Major airlines all over the world are feeling the pinch due to the coronavirus. With most airlines only offering a handful of flights a day, it's easy to see why they are struggling financially. Virgin Atlantic is one of those airlines, and it may go under without government support.
Earlier this week, billionaire and founder of Virgin Atlantic, Sir Richard Branson, posted an open letter on Virgin's website. In the open letter, Branson claimed that while the airline is doing everything it can to keep afloat, without a commercial loan from the government, Virgin Atlantic is unlikely to survive. This comes as Virgin Australia entered voluntary administration.
Branson is hoping for £500 million in government support. It wouldn't be in the form of a handout and instead would be like any other loan that would need to be paid back. Given that Branson has substantial wealth, he also offered up his luxury island in the Caribbean as collateral. While Virgin Atlantic had previously applied for financial aid, the airline hasn't received a response. However, EasyJet just applied for and has received a £600 million government loan. EasyJet used its aircraft fleet as collateral.
Virgin Atlantic has taken a host of cost-cutting measures in order to stay afloat. The airline grounded 75 percent of its fleet in late March and by mid-April that number rose to around 85 percent. Virgin Atlantic is also forcing most employees to take eight weeks of leave, unpaid, over the next three months.
If Virgin Atlantic goes under, not only would it be devastating for employees, but flyers in the United States who want affordable tickets for flights to and from Europe would lose another option. In normal times, the airline has ten U.S. destinations, and with its partnership with Delta Air Lines, travelers can easily connect to over 200 destinations throughout the United States. For those who don't already know, Delta has a 49% stake in Virgin Atlantic.