Richard Branson offers his private island as collateral to save Virgin Atlantic from bankruptcy
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Like many airlines around the world, billionaire Richard Branson’s Virgin Atlantic is experiencing significant financial difficulties as 85% of its aircraft are grounded with the coronavirus crisis.
As a first step, the airline asked its staff to take eight weeks of unpaid leave over the next three months to avoid layoffs. But, the billionaire needs cash to avoid total bankruptcy of the company. He would have asked the British government for a loan estimated at 572 million euros while Virgin Australia, the Australian airline company he launched in 2000, has already announced that it has been placed in suspension of payments.
In an open letter to the entire Virgin group, Richard Branson said he gave his private island Necker, which is located in the British Virgin Islands, as collateral to save Virgin Atlantic. “As with the other assets of Virgin, our team will be raising as much money as possible in exchange for the island in order to save as many jobs as possible within the group,” he said. This Necker Island is a small paradise of almost 30 hectares in the British Virgin Islands which is used as a luxury resort for up to 30 people.
“Together with the Virgin Atlantic team, we will do everything we can to keep the airline in business but we will need government support to make it happen, given the great uncertainty surrounding travel today and the fact that we don’t know how long the planes will be on the ground, ”he explained adding:“ The reality of this unprecedented crisis is that many airlines around the world need government support and a lot have already received it. « And ensure that the loan requested will be » repaid « .
In his letter, Richard Branson also notes that the Virgin group operates in several sectors that are among the most affected by the coronavirus. In addition to aviation, Virgin has activities in recreation, hotels and cruises. “We have over 70,000 people in 35 countries who work for Virgin companies. We are doing everything we can to keep these companies afloat, ”he insisted.
But not all airlines are headed by a billionaire. As commercial airlines go through the biggest crisis in its history, the list of companies declaring bankruptcy begins to grow. After the closure of several Norwegian subsidiaries, the end of the airline South African Airways now appears inevitable with a plan to lay off some 4,700 employees proposed by the directors. The same goes for the CityJet airline, which has filed for creditor protection, not having the means to survive the coronavirus pandemic without help. The Dublin-based company specializing in crewed rental (ACMI) and which flies in particular on behalf of Aer Lingus and SAS Scandinavian Airlines.
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