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Richard Branson Wants UK Gov to Bailout Virgin Atlantic

Ben Dolbear on the demise of Virgin Atlantic instigated by a slump in demand thanks to the COVID-19 pandemic.

Photo by Julia Khalimova

Virgin Group has opened a month-long round of emergency conversations with staff as over 3,000 jobs are set to be permanently cut as demand for international flights drops by 94%, with numbers not expected to fully recover until at least 2023.

With a dark future looking likely for Virgin Atlantic, majority owner Richard Branson, who is estimated by Forbes to be worth over £4.5 billion, has made a plea to the British government to prop up the firm while it gets back on its feet.

Virgin, a brand initially associated with music records, launched its first flight across the Atlantic Ocean on 22nd June, 1984, after Branson saw opportunity to take on state-controlled British Airways after free marketeer Margaret Thatcher took over the premiership of the UK government. In more recent years, Virgin Atlantic has struggled, and in 2014 the firm registered pre-tax losses of £174.7m whilst net debt stood at over half a billion pounds.

But earlier this month, 69-year-old Branson approached the British state, asking for a bailout of £500 million, offering his private Caribbean island as collateral. Branson's optimistic request is likely initiated by the generous comparable loans being made to airlines in the United States, with the New York Times reporting that companies will receive over $25 billion in the coming months.

The Impact of Fossil Fuels

But climate advocates have argued that billionaires like Branson should focus on cutting their carbon emissions rather than increasing unsustainable capacity. Legal representatives for environmental charity Possible have taken the rare step of writing to Conservative Chancellor Rishi Sunak asking him to promise that any funding going into the aviation industry has conditions attached to ensure that there are 'meaningful emissions cuts' from planes.

In addition to environmental concerns, economic observers have pointed out that Branson has paid no form of personal income tax in the United Kingdom since his move to the British Virgin Islands over fourteen years ago, with some arguing that some of the business moguls personal wealth should go towards saving Virgin. Some have also pointed out the irony in Branson's requests to the government after one decade old comments emerged showing that he once opposed state bailouts in the aviation sector. Branson said:

'I think other companies [not banks] need to stand on their own two feet, and the weak ones need to go to the wall'.

In 2006, advocates for the environment criticised Virgin Atlantic for its initiative to fight climate change by planting trees to offset emissions released by limousines driving customers to the airport. At the time, campaigners said the move would be 'barely a drop in the ocean' when looked at in the context of Virgin's fleet of 33 aircraft.

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