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In truth Virgin Atlantic was branded “underperforming” by SIA who once held a 49 per cent stake.
How many people realise that fact today ?
Eventually SIA sold its shareholding to DL. It made a substantial loss on the sale.5 May 2020
In the BT article in ‘News’ about 3,000 (actually 3,150) job losses at Virgin Atlantic, we see (quote) “Shai Weiss, CEO, Virgin Atlantic commented: “I wish it was not the case, but we will have to reduce the number of people we employ. The commitment of our people throughout this crisis has been nothing but amazing, and the embodiment of true Virgin spirit… I have been humbled at every step by their solidarity. In times of adversity we must support each other…”…”
That’s laying it on a bit thick, isn’t it??
In the same article we read this from BALPA, “The news of over 3000 proposed job losses at Virgin Atlantic is devastating for those who work for the airline…”
That is a major mismatch / differing slant on the news between the Virgin spokesperson and BALPA.6 May 2020
I’m torn on this one. Old Beardie was the first to moan (in fact he mostly moans about everything) when in the past bailouts were offered to other airlines. He sued the NHS because he could not bid, or his beid was refused (can’t quite remember) but he got a few million £’s from the NHS budget. Ditto Virgin trains in the past etc. So I can understand the government’s reluctance to offer him a bean.
On the other hand there are 10,000 jobs at stake, not to mention all the ancillary jobs that provide services to VS that will go, and of course the effect it will have on LGW. If it takes a year for them all to find work again, that will cost the government a lot more than the £500 million he’s asking for. So let him have the loan, not a grant, 2% above base, repayable in 5 years, no dividend or royalty payments, a government official or two on the board till repaid, and guaranteed personally by him.6 May 2020
[quote quote=998286]So let him have the loan, not a grant, 2% above base, repayable in 5 years, no dividend or royalty payments, a government official or two on the board till repaid, and guaranteed personally by him.[/quote]
I have to disagree. Give Virgin Atlantic £500 million and immediately $200 million will “repay a loan” to DL (49% owner) that was due 31/3 and probably about £20 million for naming rights to Virgin Group. (The £20 million is a guess based on Virgin Australia paying Aus$10 million to Virgin.) The ONLY way I would be happy with the government loaning VS any money is in return for either 51% or alternatively a lower percentage plus a Golden share to prevent the owners finding ways to milk VS. I can’t imagine either owner agreeing to such as we may then discover that VS is de facto the UK subsidiary of Delta Airlines.6 May 2020
“I have to disagree. Give Virgin Atlantic £500 million and immediately $200 million will “repay a loan” to DL (49% owner) that was due 31/3 and probably about £20 million for naming rights to Virgin Group.”
The loans from the Spanish Government is similar and the loans are specifically for Iberia and Vueling. They cannot be sent up to IAG, or accross to EI or BA.
The conditions of a loan to Virgin can stipulate no upward or outward movement of funds which can only be used for specified purposes. On the other hand one could argue that 10,000 jobs lost at VS would be picked up by BA so no loans needed to either:-)
1 user thanked author for this post.6 May 2020
The OP was about protecting Virgin Atlantic Flying Club Miles and not ‘should Virgin be supported by the UK Government’.
To answer the OP, I would transfer the miles out to one of the transfer partners, such as a hotel group. I’ve always done that with FC miles as they aren’t much use for booking flight with – too many added taxes and you don’t then earn miles nor status when you fly. It’s the only reason I fly BA long haul as the Avios are so useful when flying within Europe.
To answer the hijacked part of the thread, I don’t want to see VA go bust and would happily agree to the Uk Government lending them money. Better to keep 10,000 in employment even if the actual airline doesn’t make much of a profit. They are also my favourite airline to fly. If the UK can lend Wizz Air money, they can surely do the same for Virgin.
1 user thanked author for this post.7 May 2020
christopheL, I did not say that BA should employ 10,000 Virgin employees. I said that 10,000 jobs could be picked up. Throughout the EU it is always a position in a company that is made redundant, not a person.7 May 2020
It is not a question of stupid, or people.
Virgin Atlantic is almost exclusively long haul and is A330 / 350 and Boeing 747 / 787. BA is a mixture of long haul and short haul and has a fleet of around 280 aircraft of which around half are short haul. Flight crew and cabin crew qualified for short haul (A319/20/21) are probably not also qualified for long haul aircraft. Thus, it can be necessary to make the positions of crew on short haul redundant, but need to employ qualified staff for long haul.
In the unlikely (?) event of Virgin closing, BA would want to pick up routes, and these would be long haul, not short haul. Of course the company would prefer to employ staff already employed by BA, but is may not be possible, as they may not, in the immediate future, be qualified for long haul. Thus, BA may need to make short haul positions redundant, while employing crew for long haul.7 May 2020
Why would they pick up the assets? They have their own aircraft sitting unused and are getting rid of their own staff as fast as they can. I must be missing something here.
The only asset of interest is I imagine the slots at Heathrow.
1 user thanked author for this post.9 May 2020
Here is a link to the Bloomberg piece last night by Chris jasper.
“Virgin Atlantic Airways Ltd. will begin pitching to potential investors Monday as it seeks to avoid collapse with air travel effectively grounded and the U.K. government reluctant to provide emergency funding, a person with knowledge of the situation said.”10 May 2020