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Richard Branson Offers Private Island to Secure Rescue Money for Virgin Atlantic
Virgin Atlantic founder Sir Richard Branson has stated in a public letter that he is willing to offer his private island as security against any deal from the U.K. government. Although the tycoon has committed $250 million of his own money, Virgin Atlantic says it requires around an extra $615 million in commercial loans.
The letter was published to around 70,000 of his employees located across 35 countries on April 20 amid a wide public backlash against the potential use of taxpayer money for an airline that is partly owned by a billionaire worth $4.4 billion.
In the letter, Branson said: “It is hard to find the words to convey what a devastating impact this pandemic continues to have on so many communities, businesses and people around the world.”
He continued to state: “From a business perspective, the damage to many us unprecedented and the length of the disruption remains worryingly unknown.”
Talking specifically about the U.K. airline, he said: “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 severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.”
But, in an effort to distance the company’s image from receiving a state handout, Branson committed the airline to repay the money by saying: “This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back.”
Virgin Atlantic began commercial operations in 1984 and has a fleet of 42 aircraft based out of London Heathrow, Gatwick and Manchester. The airline, alongside Virgin Atlantic Holidays, is 51 percent owned by Virgin Group and 49 percent by Delta Air Lines.
Delta has received financial support from the U.S government as part of a $25 billion rescue package in an effort to keep workers in their jobs until September. By accepting the deal, around 30 percent will eventually be paid back.
Virgin Atlantic’s sister airline, Virgin Australia, has been placed into voluntary administration in an attempt to recapitalize Australia’s second-largest airline which accounts for 10,000 employees. The airline is seeking an individual package from the Australian government totaling to around $890 million.
Deloitte administrator Vaughan Strawbridge said in a statement: “Our intention is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible.”
Speaking specifically about Virgin Australia, Branson said: “This is not the end for Virgin Australia and its unique culture. Never one to give up, I want to assure all of you — and our competitor (Qantas) — that we are determined to see Virgin Australia back up and running soon.”
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