While these incredibly low oil prices (now trading in the negative) might be phenomenal for airline companies during normal times, the reality is that most airline companies are effectively crippled due to this coronavirus pandemic. The impact has been disastrous for the industry as a whole, with most companies in this sector witnessing substantial declines in their share prices. The situation has gotten so bad that Richard Branson, the iconic billionaire founder of two separate airlines underneath his Virgin brand, has offered up his own private islands as collateral for much-needed government loans.
Although Branson has an estimated net worth of just under $5.9 billion, the billionaire doesn’t have the cash on hand to personally bail out his airline, saying that his wealth is mainly tied up in the value of his businesses before this coronavirus pandemic hit. Back in March, Virgin Australia supposedly asked the Australian government for a whopping $1.4 billion loan to shore up its financial situation. Virgin Atlantic has also been told to re-apply for a 500 million pound loan with the British government, which wasn’t met with much enthusiasm across the Atlantic ocean.
“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,” wrote Richard Branson in an open letter to employees. “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.”
The billionaire also addressed concerns that many critics have made about his personal wealth, including those that claim he left Britain and settled in the British Virgin Islands for tax purposes. Branson reiterated that without this support from the government, both Virgin Atlantic, as well as Virgin Australia, could end up going out of business.
He even went on to say that his most prized possession, Necker Island, located in the British Virgin Islands, would be offered as loan collateral if needed. However, it’s uncertain whether this will be enough to compel other governments to lend the company the money it so desperately needs.
Virgin Group, which includes Branson’s now private airline Virgin Atlantic, Virgin Australia, as well as Virgin Galactic, Virgin Mobile, Virgin Care, and Virgin Records, employees around 70,000 employees globally. While not every one of these businesses is at risk of potential bankruptcy due to this coronavirus, most of them will be reporting significant revenue declines because of this pandemic.
Virgin Atlantic Company Profile
Virgin America Inc was incorporated in the state of Delaware in 2004. The Company is low-cost airline based in California that provides scheduled air travel in the continental United States and Mexico. It operates from its focus cities of Los Angeles and San Francisco to other business and leisure destinations in North America. It provides a distinctive offering for its passengers, whom it calls guests, that is centered around its brand and its travel experience, while at the same time maintaining a low-cost structure through its point-to-point network and high utilization of its efficient, single fleet type. The principal competitors on domestic routes are Alaska Airlines, American Airlines, Delta Air Lines, JetBlue Airways, Southwest Airlines and United Airlines. Virgin America, the Virgin America logo and the Virgin signature are trademarks of the Company. – Warrior Trading News
