Dhaka: Majority Virgin Atlantic owner Richard Branson has urged the UK government to support the carrier during the coronavirus crisis with loan assistance.
However, meanwhile, the airline can no longer count on further investment from Delta, which has a 49 per cent stake in Virgin Atlantic, as it struggles to remain solvent.
In an open letter to Virgin Group employees this week, Branson pledged to do everything possible to keep the airline going, including borrowing against his private Necker Island, where he lives in the British Virgin Islands.
But Branson also said Virgin Atlantic, which has halted all passenger service for the remainder of this week, will need government support. The assistance, he said, should come in the form of an interest-bearing loan.
"The reality of this unprecedented crisis is that many airlines around the world need government support, and many have already received it," Branson wrote. "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."
On April 22, Ed Bastian, CEO of Delta said he was confident Virgin Atlantic would survive. But he also said Delta cannot invest further in the carrier, both because of the UK laws restricting foreign ownership of an airline to 49 per cent and Delta's own economic challenges.
British airlines face a tougher landscape for government aid than carriers faced in the US, or are facing in many other countries. The government's harder-line stance on aid has been propped up by British Airways and its parent, International Airline Group, which have looked askance at state aid. Still, the UK-based discount carrier EasyJet did secure a loan of USD 740 million from the UK Treasury this month.
Virgin Australia, of which the Virgin Group is a 10.4 per cent owner, entered into voluntary administration proceedings this week, the Australian equivalent of bankruptcy restructuring.