Sir Richard Branson
Anjali Sundaram | CNBC
Billionaire Richard Branson has said that a loan from the U.K. government is necessary to help his airline business Virgin Atlantic survive the coronavirus crisis.
Branson said in a letter to employees, published Monday, that while Virgin Atlantic would do everything it could to keep going during the pandemic, it needed “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, which he stressed “wouldn’t be free money and the airline would pay it back.” It comes after rival British airline easyJet secured a £600 million loan from the U.K. government earlier this month.
Delta Air Lines has a large minority stake in Virgin Atlantic.
Branson was responding to recent criticism over his handling of the coronavirus crisis.
He said Virgin Australia also required financial support to get through the pandemic, warning that if the Australian arm of his airline folded, rival Qantas would “effectively have a monopoly of the Australian skies.”
Virgin Australia, which has reported seven consecutive years of annual losses, is on the verge of entering voluntary administration due to the coronavirus and its $3.2 billion debt pile, Reuters reported Monday.
‘Virtually unanimous’ decision about pay cuts
In the letter, Branson said that in the five decades he had been in business, “this is the most challenging time we have ever faced.”
Last month, Virgin committed $250 million to help support its businesses and protect jobs. The group has more than 70,000 staff across 35 countries.
Branson also hit back at criticism about Virgin Atlantic staff being forced to take a pay cut. Last month, deputy leader of Britain’s opposition Labour party, Angela Rayner, suggested on Twitter that Branson should make up his staff’s wages by selling his private island.
In his letter, Branson said that the eight-week unpaid leave, to be spread across six and a half months, was a “virtually unanimous decision made by Virgin Atlantic employees and their unions who collectively chose to do this to save as many jobs as possible.”
He added that “it was not forced upon them by management.”
Branson, who Forbes estimates has a net worth of $4.4 billion, said his wealth was calculated on the value of Virgin businesses before the crisis, “not sitting as cash in a bank account ready to withdraw.” He said his personal wealth and cash held by the Virgin Group was now being invested in back into its companies.
Branson also said he would be raising money against Necker Island — his private island — and other assets in an effort to save jobs.
Source: Business - cnbc.com