson has offered to put his private island as collateral to save his airline Virgin Atlantic from collapse.
Numerous Australian media reported on Monday local time that Virgin Australia, the Australian airline that Branson launched in 2000, was about to enter voluntary administration. Voluntary administration is similar to bankruptcy in the United States. The airline company officially announced that he had entered voluntary administration on Tuesday local time.
Virgin Atlantic has taken several cost-cutting measures to prevent the collapse. The UK-based airline announced last month that it will ground 75% of its fleet by March 26 and increase that number to 85% sometime in April. The airline said it would also ask staff to take eight weeks of unpaid leave over the next three months to avoid layoffs.
In an open letter to the entire Virgin group, Branson promised his private island Necker, located in the British Virgin Islands, as collateral to save Virgin Atlantic.
“As with other Virgin assets, our team will raise as much money as possible against the island to save as many jobs in the Group as possible,” said Branson.
Branson owns the 74-acre island, which operates as a complex that can accommodate up to 30 people.
The airline industry has taken a hit as the new coronavirus has led countries around the world to impose strict travel restrictions, causing a drop in demand for air travel. Several airlines around the world have faced new financial difficulties, some collapsing under pressure.
Aviation experts have warned that many global airlines may go bankrupt by May due to the coronavirus pandemic.
In his letter, Branson noted that Virgin Group operates in many industries hardest hit by the coronavirus, including “aviation, entertainment, hotels and cruises”.
“We have over 70,000 people in 35 countries working in virgin companies. We are doing everything we can to keep these businesses afloat, ”he said.
Branson also spoke of speculation that he could use his own personal wealth to lift airlines from the brink.
“I saw a lot of comments on my net worth – but this is calculated on the value of Virgin businesses around the world before this crisis, and not in cash on a bank account ready to withdraw,” he said. declared.
Branson is said to have asked the British government for a loan estimated at around £ 500 million ($ 621 million).
“With the Virgin Atlantic team, we will do everything we can to keep the airline running – but we will need government support to do so in the face of serious travel uncertainty today and without knowing how many time the planes will be immobilized. for, “he said.
He said the money would come from a business loan and “would not be free money.”
“The airline would reimburse,” he said. “The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. “
In one letter to Virgin Australia staff Branson said Tuesday that the news of the airline’s bankruptcy was “devastating.”
“In most countries, federal governments have intervened in this unprecedented aviation crisis to help their airlines. Unfortunately, this is not the case for Australia, “he said.
However, he has pledged to work with investors and the government to return the airline to service.
“This is not the end for Virgin Australia and its unique culture,” he writes. “I want to assure you all – and our competitor – that we are determined to see Virgin Australia back online soon. “
Flybe Airlines, linked to Virgin, entered voluntary administration last month. A spokesman said the airline’s financial troubles were to blame for his disappearance. Flybe had been sold to the Connect Airways consortium in February 2019, which is supported by Virgin Atlantic and was to be renamed Virgin Connect in 2020.