Virgin Atlantic is reported to be seeking new shareholders this week as the pandemic crisis causes airlines around the world to seek new sources of funding.
Founder and part-owner Richard Branson has previously said that the majority of his cash injection of $250 million into the Virgin Group would go to the airline, but is now understood to be prepared to increase this.
Originally Virgin tried to get support from the UK government, similar to that received by Easyjet.
The UK government was reported to be ‘unimpressed’ by this application, and required further evidence of Virgins seeking money from its shareholders.
In the video below, aviation consultant, John Strickland, discusses the situation at Virgin.
A significant shareholder of Virgin Atlantic is Delta Air Lines, which owns 49 per cent. CEO Ed Bastian has, however, said that ownership rules would not permit further injection into the airline, and since Delta is already receiving funds from the US Federal government, it is unlikely to feel able to support Virgin Atlantic.
So this weekend there were multiple reports that Virgin was looking for new funding.
The Telegraph reported that the airline was ’racing to find a buyer’.
This backs up the Financial Times report that the airline had hired investment bank Houlihan Lokey, but the FT quotes a Virgin Group spokesperson saying that the Group is not looking to sell the airline, but rather is “working with Houlihan Lokey to approach private investors about the investment opportunity”.
The hope for travellers is that if this is successful, then it may help Virgin to both access new funding, and perhaps convince the government that it has done all it can and so should be able to receive UK taxpayer assistant via the UK government.
Sir Richard Branson has taken to social media to dispel ‘myths’ about the Virgin Group and his personal wealth.
But the appeal has not been well received, and there are currently 600,000 signed up to a petition by former MP Chris Williamson “Boris Johnson PM: Ensure Sir Richard Branson sells private assets before being bailed out by the Government.”.
Sir Richard is perhaps correct about the challenges facing the airlines, as demonstrated by the fate of Virgin Australia.