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Richard Branson says Virgin Atlantic will collapse without government support

April 20, 2020
3 min read
Richard Branson says Virgin Atlantic will collapse without government support
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Virgin Atlantic founder Richard Branson said on Monday that the airline would not survive the coronavirus crisis if it didn't get financial support from the government.

"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," Branson said in an open letter to Virgin employees. "This would be in the form of a commercial loan — it wouldn't be free money and the airline would pay it back."

Last month, Virgin Atlantic asked for a £500 million bailout, which was rejected by the government. On Friday, the Financial Times reported that the airline's first bid had been rejected by the government and was told it needed to explore other ways to raise money before seeking a bailout.

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Virgin Atlantic, which is based in the U.K., is 51% owned by Branson's own Virgin Group. The other 49% is owned by Delta Air Lines.

In his letter, Branson dismissed the argument that he should be paying from his personal wealth to save the airline, rather than relying on government funding.

"I’ve seen lots of comments about my net worth – but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw," Branson wrote.

Branson offered his famed Necker Island as collateral in an attempt to secure funding from the government. In his note, Branson said he would "raise as much money against the island as possible to save as many jobs as possible around the Group".

According to The Guardian, Branson pledged to inject $250 million into the Virgin Group. Of that money, $100 million is thought to be for Virgin Atlantic.

"Today, the cash we have in the Virgin Group and my personal wealth is being invested across many companies around the world to protect as many jobs as possible, with a big part of that going to Virgin Atlantic."

Prior to Branson's plea, the airline had taken a number of cost-cutting measures, including employees taking a wage reduction for eight weeks.

On Monday, another member of the Virgin Group, Virgin Australia, was reported to have entered voluntary administration.

Featured image by Bloomberg via Getty Images

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TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

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  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
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  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

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  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases