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nonrev
Topic Author
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Updated: Virgin Atlantic creditors aprove restructuring; (files for BK in US Court)

Wed Apr 01, 2020 1:21 pm

Large VS suppliers such as Airbus & Tolls Royce have written to the UK government.

Will the UK Govt support VS? Or will this lead to issues with the rest of the industry? Is the solution consolidation into ‘UK Airlines’ with the government as the major shareholder?

https://news.sky.com/story/coronavirus- ... t-11966892
 
SimProgrammer
Posts: 201
Joined: Thu Aug 19, 2004 1:50 am

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:35 pm

Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.
Drive a bus, an Airbus, easier than a London bus!
 
Armodeen
Posts: 1265
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:44 pm

SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating. While SRB had a before crash net worth of £4bn, it is certainly significantly less now. It’s also mostly tied up in assets, it’s not like he has a literal pile of money on which he sleeps on Necker island as you imply. SRB doesn’t have anything like the sort of money required to save VS, billionaire or not. DL will have enough problems preventing its own collapse and I’m sure cannot bail out other airlines. This is an unprecedented situation.

Also, VS employs 8500 people. Most of those will tell you what a great company they are to work for. How about showing a little empathy and thinking about them?
 
Irishbean
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:49 pm

I think the best solution here for any governments would be to look at a shareholding, they can then sell on at a later date. dilute or remove SRB shareholding/ or Delta. Cash injection is bad use tax payer money and a loan has to be repaid
 
chonetsao
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:50 pm

SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.
 
lukeyboy95
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:51 pm

Just my personal feelings, but I don't think it's right for all airlines to come out of this crisis unscathed.

I took a flight on VS last year, and was blown away by how excellent the staff and product were, and I don't mean anything against those staff, but I do not support a government bailout of VS. We are dealing with an already heavily indebted government that is already paying the nation to self-isolate on very generous terms.

Could VS transition to a charter only operation? It is no longer appropriate for it so serve legacy routes with the highest costs.
Breaking down the stereotypes - one by one
 
sabreliner
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:51 pm

From the article:

In one letter, John Harrison, general counsel and UK chairman of Airbus, warned that Virgin Atlantic's "collapse could have an extremely negative impact on the A330 [aircraft manufacturing] programme".
"As you will be aware, all wings for these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business," Mr Harrison wrote.

VA has 8 A300-900 out of a backlog of 279 according to Wikipedia (https://en.wikipedia.org/wiki/List_of_A ... deliveries). Not that significant unless VA has a large A330 order planned, but VA has mobilised whoever it can to plead it's case.
 
Boof02671
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:56 pm

chonetsao wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.

Delta is trying to survive itself, they have zero cash to spare for VS.
 
jayunited
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 1:57 pm

Armodeen wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating. While SRB had a before crash net worth of £4bn, it is certainly significantly less now. It’s also mostly tied up in assets, it’s not like he has a literal pile of money on which he sleeps on Necker island as you imply. SRB doesn’t have anything like the sort of money required to save VS, billionaire or not. DL will have enough problems preventing its own collapse and I’m sure cannot bail out other airlines. This is an unprecedented situation.

Also, VS employs 8500 people. Most of those will tell you what a great company they are to work for. How about showing a little empathy and thinking about them?


VS is in an interesting position and I personally don't want to see any airline go under but if SimProgrammer's entire comment is true it is going to be difficult to persuade the government to intervene. I would suggest all 8500 Vs employees bombard their local politicians with request to help save their airline and ultimately their jobs. But is will not be easy just look at the cruise industry here in the U.S. they thought they were going to be bailed out then a few people in Congress relented because they are are not U.S. companies and don't pay U.S. taxes and Trump backed down and changed his tune even though thousands of U.S. land based jobs are on the line in states like Florida.

Delta Airlines can't come to VS's rescue so now is the time for all VS employees to band together and make sure the UK government hears their voices so that they don't simply focus on SRB, or the fact that DL owns such a large portion of VS.
 
MIflyer12
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:02 pm

chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?
 
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JannEejit
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:04 pm

Boof02671 wrote:
chonetsao wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.

Delta is trying to survive itself, they have zero cash to spare for VS.


Yes but they OWN 49% of the airline, so where does responsibility begin and end ? I agree with the general comments that Virgin Atlantic staff are generally well appreciated as a happy, diligent work force. But the UK goverment's responsibilty is to the general population right now, not large global businesses. And also noted the negative and opportunist attitude of Virgin, BA and Ryanair to the recent demise of other UK airlines, in terms of government bail outs. If you are going to live by the sword etc etc ?
 
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chepos
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:04 pm

chonetsao wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.

How is DL expected to help? DL up until a couple of weeks back made it public they would request assistance themselves.


Sent from my iPhone using Tapatalk
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Aceskywalker
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:05 pm

lukeyboy95 wrote:
Just my personal feelings, but I don't think it's right for all airlines to come out of this crisis unscathed.

Could VS transition to a charter only operation? It is no longer appropriate for it so serve legacy routes with the highest costs.


With VS's new shiny, but very expensive fleet, unlikely to be sustainable.

As other people have echoed, if the UK is keen to inject money, then it should come at a cost to VS and its owners Sir RB and DL. Maybe the sale of shares that the UK government can sell for a profit if and when VS comes out of the crisis.
 
Scotron12
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:10 pm

SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yip..The Bearded one is quite adept at holding his hand out for public dosh!

His Virgin Money. Then his Virgin Trains he took money then walked away from the contract.
 
Boof02671
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:11 pm

JannEejit wrote:
Boof02671 wrote:
chonetsao wrote:

Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.

Delta is trying to survive itself, they have zero cash to spare for VS.


Yes but they OWN 49% of the airline, so where does responsibility begin and end ? I agree with the general comments that Virgin Atlantic staff are generally well appreciated as a happy, diligent work force. But the UK goverment's responsibilty is to the general population right now, not large global businesses. And also noted the negative and opportunist attitude of Virgin, BA and Ryanair to the recent demise of other UK airlines, in terms of government bail outs. If you are going to live by the sword etc etc ?

They can’t invest any money as they are taking bailout money from the US government and they can’t own anymore of VS by law.
 
davidjohnson6
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:12 pm

Is taking a shareholding necessarily the best outcome for the UK Govt ? I would have thought that a cash bailout in return for sale and leaseback of Heathrow slots would be a better idea...
 
mattyfitzg
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:17 pm

Well the U.K. government already said they’d look at each airline on a case by case basis with no guarantees. I’d imagine companies that pay taxes in the U.K. or provide essential services will be looked upon favourably (Eastern, Loganair, maybe even Jet2 and Titan since theyre wholly British).

I wouldn’t hold my breath for Virgin to get one, but one can always hope
 
Experimental
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:23 pm

MIflyer12 wrote:
chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?



There are very few routes (SEA, LAS, some Caribbean) where VS is BA's only competition.
 
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JannEejit
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:25 pm

Armodeen wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating.


Yes but unfortunately in terms of UK taxpaying public, this is the perception that most will adhere too, come the final reckoning. I think SRB (the public face of Virgin) has created negative headlines in the UK in recent times, especially around his percieved personal wealth, his attempts to sue the NHS and walking away from a new Virgin Trains operator contract because of his unwillingness to underpin the staff pensions scheme associated with the West Coast line franchise renewal.

It may be about to become the world's most expensive case of 'the boy who cried wolf' ?
 
Opus99
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:29 pm

MIflyer12 wrote:
chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?

It’s actually not. On the US side you have delta and united on the east you have the eastern carriers and of course you also have European legacy carriers who might steal some business. Virgin actually does it compete that well with BA. And their record profits in recent years show it. Everywhere you go in this world has another option I always say especially from LHR. You can either go with carrier of the destination you’re going to or connect.
 
Caluma350
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:34 pm

Virgin is a great airlines. I see a lot of ignorance in this feed.

ALL airlines in the UK are currently in discussion with the UK government for support / possibility of bail outs. That includes EasyJet and BA.

ALL these airlines have taken cost cutting measures to ensure their survival.

It really saddens me to see people attack an airlines like Virgin which hasn't always had government support through out the years and have had to stay in business with their competitiveness and offering customers choice and better value for money than their competitors.

I believe Virgin will come out the other side of all this and remain Britains second flag carrier.
 
Opus99
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:35 pm

davidjohnson6 wrote:
Is taking a shareholding necessarily the best outcome for the UK Govt ? I would have thought that a cash bailout in return for sale and leaseback of Heathrow slots would be a better idea...

I doubt the UK government is interested in taking a shareholding in a company that is struggling to make a profit. Virgins business isn’t that viable really when you actually look at the financials. They had 82M of cash going into this debacle and a weak balance sheet. I for one think they should be let go.
 
Caluma350
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:38 pm

Opus99 wrote:
MIflyer12 wrote:
chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?

It’s actually not. On the US side you have delta and united on the east you have the eastern carriers and of course you also have European legacy carriers who might steal some business. Virgin actually does it compete that well with BA. And their record profits in recent years show it. Everywhere you go in this world has another option I always say especially from LHR. You can either go with carrier of the destination you’re going to or connect.


Virgin and BA are the only two full service long haul carriers from the UK, of course they are competitors...

Virgin has the delta connection alliance and BA have an alliance with American Airlines. Virgin competes very well and offers passengers far better value for money than what BA offers.
 
MoonC
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:44 pm

sabreliner wrote:
From the article:

In one letter, John Harrison, general counsel and UK chairman of Airbus, warned that Virgin Atlantic's "collapse could have an extremely negative impact on the A330 [aircraft manufacturing] programme".
"As you will be aware, all wings for these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business," Mr Harrison wrote.

VA has 8 A300-900 out of a backlog of 279 according to Wikipedia (https://en.wikipedia.org/wiki/List_of_A ... deliveries). Not that significant unless VA has a large A330 order planned, but VA has mobilised whoever it can to plead it's case.


Virgin has 14 firm + 6 options on the A330neo.
https://blog.virginatlantic.com/introducing-the-airbus-a330neo-for-our-cleanest-youngest-fleet/
 
Opus99
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:44 pm

Caluma350 wrote:
Opus99 wrote:
MIflyer12 wrote:

VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?

It’s actually not. On the US side you have delta and united on the east you have the eastern carriers and of course you also have European legacy carriers who might steal some business. Virgin actually does it compete that well with BA. And their record profits in recent years show it. Everywhere you go in this world has another option I always say especially from LHR. You can either go with carrier of the destination you’re going to or connect.


Virgin and BA are the only two full service long haul carriers from the UK, of course they are competitors...

Virgin has the delta connection alliance and BA have an alliance with American Airlines. Virgin competes very well and offers passengers far better value for money than what BA offers.

Of course they’re competitors.largest one? I don’t think so. Offering far better value for money? Probably. But it needs to show in the financials for it to matter. BA has an unwavering amount of loyal customers that support its business. Just look at the financials between the two airlines. Virgin competes solely with BA on very few routes by the time you take into account all the other players. I’m listing delta separate from virgin because of the sake of this argument they’ll continue to exist if virgin dies
 
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JerseyFlyer
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:47 pm

The UK government could loan against assets or with shareholder guarantees to ensure they keep skin in the game
 
delimit
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:52 pm

IAG and Virgin are both private companies. Why is one's request for money more valid than the others? SRB may be loathsome, but do you really want the government picking favorites?

I would expect you would see governments looking to preserve the jobs and the service.
 
onwFan
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:57 pm

Experimental wrote:
MIflyer12 wrote:
chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?



There are very few routes (SEA, LAS, some Caribbean) where VS is BA's only competition.

Exactly. Actually, only MIA and LAS come to my mind. In the absence of VS, DL will definitely fly SEA. And even LAS and MIA have competition from LGW through Norwegian. If I am not mistaken, there is not a single route out of LHR flown by VS that is not flown by BA.
Last edited by onwFan on Wed Apr 01, 2020 3:01 pm, edited 1 time in total.
 
Opus99
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 2:59 pm

delimit wrote:
IAG and Virgin are both private companies. Why is one's request for money more valid than the others? SRB may be loathsome, but do you really want the government picking favorites?

I would expect you would see governments looking to preserve the jobs and the service.


I assume when you say private you mean not owned by government then yes. The thing is the government isn’t hot on bailing virgin out because a few reasons. First of all they have to take a look at the business finances to see if an investment is worth it. Secondly, their 50% owned by delta and then you have bransons tax issues which ministers aren’t to hot on so you can call this optics and then there’s the fact that the government has put a lot in place for people who lose their jobs in this period so their employees will be somewhat taken care of. And finally there’s the the idea that operationally they won’t be missed because there’s nowhere that virgin goes that BA does not.
 
Opus99
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:01 pm

JerseyFlyer wrote:
The UK government could loan against assets or with shareholder guarantees to ensure they keep skin in the game

Another thing 75% of their fleet is leased and what they own is the 340-600s which are really not particularly hot on the market right now. So it’s even difficult to do that, which is why couldn’t generate money from sale and leasebacks
 
A330Inter
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:05 pm

Is corporate traffic still relevant for VS? if it even was at any point in time?
Why keep fighting at LHR and not concentrate on MAN or secondary UK airport, which BA completely abandoned?
 
JamesCousins
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:08 pm

JannEejit wrote:
and walking away from a new Virgin Trains operator contract because of his unwillingness to underpin the staff pensions scheme associated with the West Coast line franchise renewal.


I'm by no means the biggest Branson fan, but this disingenuous. They said it was not financially viable to bid for a franchise under the terms of underpinning the expensive BritishRail pensions, and they may well be right. Virgin Trains left at the end of the agreed contract term when the whole thing was up for tender again anyways and had just as much chance as being awarded to someone else. VTWC did a huge amount of good for the WCML, earned a lot of money doing so, but created some of the most drastic rail improvements (eventually) a single UK franchise has ever seen.

This constant Branson-bashing is boring. Attack him for the stuff with substance.
Q400, A320-200, A321-200, 737-500, 737-800, 747-400, 757-200, 787-9 // FCA, TOM, TUI, MON, MT, BA, VS, DL, BE, X9, OLY // Upcoming: W6 A320, W6 A321, EVA 77W, VS 787-9m AS A320, VS A35K, KLM E190, KLM 738, LS 737
 
JamesCousins
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:10 pm

A330Inter wrote:
Is corporate traffic still relevant for VS? if it even was at any point in time?
Why keep fighting at LHR and not concentrate on MAN or secondary UK airport, which BA completely abandoned?


Yes - on a weekday, term time particularly their UC cabin is dominated by it. Virgin have been putting an increased focus on MAN, expanding to more and more routes and increasing frequencies but there is no where enough demand to support even 20 or 30 of their 40+ widebody fleet there. It isn't Heathrow that has put them in this mess - they earn some good fares on many of their Transatlantic LHR routes, it's the current global pandemic.
Q400, A320-200, A321-200, 737-500, 737-800, 747-400, 757-200, 787-9 // FCA, TOM, TUI, MON, MT, BA, VS, DL, BE, X9, OLY // Upcoming: W6 A320, W6 A321, EVA 77W, VS 787-9m AS A320, VS A35K, KLM E190, KLM 738, LS 737
 
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Revelation
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:13 pm

MoonC wrote:
sabreliner wrote:
VA has 8 A300-900 out of a backlog of 279 according to Wikipedia (https://en.wikipedia.org/wiki/List_of_A ... deliveries). Not that significant unless VA has a large A330 order planned, but VA has mobilised whoever it can to plead it's case.

Virgin has 14 firm + 6 options on the A330neo.
https://blog.virginatlantic.com/introducing-the-airbus-a330neo-for-our-cleanest-youngest-fleet/

The discrepancy arises because VA itself has ordered 8 and is taking 6 from lessor ALC.
Ref: https://www.airbus.com/newsroom/press-r ... nsion.html

I flew VS on BOS-LHR a year or two ago and it was a nice service on a 787, and was good value for money as well, good enough to afford whatever they are now branding Y+.

I do hope they find the money to make it through, but do wonder if they will. It's pretty clear most of 2020 is now a write off. I can't see how they survive unless they get a bailout. Once the market restarts they will be facing better funded competitors very hungry to compete. It won't be pretty. Their best hope is the UK government giving them a lifeline.
Last edited by Revelation on Wed Apr 01, 2020 3:18 pm, edited 1 time in total.
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oceanvikram
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:14 pm

chepos wrote:
chonetsao wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


Yes I fully agree.

Virgin parent company should be asked first. Since Richard Branson owns 51% of the company, he must use his own money to support his own company. Delta owns 49%, Delta should help as well.

Richard Branson has enough money to support VS if he starts to sell stakes in his space company.

VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.

What VS did to Flybe should always be remembered.

How is DL expected to help? DL up until a couple of weeks back made it public they would request assistance themselves.


Sent from my iPhone using Tapatalk


I’ll try that with the bank regarding my mortgage. What do you think will happen?
My comments are based as an aviation enthusiast first, then as a passenger who paid for his own ticket, after that a passenger on a business trip and finally an armchair CEO.
 
JAMBOJET
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:20 pm

MIflyer12 wrote:
chonetsao wrote:
VS is not critical to UK economy as its routes are covered by other airlines. It should be rescued by its shareholder, not the UK government.


VS is the largest single competitor to BA long-haul, is it not? Do you think passengers will be happy paying BA prices in an environment with less competition?

Heathrow has an enormous amount of competition if VS goes under. LHR would still have more competition than AMS, FRA, and MUC, at least. Looks as though it would be close to tied with AMS: https://crankyflier.com/2019/11/07/iag- ... quisition/
To say nothing of the MANY london airports that also provide competition to BA at Heathrow/Gatwick.
 
Nicknuzzii
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:21 pm

If they were trying to preserve cash they shouldn’t have been running 4x daily JFK-LHR last week. Their EWR cut was a little premature too.
 
seansasLCY
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Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:27 pm

Caluma350 wrote:
Virgin is a great airlines. I see a lot of ignorance in this feed.

ALL airlines in the UK are currently in discussion with the UK government for support / possibility of bail outs. That includes EasyJet and BA.

ALL these airlines have taken cost cutting measures to ensure their survival.

It really saddens me to see people attack an airlines like Virgin which hasn't always had government support through out the years and have had to stay in business with their competitiveness and offering customers choice and better value for money than their competitors.

I believe Virgin will come out the other side of all this and remain Britains second flag carrier.


BA is not in talks for a bailout. They don’t want to see a bailout. They publically opposed it and said they have cash and credit available up to $9billion to see them through. Nobody is attacking Virgin Atlantic. They are attacking their owners who think it is the taxpayer’s job to fund their profits.

If any money is given to Virgin, or any other airline, it should be in exchange for a stake in that airline just like we did with Lloyds and RBS when we bailed them out. Then when things improve we can sell off those shares and recoup the money. Of course, this waters down SRB stake so either he puts up or hands over equity for the cash.
 
raylee67
Posts: 889
Joined: Mon Oct 24, 2011 11:06 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:27 pm

The governments did it with banks in 2008/09. Same can be done. The airlines issue preferred shares for government to buy. Preferred shares come with promise to pay good dividend (ahead of common shares receiving any dividend). The preferred shares can also come with options for the company to buy back at a fixed price after X years (or at any time). Strings should be attached too, such as no bonus for executives as long as the preferred shares are still outstanding.

That way, the company can get the cash flow now. The government doesn't lose out since it will be paid dividend when the economy bounces back and VS (or the airlines in general) turns a profit. And the executives have the incentive to buy back these preferred shares as soon as they can get the money from the market since they don't get bonus until they kick the government out. So the ownership (and risk) to governments are short term and minimal, which is the goal.

It should be noted that the airlines (and ALL of us) are in current situation because the governments (almost all of them) acted too slow to mitigate the disaster. Asking for the governments to bail out for a short period of time, especially during the time that the governments are telling people not to fly, isn't that outrageous.
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User avatar
JannEejit
Posts: 1648
Joined: Sat Jun 18, 2016 4:04 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:32 pm

JamesCousins wrote:
JannEejit wrote:
and walking away from a new Virgin Trains operator contract because of his unwillingness to underpin the staff pensions scheme associated with the West Coast line franchise renewal.


I'm by no means the biggest Branson fan, but this disingenuous. They said it was not financially viable to bid for a franchise under the terms of underpinning the expensive BritishRail pensions, and they may well be right. Virgin Trains left at the end of the agreed contract term when the whole thing was up for tender again anyways and had just as much chance as being awarded to someone else. VTWC did a huge amount of good for the WCML, earned a lot of money doing so, but created some of the most drastic rail improvements (eventually) a single UK franchise has ever seen.

This constant Branson-bashing is boring. Attack him for the stuff with substance.


I'm not arguing with you, I'm attempting to explain his chances of winning the UK taxpayer over in terms of sympathy and perception.

He is 'painted' as withdrawing from bidding for a WCML franchise renewal because of the pensions issue. In the public eye, that's walking away. Some people probably don't appreciate having their pension scheme being used as a bargaining chip. The lack of empathy for Thomas Cook and Flybe employees may not help his cause either.
 
User avatar
Aesma
Posts: 13149
Joined: Sat Nov 14, 2009 6:14 am

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:38 pm

jayunited wrote:
Armodeen wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating. While SRB had a before crash net worth of £4bn, it is certainly significantly less now. It’s also mostly tied up in assets, it’s not like he has a literal pile of money on which he sleeps on Necker island as you imply. SRB doesn’t have anything like the sort of money required to save VS, billionaire or not. DL will have enough problems preventing its own collapse and I’m sure cannot bail out other airlines. This is an unprecedented situation.

Also, VS employs 8500 people. Most of those will tell you what a great company they are to work for. How about showing a little empathy and thinking about them?


VS is in an interesting position and I personally don't want to see any airline go under but if SimProgrammer's entire comment is true it is going to be difficult to persuade the government to intervene.


I think you mean the UK public.

The current UK government is in love with these kind of people, same with Dyson.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
BrianWilkes
Posts: 56
Joined: Mon Jul 16, 2018 12:03 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:41 pm

Every Airline is facing collapse! Period.....
 
ltbewr
Posts: 15209
Joined: Thu Jan 29, 2004 1:24 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:46 pm

There is need for VS to survive, perhaps as a smaller airline with fewer planes and airports served once the Covid-19 crises has passed. Survival is important for the business travel and tourism industries, to help hold down peak demand fares, assure sufficient capacity once there is some moderate recovery and to keep as many employed at the airline as possible.
 
KingB123
Posts: 191
Joined: Mon Feb 19, 2018 10:30 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:47 pm

If the ginger at necker island doesn’t want to pay up. Good riddance to Virgin. Our tax payers money needs to spent on our health service during this crisis and not a failing private airline that provides no benefit to the MAJORITY of British Nationals x
King B
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:48 pm

raylee67 wrote:
The governments did it with banks in 2008/09. Same can be done. The airlines issue preferred shares for government to buy. Preferred shares come with promise to pay good dividend (ahead of common shares receiving any dividend). The preferred shares can also come with options for the company to buy back at a fixed price after X years (or at any time). Strings should be attached too, such as no bonus for executives as long as the preferred shares are still outstanding.

That way, the company can get the cash flow now. The government doesn't lose out since it will be paid dividend when the economy bounces back and VS (or the airlines in general) turns a profit. And the executives have the incentive to buy back these preferred shares as soon as they can get the money from the market since they don't get bonus until they kick the government out. So the ownership (and risk) to governments are short term and minimal, which is the goal.

It should be noted that the airlines (and ALL of us) are in current situation because the governments (almost all of them) acted too slow to mitigate the disaster. Asking for the governments to bail out for a short period of time, especially during the time that the governments are telling people not to fly, isn't that outrageous.


Propping up the banks was difference as way more than 8500 would have been effected if they went to the wall.
 
delimit
Posts: 840
Joined: Fri Jan 09, 2009 8:08 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:50 pm

Opus99 wrote:
delimit wrote:
IAG and Virgin are both private companies. Why is one's request for money more valid than the others? SRB may be loathsome, but do you really want the government picking favorites?

I would expect you would see governments looking to preserve the jobs and the service.


I assume when you say private you mean not owned by government then yes. The thing is the government isn’t hot on bailing virgin out because a few reasons. First of all they have to take a look at the business finances to see if an investment is worth it. Secondly, their 50% owned by delta and then you have bransons tax issues which ministers aren’t to hot on so you can call this optics and then there’s the fact that the government has put a lot in place for people who lose their jobs in this period so their employees will be somewhat taken care of. And finally there’s the the idea that operationally they won’t be missed because there’s nowhere that virgin goes that BA does not.

I think my point is that bailing out airlines isn't about saving corporations; it's about saving the things those corporations provide: jobs, travel capacity, competition within the industry, etc. IAG is 25% owned by QR as well, no?
 
KingB123
Posts: 191
Joined: Mon Feb 19, 2018 10:30 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:50 pm

Armodeen wrote:
SimProgrammer wrote:
Persuading the UK to prop up a company owned by a tax-dodging expat sitting on a £4bn pile and a US major with shareholders hungry months to feed, will be difficult.


This opinion is popular but a little grating. While SRB had a before crash net worth of £4bn, it is certainly significantly less now. It’s also mostly tied up in assets, it’s not like he has a literal pile of money on which he sleeps on Necker island as you imply. SRB doesn’t have anything like the sort of money required to save VS, billionaire or not. DL will have enough problems preventing its own collapse and I’m sure cannot bail out other airlines. This is an unprecedented situation.

Also, VS employs 8500 people. Most of those will tell you what a great company they are to work for. How about showing a little empathy and thinking about them?


Sorry but how about you also save a penny for your thoughts for the other airline employees who lost their jobs in the UK Due to their employer collapsing. Or are they treated differently?
King B
 
Boeing74741R
Posts: 1400
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:51 pm

JamesCousins wrote:
JannEejit wrote:
and walking away from a new Virgin Trains operator contract because of his unwillingness to underpin the staff pensions scheme associated with the West Coast line franchise renewal.


I'm by no means the biggest Branson fan, but this disingenuous. They said it was not financially viable to bid for a franchise under the terms of underpinning the expensive BritishRail pensions, and they may well be right. Virgin Trains left at the end of the agreed contract term when the whole thing was up for tender again anyways and had just as much chance as being awarded to someone else. VTWC did a huge amount of good for the WCML, earned a lot of money doing so, but created some of the most drastic rail improvements (eventually) a single UK franchise has ever seen.

This constant Branson-bashing is boring. Attack him for the stuff with substance.


This.

If you were asked to write a blank cheque to cover pension liabilities, would you agree to it?

Another little fact that people keep forgetting is that in the last West Coast franchise competition Virgin was a 20% minority partner in a bid with Stagecoach (50%) and SNCF (30%). It wasn't like the 1997-2019 franchise where Virgin was a 51% majority owner. If that bid had won, the Virgin name would still be on trains in the UK now. Stagecoach also no longer has any involvement in UK rail and they too were excluded from the East Midlands franchise competition over pension liabilities. I'll stop there though as facts don't suit certain agendas, plus there's a lot of people here and elsewhere who know little about how rail franchising works.
 
Boeing74741R
Posts: 1400
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:55 pm

JannEejit wrote:
He is 'painted' as withdrawing from bidding for a WCML franchise renewal because of the pensions issue. In the public eye, that's walking away. Some people probably don't appreciate having their pension scheme being used as a bargaining chip.


Factually wrong. The DfT were asking bidders to essentially agree to an unlimited figure worth of pension liabilities, the consortium that Virgin was involved in challenged that requirement as they weren't prepared to accept that (understandable given how pension liabilities have crippled even the biggest of organisations over the years and is why final salary pension schemes are rare nowadays), the DfT then excludes the consortium Virgin was involved in on the grounds of the bid being non-compliant.

That is completely different to walking away. Still, if that doesn't suit the narrative then carry on.
 
KingB123
Posts: 191
Joined: Mon Feb 19, 2018 10:30 pm

Re: Virgin Atlantic facing collapse

Wed Apr 01, 2020 3:57 pm

Caluma350 wrote:
Virgin is a great airlines. I see a lot of ignorance in this feed.

ALL airlines in the UK are currently in discussion with the UK government for support / possibility of bail outs. That includes EasyJet and BA.

ALL these airlines have taken cost cutting measures to ensure their survival.

It really saddens me to see people attack an airlines like Virgin which hasn't always had government support through out the years and have had to stay in business with their competitiveness and offering customers choice and better value for money than their competitors.

I believe Virgin will come out the other side of all this and remain Britains second flag carrier.


Just out of curiosity, did it not make you sad that employees of flybe, thomas cook etc etc lost their jobs?
King B
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