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Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 8:34 am

sevenheavy wrote:
DobboDobbo wrote:
As I’ve said, I don’t think you know what you are talking about and I don’t think you are what you profess to be.

Dmoney wrote:
I work in corporate finance.


This is what you are holding yourself out as being. You do not state what role, but I assume you would not profess (or admit?) to being the cleaner. However, you do not seem to understand how VS’s business works and how it returns value to the Virgin group amongst others.

Dmoney wrote:
VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.


Dmoney wrote:
Virgin was a zombie company going into this kept alive by low interest rates as they've never consistently earned a return on capital which justifies their existence.


Dmoney wrote:
It wasn't a profitable business going into the crisis, it goes under now. That's capitalism, get over it. Creative destruction.


Leaving aside your apparent lack of understanding of the term “creative destruction”, or the difference between “profitability” and “viability” or why businesses exist, would you agree it is a material oversight for someone in the corporate finance world to have not understood the royalty payment arrangements and how that affects profitability?

You also seem to have a confused position on whether Branson is “actually rich”. See below.

Dmoney wrote:
Or Branson whining like a little girl that it's unreasonable to ask him to liquidate assets in a distressed market. Turns out the chap is broke. Because being ACTUALLY rich means you are liquid. If you aren't rich enough to have 200 million in liquid securities then your just another leveraged liar fronting you have money when you don't?


Leaving aside the unsophisticated language, you do realise (I’m sure you do - you work in “corporate finance”) it is possible to be cash rich but asset poor and vice versa?

In any event, you may wish to hear that Bransons Virgin Group has already committed 250m dollars to help various Virgin companies tackle Coronavirus. By your own standard, Branson is not a leveraged liar but is “actually rich”. See link below.

https://www.virgin.com/richard-branson/ ... -employees

The premise of your position on him seems to be fundamentally wrong, unless you are now going to revise your criteria?


Personally, I think you are against VS not because of any financial reason as asserted, but because you have a personal animosity to either Branson, or anyone successful. You also appear to have some form of British prejudice.

This is demonstrated by by the following examples (there are many more like this):

Dmoney wrote:
You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people.


Dmoney wrote:
Why do you lot all hate unions and the working man but want to give a bailout to rich capitalists?


Dmoney wrote:
Branson can go jump off a bridge the tax dodging narcissist.


Dmoney wrote:
Branson is a tax exile so he doesn't pay tax. Tax is for small people.


Dmoney wrote:
Why are you so desperate to suck up to rich people? Why is it socialism for the rich but Brits starving to death because their benefits have been cut.



To summarise, I’ve got no issue with you holding the opinion that VS should be allowed to fail and to dislike Richard Branson. But be honest about it. You’re new in here, pease don’t pretend to be something you are obviously not, because the faux financial rationale you keep pushing is transparently wrong, fools no one and devalues your input.


Great post. Couldn’t agree more. Too much of this thread is taken up by a handful of people who seem unable to separate their dislike or envy of SRB from the airline and the people who depend on it, either to take holidays, visit families or indeed to keep a roof over their head.


Indeed. It's sickening that some on here are desperate to see people lose their jobs because they don't like the founder. :roll:

If any VS staff are reading this, please be assured you have my support and I'm keeping my fingers crossed for a positive outcome for you.
 
sevenheavy
Posts: 969
Joined: Tue Mar 23, 2004 3:30 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 8:55 am

Dmoney wrote:
DobboDobbo wrote:
As I’ve said, I don’t think you know what you are talking about and I don’t think you are what you profess to be.

Dmoney wrote:
I work in corporate finance.


This is what you are holding yourself out as being. You do not state what role, but I assume you would not profess (or admit?) to being the cleaner. However, you do not seem to understand how VS’s business works and how it returns value to the Virgin group amongst others.

Dmoney wrote:
VS is not a viable airline at the best of times. They've made a big loss over the last 5 years.


Dmoney wrote:
Virgin was a zombie company going into this kept alive by low interest rates as they've never consistently earned a return on capital which justifies their existence.


Dmoney wrote:
It wasn't a profitable business going into the crisis, it goes under now. That's capitalism, get over it. Creative destruction.


Leaving aside your apparent lack of understanding of the term “creative destruction”, or the difference between “profitability” and “viability” or why businesses exist, would you agree it is a material oversight for someone in the corporate finance world to have not understood the royalty payment arrangements and how that affects profitability?

You also seem to have a confused position on whether Branson is “actually rich”. See below.

Dmoney wrote:
Or Branson whining like a little girl that it's unreasonable to ask him to liquidate assets in a distressed market. Turns out the chap is broke. Because being ACTUALLY rich means you are liquid. If you aren't rich enough to have 200 million in liquid securities then your just another leveraged liar fronting you have money when you don't?


Leaving aside the unsophisticated language, you do realise (I’m sure you do - you work in “corporate finance”) it is possible to be cash rich but asset poor and vice versa?

In any event, you may wish to hear that Bransons Virgin Group has already committed 250m dollars to help various Virgin companies tackle Coronavirus. By your own standard, Branson is not a leveraged liar but is “actually rich”. See link below.

https://www.virgin.com/richard-branson/ ... -employees

The premise of your position on him seems to be fundamentally wrong, unless you are now going to revise your criteria?


Personally, I think you are against VS not because of any financial reason as asserted, but because you have a personal animosity to either Branson, or anyone successful. You also appear to have some form of British prejudice.

This is demonstrated by by the following examples (there are many more like this):

Dmoney wrote:
You haven't grasped you are asking for a bailout for rich tax dodgers paid for by dirt poor British people.


Dmoney wrote:
Why do you lot all hate unions and the working man but want to give a bailout to rich capitalists?


Dmoney wrote:
Branson can go jump off a bridge the tax dodging narcissist.


Dmoney wrote:
Branson is a tax exile so he doesn't pay tax. Tax is for small people.


Dmoney wrote:
Why are you so desperate to suck up to rich people? Why is it socialism for the rich but Brits starving to death because their benefits have been cut.



To summarise, I’ve got no issue with you holding the opinion that VS should be allowed to fail and to dislike Richard Branson. But be honest about it. You’re new in here, pease don’t pretend to be something you are obviously not, because the faux financial rationale you keep pushing is transparently wrong, fools no one and devalues your input.



You can't be this slow..... At no stage in Branson open letter does he inject his own cash in the business. Committing 250m can just as easily mean drawing down on your committed revolving facilities. You love the chap for some reason and that's your perogative, just don't ask broke British people who pay taxes to pay for a tax exile like Branson.

If you believe he lives in BVI for ANYTHING other than tax reasons I've a bridge to sell you. Of course all the shell companies pay the applicable taxes along the way but you structure your liabilities so that minimized within common decency.


If it's a viable business then why won't banks or the government give him a loan? I'm going to credit soon for approval on a airport facility restructuring. The syndicate kicked back on then orginial projections by the borrower post covid but ultimately there is a plan everyone is going for approval on. The problem is, if I get approval assuming 80% reduction until September followed by 40% to February and then slow ramp to 70% through 2022. If the RM on a virgin deal comes in assuming 50% capacity by December then credit wouldn't be taking a consistent view. But Virgin need to assume much faster recovery than other airlines or airports for their model to have any hope of showing them being able to repay further loans, which they can't as their debt burden is already to high and their profitability too weak.

You don't lend further into a bad credit risk, you show some credit discipline and if there isn't a reasonable plan for recovery you take your losses. Further lending just makes you final default exposure worse. Under IFRS9 I'd assume they will have to take a full provision on virgin regardless of the outcome, it's definitely stage 2 no matter how much latitude regulators give on covid provisioning.

If worked at the treasury giving money to Virgin is not something I want my hands on. You can smell the select committee from here.


Aside from increasingly resorting to insults, which always adds credibility and balance to any discussion, you have been consistently unable to separate SRB’s personal situation from that of the business. Personal obsessions aside, VS is a UK Tax paying company with overwhelmingly UK tax paying employees (a fact that I fully expect you to ignore) that have been placed in an unprecedented situation entirely beyond their control. Usual rules don’t apply.

Do you seriously think SRB will have to worry about paying the mortgage or feeding his family if VS goes under? SRB is a shareholder. That’s it. Do you know or care about where IAG’s, AA’s or EZY’s shareholders live, or what their tax status is?

Lastly, Do I think that SRB lives on his own private Caribbean paradise hideaway (that he bought when he was 29 years old) in his semi-retirement with his family, surrounded by year round warmth, sunshine, beaches and clear blue sea solely for tax reasons? You’re right. I can’t think of anything else it could possibly be.....
So long 701, it was nice knowing you.
 
AAMDanny
Posts: 322
Joined: Wed Apr 30, 2008 4:06 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 9:23 am

sevenheavy wrote:

Aside from increasingly resorting to insults, which always adds credibility and balance to any discussion, you have been consistently unable to separate SRB’s personal situation from that of the business. Personal obsessions aside, VS is a UK Tax paying company with overwhelmingly UK tax paying employees (a fact that I fully expect you to ignore) that have been placed in an unprecedented situation entirely beyond their control. Usual rules don’t apply.

Do you seriously think SRB will have to worry about paying the mortgage or feeding his family if VS goes under? SRB is a shareholder. That’s it. Do you know or care about where IAG’s, AA’s or EZY’s shareholders live, or what their tax status is?

Lastly, Do I think that SRB lives on his own private Caribbean paradise hideaway (that he bought when he was 29 years old) in his semi-retirement with his family, surrounded by year round warmth, sunshine, beaches and clear blue sea solely for tax reasons? You’re right. I can’t think of anything else it could possibly be.....


You have hit the nail on the head.
 
User avatar
vhtje
Posts: 1198
Joined: Sat Jan 10, 2009 12:40 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 9:31 am

Boeing74741R wrote:
Again I don't think anybody denies their P&L over the years has been a roller coaster between profits and loss. I will repeat my claim from last week that profits from more than 5 or so years ago (and especially during the 49% SQ ownership days) are irrelevant to the current situation. The VS of today is different to the VS of 10 years ago in various areas from fleet and network to strategy and leadership.


Except that they are relevant to the people who are pouring over the VS books in order to determine if they should be lent money. Also, that historical poor performance is why VS is so asset-poor now. If VS had been performing better in the earlier part of last decade, they would have assets now. But they do not. They have no rainy day stash. And, oh man, is it but pouring out there right now.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 10:29 am

sevenheavy wrote:
Dmoney wrote:
DobboDobbo wrote:
As I’ve said, I don’t think you know what you are talking about and I don’t think you are what you profess to be.



This is what you are holding yourself out as being. You do not state what role, but I assume you would not profess (or admit?) to being the cleaner. However, you do not seem to understand how VS’s business works and how it returns value to the Virgin group amongst others.







Leaving aside your apparent lack of understanding of the term “creative destruction”, or the difference between “profitability” and “viability” or why businesses exist, would you agree it is a material oversight for someone in the corporate finance world to have not understood the royalty payment arrangements and how that affects profitability?

You also seem to have a confused position on whether Branson is “actually rich”. See below.



Leaving aside the unsophisticated language, you do realise (I’m sure you do - you work in “corporate finance”) it is possible to be cash rich but asset poor and vice versa?

In any event, you may wish to hear that Bransons Virgin Group has already committed 250m dollars to help various Virgin companies tackle Coronavirus. By your own standard, Branson is not a leveraged liar but is “actually rich”. See link below.

https://www.virgin.com/richard-branson/ ... -employees

The premise of your position on him seems to be fundamentally wrong, unless you are now going to revise your criteria?


Personally, I think you are against VS not because of any financial reason as asserted, but because you have a personal animosity to either Branson, or anyone successful. You also appear to have some form of British prejudice.

This is demonstrated by by the following examples (there are many more like this):












To summarise, I’ve got no issue with you holding the opinion that VS should be allowed to fail and to dislike Richard Branson. But be honest about it. You’re new in here, pease don’t pretend to be something you are obviously not, because the faux financial rationale you keep pushing is transparently wrong, fools no one and devalues your input.



You can't be this slow..... At no stage in Branson open letter does he inject his own cash in the business. Committing 250m can just as easily mean drawing down on your committed revolving facilities. You love the chap for some reason and that's your perogative, just don't ask broke British people who pay taxes to pay for a tax exile like Branson.

If you believe he lives in BVI for ANYTHING other than tax reasons I've a bridge to sell you. Of course all the shell companies pay the applicable taxes along the way but you structure your liabilities so that minimized within common decency.


If it's a viable business then why won't banks or the government give him a loan? I'm going to credit soon for approval on a airport facility restructuring. The syndicate kicked back on then orginial projections by the borrower post covid but ultimately there is a plan everyone is going for approval on. The problem is, if I get approval assuming 80% reduction until September followed by 40% to February and then slow ramp to 70% through 2022. If the RM on a virgin deal comes in assuming 50% capacity by December then credit wouldn't be taking a consistent view. But Virgin need to assume much faster recovery than other airlines or airports for their model to have any hope of showing them being able to repay further loans, which they can't as their debt burden is already to high and their profitability too weak.

You don't lend further into a bad credit risk, you show some credit discipline and if there isn't a reasonable plan for recovery you take your losses. Further lending just makes you final default exposure worse. Under IFRS9 I'd assume they will have to take a full provision on virgin regardless of the outcome, it's definitely stage 2 no matter how much latitude regulators give on covid provisioning.

If worked at the treasury giving money to Virgin is not something I want my hands on. You can smell the select committee from here.


Aside from increasingly resorting to insults, which always adds credibility and balance to any discussion, you have been consistently unable to separate SRB’s personal situation from that of the business. Personal obsessions aside, VS is a UK Tax paying company with overwhelmingly UK tax paying employees (a fact that I fully expect you to ignore) that have been placed in an unprecedented situation entirely beyond their control. Usual rules don’t apply.

Do you seriously think SRB will have to worry about paying the mortgage or feeding his family if VS goes under? SRB is a shareholder. That’s it. Do you know or care about where IAG’s, AA’s or EZY’s shareholders live, or what their tax status is?

Lastly, Do I think that SRB lives on his own private Caribbean paradise hideaway (that he bought when he was 29 years old) in his semi-retirement with his family, surrounded by year round warmth, sunshine, beaches and clear blue sea solely for tax reasons? You’re right. I can’t think of anything else it could possibly be.....



Let's not pretend I've hurt your feelings, I've certainly been politer than our friend dobbo.

Branson is a tax exile, nobody seriously disputes this. You can have a private island and not be tax resident there. You believe whatever you want though.

You don't seem to be able to understand that equity gets paid last and stumps up first. You don't get free money from the government. If you can show equity has taken it's lumps, is willing to back the business and there is a viable plan then you can get access. Virgin hasn't.

Isn't it funny how you attack the person asking for accountability for rich elites but never ask for any accountability from them. It's always socialism for the rich.
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 10:41 am

Wizz Air has qualified for and taken a £300million credit facility from the UK Government.

https://www.headforpoints.com/2020/04/2 ... t-bailout/
 
Dmoney
Posts: 134
Joined: Tue Mar 17, 2020 9:53 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 10:45 am

The attitudes and behavior of people on here is discraceful. Expounding on something they clear know nothing about while impuning the motivations of those who do.

Delta got away $5bn in bonds yesterday, easyJet, Ryanair, IAG all have facilities. Governments are willing to back firms which have shown a reasonable capital structure or restructured capital structure and the chance to recover and repay the support provided. Virgin isn't one of them. You can get mad at me but the reality of the situation isn't my fault.

The fact Branson is a tax dodging exile is actually relevant aswell. Modern hyper capitalism exemplified by Cerberus or Och-ziff or hypocrites like Branson is immoral and ordinary people don't approve of bailouts for the rich. These aren't old elites embedded in their community with a sense of nobelesse oblige who've been caught out. Branson feels know sense of obligation to contribute to the common good in the UK and therefore can't expect society to bail him out.

As I've tried to explain to you before. Distressed firms need to restructure. If they copied Norwegian and existing shareholders were diluted to 5% and made an injection of say another 50 million, while debt holders took a debt equity swap then company would be on a much more sustainable footing to survive. Then government support would be a appropriate if required.

It's morally wrong to just GIVE them money and it's not how capitalism works either. Nobody wants anybody to lose a jobs but it can't be another blank check for the rich to plunder the common treasury.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 10:51 am

Dmoney wrote:
The attitudes and behavior of people on here is discraceful. Expounding on something they clear know nothing about while impuning the motivations of those who do.

Delta got away $5bn in bonds yesterday, easyJet, Ryanair, IAG all have facilities. Governments are willing to back firms which have shown a reasonable capital structure or restructured capital structure and the chance to recover and repay the support provided. Virgin isn't one of them. You can get mad at me but the reality of the situation isn't my fault.

The fact Branson is a tax dodging exile is actually relevant aswell. Modern hyper capitalism exemplified by Cerberus or Och-ziff or hypocrites like Branson is immoral and ordinary people don't approve of bailouts for the rich. These aren't old elites embedded in their community with a sense of nobelesse oblige who've been caught out. Branson feels know sense of obligation to contribute to the common good in the UK and therefore can't expect society to bail him out.

As I've tried to explain to you before. Distressed firms need to restructure. If they copied Norwegian and existing shareholders were diluted to 5% and made an injection of say another 50 million, while debt holders took a debt equity swap then company would be on a much more sustainable footing to survive. Then government support would be a appropriate if required.

It's morally wrong to just GIVE them money and it's not how capitalism works either. Nobody wants anybody to lose a jobs but it can't be another blank check for the rich to plunder the common treasury.


He doth protest too much, methinks...
 
sevenheavy
Posts: 969
Joined: Tue Mar 23, 2004 3:30 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 10:56 am

Dmoney wrote:
sevenheavy wrote:
Dmoney wrote:


You can't be this slow..... At no stage in Branson open letter does he inject his own cash in the business. Committing 250m can just as easily mean drawing down on your committed revolving facilities. You love the chap for some reason and that's your perogative, just don't ask broke British people who pay taxes to pay for a tax exile like Branson.

If you believe he lives in BVI for ANYTHING other than tax reasons I've a bridge to sell you. Of course all the shell companies pay the applicable taxes along the way but you structure your liabilities so that minimized within common decency.


If it's a viable business then why won't banks or the government give him a loan? I'm going to credit soon for approval on a airport facility restructuring. The syndicate kicked back on then orginial projections by the borrower post covid but ultimately there is a plan everyone is going for approval on. The problem is, if I get approval assuming 80% reduction until September followed by 40% to February and then slow ramp to 70% through 2022. If the RM on a virgin deal comes in assuming 50% capacity by December then credit wouldn't be taking a consistent view. But Virgin need to assume much faster recovery than other airlines or airports for their model to have any hope of showing them being able to repay further loans, which they can't as their debt burden is already to high and their profitability too weak.

You don't lend further into a bad credit risk, you show some credit discipline and if there isn't a reasonable plan for recovery you take your losses. Further lending just makes you final default exposure worse. Under IFRS9 I'd assume they will have to take a full provision on virgin regardless of the outcome, it's definitely stage 2 no matter how much latitude regulators give on covid provisioning.

If worked at the treasury giving money to Virgin is not something I want my hands on. You can smell the select committee from here.


Aside from increasingly resorting to insults, which always adds credibility and balance to any discussion, you have been consistently unable to separate SRB’s personal situation from that of the business. Personal obsessions aside, VS is a UK Tax paying company with overwhelmingly UK tax paying employees (a fact that I fully expect you to ignore) that have been placed in an unprecedented situation entirely beyond their control. Usual rules don’t apply.

Do you seriously think SRB will have to worry about paying the mortgage or feeding his family if VS goes under? SRB is a shareholder. That’s it. Do you know or care about where IAG’s, AA’s or EZY’s shareholders live, or what their tax status is?

Lastly, Do I think that SRB lives on his own private Caribbean paradise hideaway (that he bought when he was 29 years old) in his semi-retirement with his family, surrounded by year round warmth, sunshine, beaches and clear blue sea solely for tax reasons? You’re right. I can’t think of anything else it could possibly be.....



Let's not pretend I've hurt your feelings, I've certainly been politer than our friend dobbo.

Branson is a tax exile, nobody seriously disputes this. You can have a private island and not be tax resident there. You believe whatever you want though.

You don't seem to be able to understand that equity gets paid last and stumps up first. You don't get free money from the government. If you can show equity has taken it's lumps, is willing to back the business and there is a viable plan then you can get access. Virgin hasn't.

Isn't it funny how you attack the person asking for accountability for rich elites but never ask for any accountability from them. It's always socialism for the rich.


I made no attempt to dispute it either. The point is that (as predicted) you are still unable to separate SRB’s personal tax status(which is entirely legal and not exactly unusual amongst those who are well enough off to benefit) from that of VS, a U.K. company and its U.K. employees.

There’s no ‘attack’ anywhere in my posts. I dont need to call people ‘slow’ to make my points.
So long 701, it was nice knowing you.
 
tphuang
Posts: 5197
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 11:37 am

sevenheavy wrote:
Aside from increasingly resorting to insults, which always adds credibility and balance to any discussion, you have been consistently unable to separate SRB’s personal situation from that of the business. Personal obsessions aside, VS is a UK Tax paying company with overwhelmingly UK tax paying employees (a fact that I fully expect you to ignore) that have been placed in an unprecedented situation entirely beyond their control. Usual rules don’t apply.

Do you seriously think SRB will have to worry about paying the mortgage or feeding his family if VS goes under? SRB is a shareholder. That’s it. Do you know or care about where IAG’s, AA’s or EZY’s shareholders live, or what their tax status is?

Lastly, Do I think that SRB lives on his own private Caribbean paradise hideaway (that he bought when he was 29 years old) in his semi-retirement with his family, surrounded by year round warmth, sunshine, beaches and clear blue sea solely for tax reasons? You’re right. I can’t think of anything else it could possibly be.....


There are many points here against VS bailout that you should attempt to counter rather than just debating the motives of everyone who thinks VS bialout is a bad idea. Please tdo that if you are for a VS bailout.

Boeing74741R wrote:

Again I don't think anybody denies their P&L over the years has been a roller coaster between profits and loss. I will repeat my claim from last week that profits from more than 5 or so years ago (and especially during the 49% SQ ownership days) are irrelevant to the current situation. The VS of today is different to the VS of 10 years ago in various areas from fleet and network to strategy and leadership. They even had a plan to return to profitability during 2020/2021 before COVID-19 struck and Flybe went under.

To answer your last two lines, I will repeat my regular statement that as the government have effectively added to the current predicament airlines see themselves in by telling their core markets to stay at home and advise against all but essential travel (obviously on the grounds of public health), they have some obligation to support businesses to see them through to the other side. The aviation sector is one in particular and the UK aviation sector is still reeling from the loss of two major airlines within 6 months of each other (Thomas Cook and Flybe). For clarity, no I don't think government support should be unlimited. I will also repeat my earlier prediction that if this crisis carries on for many more months, BA will probably have to reconsider their earlier claim that they don't need help from the government.

No matter some people's prejudices on here, this crisis is unprecedented and all businesses across all industries are impacted one way or another.


This is not a 6 months problem from VS. international market will be weak for years. If they could barely scrape by and turn a profit during the best of times, they are going to be in real trouble in the worst of times, which we are in right now.

In capitalism, the well run companies survive and the companies that are badly run (or with non-feasible business model) will fall. That's how things work. when things are good again, there will be new airliines. VS's current model clearly will not be profitable for years in a market where TATL demand is going to be weak for years.

You cannot pretend this is a 6 months problem for VS when the gov't will have to keep bailing out until the industry returns to massive profitability. Clearly, VS's current model is incapable of generating same level of margins as other carriers. BA may need help in a few months, but it will make money again once aviation demand comes back. That's the difference. You seem to continually ignore how much VS under performs vs other major carriers in UK.
 
User avatar
FrenchPotatoEye
Posts: 325
Joined: Sun Nov 12, 2017 1:20 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 11:43 am

blooc350 wrote:
FrenchPotatoEye wrote:
blooc350 wrote:
What if EK or EY takes over. Go head to head with BA and will give the Americans a run for their money on the Transatlantic routes.


Etuhahad losing money.

Emirates trying to save money.

They won't be silly to buy even a penny of virgns.


Its "Etihad" lol

And you never know.............all that oil money


Very sorry. I had the stroke last year's and my recovery is slow.

Thanks.
 
Aceme
Posts: 7
Joined: Tue Dec 05, 2017 9:17 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 12:11 pm

Lots of hypocrites here. IM sure if each one of us were in the same shoes as Branson, we would have done exactly the same. All this "Doesn't pay his taxes" - we would have done the same - its legal, why wouldn't we?

HOWEVER then main point is, its a British company, VIRGIN ATLANTIC want the bailout not Branson. VIRGIN ATLANTIC will pay the bailout back, along with many other Government taxes, cooperate taxes, staff taxes... VS will pay for new aircraft, new engines, catering staff (lots of other British company interest there alone) This decision affects a lot of people, not just the VS employees.

So all those banging on about Branson hasn't paid his taxes in years, open anther topic...
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 12:46 pm

Aceme wrote:
Lots of hypocrites here. IM sure if each one of us were in the same shoes as Branson, we would have done exactly the same. All this "Doesn't pay his taxes" - we would have done the same - its legal, why wouldn't we?

HOWEVER then main point is, its a British company, VIRGIN ATLANTIC want the bailout not Branson. VIRGIN ATLANTIC will pay the bailout back, along with many other Government taxes, cooperate taxes, staff taxes... VS will pay for new aircraft, new engines, catering staff (lots of other British company interest there alone) This decision affects a lot of people, not just the VS employees.

So all those banging on about Branson hasn't paid his taxes in years, open anther topic...


The Government is not making the decision based on Brandon’s tax status. It will be made based on the viability of the carrier. EasyJet and Wizz Air have both benefited. At the moment, Virgin was rejected because it didn’t have an investment rating of its debt. It was also told to ask its current investors first.
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 1:01 pm

That thing where Branson takes his cut / brand use fee on gross revenue even if (when) VS usually makes a loss sounds like yet another Branson scam - maybe that’s why Branson never cared to make a profit or save or run the airline properly . It’s just a cow to be milked in that scenario . Presumably U.K. civil servants saw right through it years ago ...
 
3AWM
Posts: 231
Joined: Sat Jul 23, 2016 1:01 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 1:05 pm

seansasLCY wrote:
Wizz Air has qualified for and taken a £300million credit facility from the UK Government.

https://www.headforpoints.com/2020/04/2 ... t-bailout/


According to the link posted above credit has been denied because VS doesn't have tradeable debt and therefore does not meet the criteria for lending under the government's scheme. Where Branson lives or whether he pays tax is not a factor in the decision.

It's noted that Wizz - which is a Hungarian company has also used the scheme even though it doesn't need finance just because UK gov borrowing is cheaper than it's existing credit line.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 1:08 pm

tphuang wrote:
You cannot pretend this is a 6 months problem for VS when the gov't will have to keep bailing out until the industry returns to massive profitability. Clearly, VS's current model is incapable of generating same level of margins as other carriers. BA may need help in a few months, but it will make money again once aviation demand comes back. That's the difference. You seem to continually ignore how much VS under performs vs other major carriers in UK.


A few points in response: -

1) I agree that the repercussions of COVID-19 is going to linger for a while. How fast traffic levels recover to pre-COVID levels will depend how quickly countries open borders to foreign citizens/visitors originating from certain countries, countries lifting travel advice/restrictions for its citizens to visit certain places, the performance of the economy both in terms of business travel and leisure travel if people have disposable income, and of course the confidence of people to travel without having to worry about contracting COVID-19.

2) I am not ignoring how well other British airlines perform. I live here, I've used a lot of them (not all mind), I watch the news and have seen various airlines come and go, especially within the last few years. However, this thread is about VS specifically. A general discussion about the performance of all British airlines is for another thread.

Aceme wrote:
Lots of hypocrites here. IM sure if each one of us were in the same shoes as Branson, we would have done exactly the same. All this "Doesn't pay his taxes" - we would have done the same - its legal, why wouldn't we?


Yep. Some people may question the morality of SRB's tax status even if it is legal, but that should be taken up with the government to investigate and address if people feel so strongly about it.

seansasLCY wrote:
The Government is not making the decision based on Brandon’s tax status.


Good. It's a pity that some people are casting opinions about what should happened based on their opinion of SRB.
 
tphuang
Posts: 5197
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 1:14 pm

Boeing74741R wrote:
tphuang wrote:
You cannot pretend this is a 6 months problem for VS when the gov't will have to keep bailing out until the industry returns to massive profitability. Clearly, VS's current model is incapable of generating same level of margins as other carriers. BA may need help in a few months, but it will make money again once aviation demand comes back. That's the difference. You seem to continually ignore how much VS under performs vs other major carriers in UK.


A few points in response: -

1) I agree that the repercussions of COVID-19 is going to linger for a while. How fast traffic levels recover to pre-COVID levels will depend how quickly countries open borders to foreign citizens/visitors originating from certain countries, countries lifting travel advice/restrictions for its citizens to visit certain places, the performance of the economy both in terms of business travel and leisure travel if people have disposable income, and of course the confidence of people to travel without having to worry about contracting COVID-19.

2) I am not ignoring how well other British airlines perform. I live here, I've used a lot of them (not all mind), I watch the news and have seen various airlines come and go, especially within the last few years. However, this thread is about VS specifically. A general discussion about the performance of all British airlines is for another thread.

so if we base this on just VS's ability to return to profitability within a reasonable time frame, then giving VS a loan is a terrible idea for the gov't. If VS can break even in the past 5 years when BA/FR/U2 is getting 10% margin. It will continue to bleed money as long as the healthier airlines are getting 5% margin. The reality is for the foreseeable future, TATL demand will be down and take longer time to recover than intra-Europe or US domestic travel. VS's business model simply will get hammered in this environment. British gov't will have to keep bailing them out if it starts now. This would be a bailout with no end in sight. If VS wants to achieve profitability, it needs to come up with a new business plan.
 
Nickd92
Posts: 103
Joined: Mon Aug 24, 2015 7:01 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 1:16 pm

Boeing74741R wrote:
Yep. Some people may question the morality of SRB's tax status even if it is legal, but that should be taken up with the government to investigate and address if people feel so strongly about it.


That won't happen. Some of the donations for the conservative party come from tax dodging billionaires - who get away with this. In fact one of the very front bench gets away with it too - JACOB REES MOGG. It is not the interest, and never will be in the interest, to legislate against it. We've had 41 years of government, in different disguises and colours, it will not change. UK has also left the EU, very conveniently as they are starting to legislated against tax dodging millionaires and billionaires. I find it laughable and hypocritical that people go on the morale high ground about tax dodging yet will happily vote for the conservative party.
 
gunnerman
Posts: 1143
Joined: Fri May 19, 2017 7:55 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 3:01 pm

tphuang wrote:
VS's business model simply will get hammered in this environment. British gov't will have to keep bailing them out if it starts now. This would be a bailout with no end in sight. If VS wants to achieve profitability, it needs to come up with a new business plan.

VS has a new business model which it has been forced to adopt. It's entirely feasible that if rescued a much smaller VS will not return to LGW, MAN, GLA and BFS, so continuing to operate solely from LHR to US in collaboration with DL, Asia and Caribbean. However what's a major issue is what the lessors think about the three-quarters of the 46 aircraft leased to VS as surely VS will have to walk away from some of these leases.
 
Galwayman
Posts: 901
Joined: Fri Mar 10, 2017 10:20 am

Re: Virgin Atlantic facing collapse

Tue Apr 28, 2020 3:09 pm

KingB123 wrote:
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.


Virgin is a small irrelevant airline with a poor business structure, strategy and leadership. I see a lot of ignorance in this feed
 
tphuang
Posts: 5197
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:16 pm

What's the evidence they can actually be profitable at LHR with their limited slot portfolio and a network optimized to help Delta's profits rather than its own profits? At the end of the day, demand for intercontinental travel will be down at LHR and VS has very limited domestic/intra-Europe service out of there which are necessary to fill the aircraft and achieve profitability. People keep talking about LHR as a golden goose, when in reality there is no chance VS can make money out of LHR with its limited number of flights vs BA. With the collapse of several airlines, VS would be better served to examine whether or not it can change its business model to take advantage of the void left by those now departed airlines vs trying to compete with BA. The latter really only benefits DL and maybe their own ego.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:24 pm

SueD wrote:
All that said Virgin Group may have an out for a smaller business short term via Virgin Atlantic International - transfer a few more aircraft over and actually register them in the Caribbean.


I did wonder about the second AOC VS have under Virgin Atlantic International Limited that was setup and acquired a few years ago. It's used to operate a number of LGW-Caribbean flights. I don't know why it was initially setup though. It could explain why Ed Bastian seemed confident VS could re-emerge if they went into adminstration. Would they need to split off Virgin Atlantic International Limited from Virgin Atlantic Airways Limited and the rest of the VS empire before triggering the administration process?
 
gunnerman
Posts: 1143
Joined: Fri May 19, 2017 7:55 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:34 pm

VS is a long-haul carrier and there are only so many destinations which will be profitable. It's absolutely right to collaborate with DL on as many US routes as possible as that's where the feed and money will come from. Going east is tough against multiple competitors who have their huge hubs (like MU and CX) and the Caribbean may bring in something but from a strictly limited number of destinations such as BGI and ANU.
 
gunnerman
Posts: 1143
Joined: Fri May 19, 2017 7:55 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:40 pm

Boeing74741R wrote:
SueD wrote:
All that said Virgin Group may have an out for a smaller business short term via Virgin Atlantic International - transfer a few more aircraft over and actually register them in the Caribbean.


I did wonder about the second AOC VS have under Virgin Atlantic International Limited that was setup and acquired a few years ago. It's used to operate a number of LGW-Caribbean flights. I don't know why it was initially setup though. It could explain why Ed Bastian seemed confident VS could re-emerge if they went into adminstration. Would they need to split off Virgin Atlantic International Limited from Virgin Atlantic Airways Limited and the rest of the VS empire before triggering the administration process?


Virgin Atlantic International got off the ground in November 2015 from LGW to BGI, UVF, ANU, GND and TAG. What was key was that this was a low-cost operation using two 333s borrowed from DL with the other LGW flights still operated with 747s.
 
Westerwaelder
Posts: 239
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:46 pm

gunnerman wrote:
VS is a long-haul carrier and there are only so many destinations which will be profitable. It's absolutely right to collaborate with DL on as many US routes as possible as that's where the feed and money will come from. Going east is tough against multiple competitors who have their huge hubs (like MU and CX) and the Caribbean may bring in something but from a strictly limited number of destinations such as BGI and ANU.


What is the benefit to the UK taxpayer for taking on such a huge risk (which an unsecured loan to a loss making company in times of the biggest industry crisis in history with a very slow recovery perspective surely must be)? We have discussed the 8,500 jobs already and my point is you prop up VS jobs and you destroy jobs somewhere else in the industry as we are looking at substantial shrinkage and many will have to find employment elsewhere.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 4:47 pm

Boeing74741R wrote:
SueD wrote:
All that said Virgin Group may have an out for a smaller business short term via Virgin Atlantic International - transfer a few more aircraft over and actually register them in the Caribbean.


I did wonder about the second AOC VS have under Virgin Atlantic International Limited that was setup and acquired a few years ago. It's used to operate a number of LGW-Caribbean flights. I don't know why it was initially setup though. It could explain why Ed Bastian seemed confident VS could re-emerge if they went into adminstration. Would they need to split off Virgin Atlantic International Limited from Virgin Atlantic Airways Limited and the rest of the VS empire before triggering the administration process?


Per wikipedia:
"On 13 April 2015, Virgin Atlantic incorporated a new subsidiary – Virgin Atlantic International Limited (VAIL).[75]

Upon incorporation as an AOC holder, the majority of Virgin Atlantic's landing slots at London Heathrow Airport were transferred to VAIL, allowing Virgin to access the value of the carriers' slots by 'mortgaging' them through open investment from capital markets, the first time in Europe a company has used airport take-off and landing slots to generate money in this way.[78][79] "

Looks to me if any damage happens it will be contained to VAIL. The actual VS will probably be fine even if reduced.
 
goosebayguy
Posts: 705
Joined: Fri Sep 25, 2009 1:12 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 5:18 pm

Apparently the Govt has told Richard Branson its down to him to sort out, no they are not helping him out.
 
BealineV953
Posts: 187
Joined: Fri Jul 26, 2019 10:00 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 5:38 pm

VS11 wrote:
BealineV953 wrote:

Where you say "The truly anti-competitive nature of the TATL JV's" what exactly do you mean?
In every market from Europe to and from North America the three alliances compete hard for business. For just about every origin and destination, each of the alliances will fight hard for a share of the market, whether on a non-stop direct service, or via intermediate points. Think about a journey like BER-SFO and all of the available options (via AMS, FRA, LON, PAR and so on). I'd say the consumer has never had as many options.


Alliances and JV's are different. But you can take BOS-LHR. AA/BA and VS/DL are the only options. In terms of operating carriers, AA is not even operating it, it is just BA. So even during Bermuda II, there were 4 operating carriers, even UA flew BOS-LHR until 2002 or so, and now the choice is even less....you can expand to BOS-LON, and you get only one extra carrier - Norwegian.
So that's what it means - consumers have fewer options and eventually pay higher prices.


Yes, I am well aware that there is a difference between an alliance and a JV.

Airlines do not enter into alliances to enable them to operate parallel services (eg AA and BA both flying LON-DFW). Rather, airlines want access to the behind point cities their partner serves that they do not. A key benefit of an alliance is to give customers seemless access to a partner’s network. Interline and behind point code-share agreements achieve much of that.

Airlines request anti-trust immunity so that they can work with a partner to offer consumers multiple routing, timing and fare options. The success of alliances, with passengers connecting to and from hubs and pushing up demand, has allowed frequency and capacity to increase. Where anti-trust immunity is approved, a joint venture agreement describes how revenue will be shared and other commercial issues.

Given that airlines do not set up alliances, seek anti-trust immunity and create joint ventures to operate parallel services, your LON-BOS example is not helpful.

However, I will say that the smaller number of operators in point to point markets today is absolutely not because of JVs. It is because the industry has rationalised. We no longer have Northwest, TWA and others competing with American, Delta and United. The big three US carriers have concentrated their international services at their hubs. United could fly BOS-LON but choose not to, presumably because they prefer to focus their efforts on ORD, IAD and EWR. Virgin could fly LON-PHX, but choose not to.

In the UK market, roughly a third of the UK population live within a two-hour surface journey of Heathrow. The other two thirds have a choice of either making a long surface journey to Heathrow, or starting their air journey at a local airport (MAN, NCL, EDI etc.). Where there is no direct service to their destination, they may travel via LHR, but also have the option of connecting via AMS, FRA, PAR or wherever.

So, the UK-US direct operators, BA & AA, DL & VS and UA & NZ, compete directly with each other, and all must be mindful of the indirect competition via AMS, FRA and other cities. This keeps prices in check.

Going back to my example of travel ex-BER, but taking BOS as the destination if you prefer. There is no direct service, so, all passengers will connect somewhere.
Take a look at Skyscanner for the options. For a date in mid-September, taking the lowest available prices:
Oneworld offers 8 timing / routing / price options over LON, MAD and DUB.
Skyteam offers 10 timing / routing / price options over AMS, PAR and ROM.
Star offers 18 timing / routing / price options over FRA, MUC, ZRH and EWR.
So, all three alliances (or JVs if you prefer) are competing for customers in the BER-BOS market and offer multiple schedule and fare options.
For Star, if the LH flights ex-FRA to BOS are becoming full and the prices for that routing go up, it could be that routings via BRU, ZRH and EWR are still relatively cheap.

So, I do not accept your assertion that “consumers have fewer options and eventually pay higher prices.” Alliances have greatly increased consumer choice, and have not reduced competition.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
GDB
Posts: 13751
Joined: Wed May 23, 2001 6:25 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 5:51 pm

OK, cards on table, I've never liked Branson, believe it if you want to but for me, it actually pre-dates him starting an airline.
Johnny Lydon was right, 'never trust a hippy', especially one from a wealthy background like Branson. (Which is not of course his fault just when he comes all 'hardscrabble').
I think he's great at marketing, not an innovator really.

This however has nothing to do with his staff. Which may I remind the fanbase if not for HM Government's furlough scheme would be out with no pay. He did do that, from a tax haven, no amount of spin changes that.
All of us who are airline staff fear what is happening, I have just heard my employer, Branson's obsession, may be making 12000 staff redundant.
I'm on furlough and have so far been unimpressed by the comms, that's a local issue in my dept.
You know what, for all that I'd trust them rather than Branson.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 5:52 pm

BealineV953 wrote:
VS11 wrote:
BealineV953 wrote:

Where you say "The truly anti-competitive nature of the TATL JV's" what exactly do you mean?
In every market from Europe to and from North America the three alliances compete hard for business. For just about every origin and destination, each of the alliances will fight hard for a share of the market, whether on a non-stop direct service, or via intermediate points. Think about a journey like BER-SFO and all of the available options (via AMS, FRA, LON, PAR and so on). I'd say the consumer has never had as many options.


Alliances and JV's are different. But you can take BOS-LHR. AA/BA and VS/DL are the only options. In terms of operating carriers, AA is not even operating it, it is just BA. So even during Bermuda II, there were 4 operating carriers, even UA flew BOS-LHR until 2002 or so, and now the choice is even less....you can expand to BOS-LON, and you get only one extra carrier - Norwegian.
So that's what it means - consumers have fewer options and eventually pay higher prices.


Yes, I am well aware that there is a difference between an alliance and a JV.

Airlines do not enter into alliances to enable them to operate parallel services (eg AA and BA both flying LON-DFW). Rather, airlines want access to the behind point cities their partner serves that they do not. A key benefit of an alliance is to give customers seemless access to a partner’s network. Interline and behind point code-share agreements achieve much of that.

Airlines request anti-trust immunity so that they can work with a partner to offer consumers multiple routing, timing and fare options. The success of alliances, with passengers connecting to and from hubs and pushing up demand, has allowed frequency and capacity to increase. Where anti-trust immunity is approved, a joint venture agreement describes how revenue will be shared and other commercial issues.

Given that airlines do not set up alliances, seek anti-trust immunity and create joint ventures to operate parallel services, your LON-BOS example is not helpful.

However, I will say that the smaller number of operators in point to point markets today is absolutely not because of JVs. It is because the industry has rationalised. We no longer have Northwest, TWA and others competing with American, Delta and United. The big three US carriers have concentrated their international services at their hubs. United could fly BOS-LON but choose not to, presumably because they prefer to focus their efforts on ORD, IAD and EWR. Virgin could fly LON-PHX, but choose not to.

In the UK market, roughly a third of the UK population live within a two-hour surface journey of Heathrow. The other two thirds have a choice of either making a long surface journey to Heathrow, or starting their air journey at a local airport (MAN, NCL, EDI etc.). Where there is no direct service to their destination, they may travel via LHR, but also have the option of connecting via AMS, FRA, PAR or wherever.

So, the UK-US direct operators, BA & AA, DL & VS and UA & NZ, compete directly with each other, and all must be mindful of the indirect competition via AMS, FRA and other cities. This keeps prices in check.

Going back to my example of travel ex-BER, but taking BOS as the destination if you prefer. There is no direct service, so, all passengers will connect somewhere.
Take a look at Skyscanner for the options. For a date in mid-September, taking the lowest available prices:
Oneworld offers 8 timing / routing / price options over LON, MAD and DUB.
Skyteam offers 10 timing / routing / price options over AMS, PAR and ROM.
Star offers 18 timing / routing / price options over FRA, MUC, ZRH and EWR.
So, all three alliances (or JVs if you prefer) are competing for customers in the BER-BOS market and offer multiple schedule and fare options.
For Star, if the LH flights ex-FRA to BOS are becoming full and the prices for that routing go up, it could be that routings via BRU, ZRH and EWR are still relatively cheap.

So, I do not accept your assertion that “consumers have fewer options and eventually pay higher prices.” Alliances have greatly increased consumer choice, and have not reduced competition.


Lengthy post to demonstrate you are missing key points. The purpose of the JV is to share cost and profit and coordinate schedules, i.e. ACT AS ONE COMPANY! If they were not anti-competitive, they would NOT have needed anti-trust immunity. Spend a minute to comprehend what this means - they are already breaking the anti-trust laws hence why they need a waiver. If it was just about the network, a code-share and an alliance would work. People were able to connect through multiple airports long before code-shares existed.

And for the record, you should look at the UK-US market, not EU-US. Berlin last time I checked was in Germany, no? If I live in Boston and I need to go to London, it is of little interest to me what a person in Berlin can do.
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 6:31 pm

VS11 wrote:
BealineV953 wrote:
VS11 wrote:

Alliances and JV's are different. But you can take BOS-LHR. AA/BA and VS/DL are the only options. In terms of operating carriers, AA is not even operating it, it is just BA. So even during Bermuda II, there were 4 operating carriers, even UA flew BOS-LHR until 2002 or so, and now the choice is even less....you can expand to BOS-LON, and you get only one extra carrier - Norwegian.
So that's what it means - consumers have fewer options and eventually pay higher prices.


Yes, I am well aware that there is a difference between an alliance and a JV.

Airlines do not enter into alliances to enable them to operate parallel services (eg AA and BA both flying LON-DFW). Rather, airlines want access to the behind point cities their partner serves that they do not. A key benefit of an alliance is to give customers seemless access to a partner’s network. Interline and behind point code-share agreements achieve much of that.

Airlines request anti-trust immunity so that they can work with a partner to offer consumers multiple routing, timing and fare options. The success of alliances, with passengers connecting to and from hubs and pushing up demand, has allowed frequency and capacity to increase. Where anti-trust immunity is approved, a joint venture agreement describes how revenue will be shared and other commercial issues.

Given that airlines do not set up alliances, seek anti-trust immunity and create joint ventures to operate parallel services, your LON-BOS example is not helpful.

However, I will say that the smaller number of operators in point to point markets today is absolutely not because of JVs. It is because the industry has rationalised. We no longer have Northwest, TWA and others competing with American, Delta and United. The big three US carriers have concentrated their international services at their hubs. United could fly BOS-LON but choose not to, presumably because they prefer to focus their efforts on ORD, IAD and EWR. Virgin could fly LON-PHX, but choose not to.

In the UK market, roughly a third of the UK population live within a two-hour surface journey of Heathrow. The other two thirds have a choice of either making a long surface journey to Heathrow, or starting their air journey at a local airport (MAN, NCL, EDI etc.). Where there is no direct service to their destination, they may travel via LHR, but also have the option of connecting via AMS, FRA, PAR or wherever.

So, the UK-US direct operators, BA & AA, DL & VS and UA & NZ, compete directly with each other, and all must be mindful of the indirect competition via AMS, FRA and other cities. This keeps prices in check.

Going back to my example of travel ex-BER, but taking BOS as the destination if you prefer. There is no direct service, so, all passengers will connect somewhere.
Take a look at Skyscanner for the options. For a date in mid-September, taking the lowest available prices:
Oneworld offers 8 timing / routing / price options over LON, MAD and DUB.
Skyteam offers 10 timing / routing / price options over AMS, PAR and ROM.
Star offers 18 timing / routing / price options over FRA, MUC, ZRH and EWR.
So, all three alliances (or JVs if you prefer) are competing for customers in the BER-BOS market and offer multiple schedule and fare options.
For Star, if the LH flights ex-FRA to BOS are becoming full and the prices for that routing go up, it could be that routings via BRU, ZRH and EWR are still relatively cheap.

So, I do not accept your assertion that “consumers have fewer options and eventually pay higher prices.” Alliances have greatly increased consumer choice, and have not reduced competition.


Lengthy post to demonstrate you are missing key points. The purpose of the JV is to share cost and profit and coordinate schedules, i.e. ACT AS ONE COMPANY! If they were not anti-competitive, they would NOT have needed anti-trust immunity. Spend a minute to comprehend what this means - they are already breaking the anti-trust laws hence why they need a waiver. If it was just about the network, a code-share and an alliance would work. People were able to connect through multiple airports long before code-shares existed.

And for the record, you should look at the UK-US market, not EU-US. Berlin last time I checked was in Germany, no? If I live in Boston and I need to go to London, it is of little interest to me what a person in Berlin can do.


As I posted before, VS isn’t some saint that takes a principled stance against such behaviour, they have engaged in breaking anti-trust rules and conspired with other airlines to fix prices against the interest of consumers on several occasions. They only avoided a fine last time because they became the whistleblower.

On competition grounds, the EU arena is now much more anti-competitive with the largest carriers of Belgium, Germany, Switzerland and Austria all owned by the same carrier. The UK is a highly competitive market with major bases of several low cost airlines and long haul services pretty open and unrestricted (think EK’s 8 daily LHR services compared to Germany’s restrictions).
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 7:03 pm

seansasLCY wrote:
As I posted before, VS isn’t some saint that takes a principled stance against such behaviour, they have engaged in breaking anti-trust rules and conspired with other airlines to fix prices against the interest of consumers on several occasions. They only avoided a fine last time because they became the whistleblower.

On competition grounds, the EU arena is now much more anti-competitive with the largest carriers of Belgium, Germany, Switzerland and Austria all owned by the same carrier. The UK is a highly competitive market with major bases of several low cost airlines and long haul services pretty open and unrestricted (think EK’s 8 daily LHR services compared to Germany’s restrictions).


Sure, VS broke the law once. But that is not the same as what the JV's are doing. The JV's are precisely why anti-trust laws were introduced in the first place. AA and BA should be competing against each other, not coordinating fares and schedules and sharing costs and profit. What the JV's are doing used to be called collusion. Except that now they are doing it in the open. It really puzzles me why this is even acceptable let alone cheered.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 7:59 pm

VS11 wrote:
seansasLCY wrote:
As I posted before, VS isn’t some saint that takes a principled stance against such behaviour, they have engaged in breaking anti-trust rules and conspired with other airlines to fix prices against the interest of consumers on several occasions. They only avoided a fine last time because they became the whistleblower.

On competition grounds, the EU arena is now much more anti-competitive with the largest carriers of Belgium, Germany, Switzerland and Austria all owned by the same carrier. The UK is a highly competitive market with major bases of several low cost airlines and long haul services pretty open and unrestricted (think EK’s 8 daily LHR services compared to Germany’s restrictions).


Sure, VS broke the law once. But that is not the same as what the JV's are doing. The JV's are precisely why anti-trust laws were introduced in the first place. AA and BA should be competing against each other, not coordinating fares and schedules and sharing costs and profit. What the JV's are doing used to be called collusion. Except that now they are doing it in the open. It really puzzles me why this is even acceptable let alone cheered.


I’m puzzled you’re puzzled. It’s close cooperation without buying into each others companies. There is plenty competition in the aviation world to allow JVs. Similar to other industries where joint ventures are set up and approved.
Fares, until this current situation, have been very low and plenty of availability. 20 or even 10 years ago you could not go from A to B as affordably as now. Especially not if your destination isn’t served non stop. Without JVs you wouldn’t have as many LHR flights (and beyond) that AA could operate, same for AMS/CDG for DL and FRA/MUC/ZRH for UA. Same applies in the other direction. Will the JV work best for everyone? No, some people might not get as good a deal as before. But the majority of travellers are better off this way.
 
Boeing74741R
Posts: 1398
Joined: Tue Apr 17, 2007 5:44 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 8:39 pm

So with BA just announcing they will be making 12,000 people redundant, do people still think it’s a good idea to be letting VS collapse? Add the two together and that will be over 20,000 people added to the dole queue in a short time (8,500 or so plus employees plus supply chain).

GDB wrote:
I have just heard my employer, Branson's obsession, may be making 12000 staff redundant.
I'm on furlough and have so far been unimpressed by the comms, that's a local issue in my dept.


Having seen the news, I’m genuine when I say that I hope you’re not one of the 12,000.
 
Johnwaynebobbet
Posts: 209
Joined: Fri Jun 21, 2013 4:25 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 9:03 pm

Boeing74741R wrote:
So with BA just announcing they will be making 12,000 people redundant, do people still think it’s a good idea to be letting VS collapse? Add the two together and that will be over 20,000 people added to the dole queue in a short time (8,500 or so plus employees plus supply chain).

GDB wrote:
I have just heard my employer, Branson's obsession, may be making 12000 staff redundant.
I'm on furlough and have so far been unimpressed by the comms, that's a local issue in my dept.


Having seen the news, I’m genuine when I say that I hope you’re not one of the 12,000.


Yes as VS will not survive in the longer term and Branson will just use it as a way to beat more money out of the government as a way of trying to save the £500m loan.
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 9:11 pm

Boeing74741R wrote:
So with BA just announcing they will be making 12,000 people redundant, do people still think it’s a good idea to be letting VS collapse? Add the two together and that will be over 20,000 people added to the dole queue in a short time (8,500 or so plus employees plus supply chain).

GDB wrote:
I have just heard my employer, Branson's obsession, may be making 12000 staff redundant.
I'm on furlough and have so far been unimpressed by the comms, that's a local issue in my dept.


Having seen the news, I’m genuine when I say that I hope you’re not one of the 12,000.


BA are letting staff go because they don’t see their being demand for their services for several years. Keeping a failing airline alive could end up even more detrimental and killing VS and severely damaging BA. If there is limited demand in the coming years, a VS operating on borrowed money with 20% load factors for two years and BA operating at 20% will not be in anyone’s interest. Granted VS passengers wouldn’t automatically go to BA but it’s still spreading the slim demand too far if the predictions are correct.

As to VS11 point about VS breaking the law once, my point was that they have done it and been found out. Who knows if they’ve done it more often and to what extent? The only times we seem to find out is when one of the airlines turns whistleblower.
 
GDB
Posts: 13751
Joined: Wed May 23, 2001 6:25 pm

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 11:19 pm

Boeing74741R wrote:
So with BA just announcing they will be making 12,000 people redundant, do people still think it’s a good idea to be letting VS collapse? Add the two together and that will be over 20,000 people added to the dole queue in a short time (8,500 or so plus employees plus supply chain).

GDB wrote:
I have just heard my employer, Branson's obsession, may be making 12000 staff redundant.
I'm on furlough and have so far been unimpressed by the comms, that's a local issue in my dept.


Having seen the news, I’m genuine when I say that I hope you’re not one of the 12,000.


Thanks, though I am more than prepared, since early 2016 I've worked a 3 day week, (financially secure, talked to my Rhematology Consultant and asked, 'how many of your patients are still working full time 15 years after diagnoses', the always no nonsense consultant said 'less than 30%'. That was enough and I was feeling it after a normal week).

On the other hand, that means I cost them less, though in an older pension scheme which they don't like. Also though for the most part, I'm a hyperactive mentalist, I am covered by the DDA. Which they are sensitive about.
The resumption, albeit luckily a one off, of the other monkey on my back, occasional epilepsy, this time at work (2nd time in 3 years of that 'performance art' in sight of colleagues), makes them wary too.

It's those who have costs, responsibilities, who I feel sorry for.
I think Fly Caledonian is right, LGW looks dodgy.

There are some that are in near and related departments that are working well past the old retirement age, often with multiple properties, though in terms of bringing value, well lets just say we call them 'deadwood'. They won't move without a big redundancy package. (Now I would not give them the choice).
Indeed, the last time I was in (23rd March), as the lock-down was announced and after a talk by our boss who emphasized the cash or lack of it, afterwards all they could bang on about was 'how much will we get?' The rest of us were going 'did you not hear him?'
That attitude infuriates me. What about those bringing up families, with other financial commitments?

Been there all my adult life, seen BCal be absorbed, happily we took many of them on and most had good careers with us and brought a lot of good with them, I've seen people leave us for VS, often to see what working for what was then a small outfit was like, (we used to joke Branson got his engineering expertise from us), some came back.
As I'm sure many know on here, I was in the air on G-BOAF for a Operational Assessment Flight, on 11th Sept 2001.
Shit, for a time we thought the airline might go under, I recall worst case plans including the briefly considered 'BOAC Option'.

This Covid thing, it is worse than all of them combined, it's the cliche come true, world changing.

I do not expect to hear anything, furlough wise, until next week.
Job wise? Anyone's guess.
But isn't that the case for just about everyone in this industry now, I'm far from the most threatened.
I don't know, maybe with a mullered economy there is just too much capacity and will be for years, maybe forever.
Maybe the future for the UK sector is one traditional international, one major LCC, a few niche players, swap LCC/niche for what was called charter 'bucket and spade' and that's a bit like 50 years ago.
If it is, I hope most who have years of employment ahead of them, can play their part. BA/VS/EZY, as many as possible. Once we get to the new abnormal.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Tue Apr 28, 2020 11:56 pm

GDB

Pleased to hear that you are in a decent position, as with you I'm devastated for those who might not be.

This crisis is an existential threat to the industry, and it is disappointing that so many on this thread seem not to realise this. If possible, it would be great for all the present carriers to find their way through this, perhaps to a new normal and at a smaller scale for some time, but able to grow when traffic hopefully gets somewhat back to where it was in a couple of years time.

If VS goes under and BA is mortally wounded, that is a problem.

If BA’s strategy is to significantly downsize, become king of the ashes and rise up with no competition, that is also bad for the UK.

I hope my assessment is wrong, but I would not be shocked at all to see a state owned BA in the relatively near future.
 
GDB
Posts: 13751
Joined: Wed May 23, 2001 6:25 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 1:03 am

DobboDobbo wrote:
GDB

Pleased to hear that you are in a decent position, as with you I'm devastated for those who might not be.

This crisis is an existential threat to the industry, and it is disappointing that so many on this thread seem not to realise this. If possible, it would be great for all the present carriers to find their way through this, perhaps to a new normal and at a smaller scale for some time, but able to grow when traffic hopefully gets somewhat back to where it was in a couple of years time.

If VS goes under and BA is mortally wounded, that is a problem.

If BA’s strategy is to significantly downsize, become king of the ashes and rise up with no competition, that is also bad for the UK.

I hope my assessment is wrong, but I would not be shocked at all to see a state owned BA in the relatively near future.


Not impossible, not to get too political but our PM, when London Mayor, was pro EU, pro immigration and once did a program about history, Turkey and Europe which ended with him making an impassioned case for (pre the current leadership there) Turkey to join the EU for both economic reasons and to encourage moderate Islam! The only time he ever seemed serious.
The most right wing Labour government ever, basically soft Thatcherites, found themselves nationalising the banks in 2008, not on their to-do list until it had to be.
 
tphuang
Posts: 5197
Joined: Tue Mar 14, 2017 2:04 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 1:25 am

the thing is there are competition for BA in British market. Plenty of it. U2 and FR are both viable airlines that are very competitive in the market. Internationally, there is very few markets VS is the only competitor. And if VS's slots go somewhere else, BA would face even more pressure from international airlines. Which could be great for competition. Can you imagine how low fares to Asia could get if more Asian airlines get slots.

As for employment, we are getting lower employment due to demand. If demand comes back, those same workers will be employed by startup airlines or existing airlines. Employment is based on demand, not the number of airlines. British gov't already has a pretty good program for workers displaced due to COVID-19. If you are concerned about companies trimming fat and doing automation to eliminate jobs, that's a problem every industry will be facing in this generation. Airlines should not be getting special treatment.
 
skipness1E
Posts: 4813
Joined: Sun Aug 19, 2007 9:18 am

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 2:00 am

Airlines SHOULD be getting special treatment as profitable viable employers are now closing because of government decisions.

That’s “special treatment” required. I must say I am alarmed by the cold and callous attitude of many, especially US posters on this thread. This is not survival of the fittest capitalist style, this is an economic calamity, and thinking that allowing VS to fail and throwing 8000 people onto Universal Credit in many cases, will somehow balance things out cos Branson is a bit of a tit, is plain armchair quater-backing of the lobotomised variety!

There’s a time to be a fan boy and there’s a time to be a real human being.
 
VS11
Posts: 1661
Joined: Mon Jul 02, 2001 6:34 am

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 2:46 am

skipness1E wrote:
Airlines SHOULD be getting special treatment as profitable viable employers are now closing because of government decisions.

That’s “special treatment” required. I must say I am alarmed by the cold and callous attitude of many, especially US posters on this thread. This is not survival of the fittest capitalist style, this is an economic calamity, and thinking that allowing VS to fail and throwing 8000 people onto Universal Credit in many cases, will somehow balance things out cos Branson is a bit of a tit, is plain armchair quater-backing of the lobotomised variety!

There’s a time to be a fan boy and there’s a time to be a real human being.


I am just going to add that many posters have never worked for an airline and have no idea what it takes to get a single flight off the ground, let alone a fleet. It is the valuable expertise of people like GDB which will be lost if the sector is not supported.
 
Westerwaelder
Posts: 239
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 5:17 am

skipness1E wrote:
Airlines SHOULD be getting special treatment as profitable viable employers are now closing because of government decisions.

That’s “special treatment” required. I must say I am alarmed by the cold and callous attitude of many, especially US posters on this thread. This is not survival of the fittest capitalist style, this is an economic calamity, and thinking that allowing VS to fail and throwing 8000 people onto Universal Credit in many cases, will somehow balance things out cos Branson is a bit of a tit, is plain armchair quater-backing of the lobotomised variety!

There’s a time to be a fan boy and there’s a time to be a real human being.


Bit crass don't you think? Airlines are businesses and many are in peril right now. The sector is shrinking by what, 10 at best maybe 20%? No government can afford keeping all of these people in jobs for which there is no demand. The simple fact is we need to go through this coming recession - together. The fact is also people will lose their jobs. We should look at those jobs that are the .most viable to save as demand for support vastly outstrips what's available.
 
jomur
Posts: 353
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:03 am

VS, like Norwegian will be toast if they don't get new backers and I can't see either of them getting them in the current situation.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:08 am

According to many on here that I see as of late they should just be left to die. I hope however as a fan of our industry that they find a solution and can survive!
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:19 am

Westerwaelder wrote:
skipness1E wrote:
Airlines SHOULD be getting special treatment as profitable viable employers are now closing because of government decisions.

That’s “special treatment” required. I must say I am alarmed by the cold and callous attitude of many, especially US posters on this thread. This is not survival of the fittest capitalist style, this is an economic calamity, and thinking that allowing VS to fail and throwing 8000 people onto Universal Credit in many cases, will somehow balance things out cos Branson is a bit of a tit, is plain armchair quater-backing of the lobotomised variety!

There’s a time to be a fan boy and there’s a time to be a real human being.


Bit crass don't you think? Airlines are businesses and many are in peril right now. The sector is shrinking by what, 10 at best maybe 20%? No government can afford keeping all of these people in jobs for which there is no demand. The simple fact is we need to go through this coming recession - together. The fact is also people will lose their jobs. We should look at those jobs that are the .most viable to save as demand for support vastly outstrips what's available.


The issue is that where a large number of jobs (or certain types of particularly skilled jobs) are lost en masse, those skills are often lost to the industry for good, and they take time to recreate. This means that the recession cuts deeper, recovery takes longer, and the prospect of permanent economic damage takes longer.

In the case of aviation , which is a significant driver for a wide range of economic activity, when the effects are extrapolated up and down the supply chain (ground handlers, airport staff, engine and aircraft manufacturers, lessors, financiers, tourism industry, commerce) the effects can reverberate far wider than just an airline and for a considerable period of time.

People will inevitably loose their jobs. Hopefully it will be much less than not 100% of VS employees or 33% of BA. If this is the commercial reality (perhaps driven by BA’s willingness to accept deep cuts to its employment base instead of state support if it means it drives VS out of business) perhaps a period of nationalisation would be in the best interests of the UK.
 
seansasLCY
Posts: 1097
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:20 am

RvA wrote:
According to many on here that I see as of late they should just be left to die. I hope however as a fan of our industry that they find a solution and can survive!


What incentive is there to run an airline well if your poorly run rival, ends up surviving, which in turn would make your survival even more difficult.

The Government will consider all the options. No Government wants to be responsible for unemployment go up - that’s why they have introduced the furlough scheme etc. However, they also have to make sure that taxpayers cash is spent wisely. An airline which, when looked at over a 10 year period not made a net profit (any profitable years have been wiped out by other years losses) is not looking like a good investment, especially not when their rivals have all made decent profits.
 
RvA
Posts: 380
Joined: Tue Sep 15, 2015 12:37 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:26 am

seansasLCY wrote:
RvA wrote:
According to many on here that I see as of late they should just be left to die. I hope however as a fan of our industry that they find a solution and can survive!


What incentive is there to run an airline well if your poorly run rival, ends up surviving, which in turn would make your survival even more difficult.

The Government will consider all the options. No Government wants to be responsible for unemployment go up - that’s why they have introduced the furlough scheme etc. However, they also have to make sure that taxpayers cash is spent wisely. An airline which, when looked at over a 10 year period not made a net profit (any profitable years have been wiped out by other years losses) is not looking like a good investment, especially not when their rivals have all made decent profits.


I am actually thinking of other companies not government support for VS. VS has a fun brand and product but they have some issues and need to be trimmed and refocused to become profitable. I hope they get the chance for that to happen.
 
Westerwaelder
Posts: 239
Joined: Fri Apr 03, 2020 12:27 pm

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:29 am

DobboDobbo wrote:
Westerwaelder wrote:
skipness1E wrote:
Airlines SHOULD be getting special treatment as profitable viable employers are now closing because of government decisions.

That’s “special treatment” required. I must say I am alarmed by the cold and callous attitude of many, especially US posters on this thread. This is not survival of the fittest capitalist style, this is an economic calamity, and thinking that allowing VS to fail and throwing 8000 people onto Universal Credit in many cases, will somehow balance things out cos Branson is a bit of a tit, is plain armchair quater-backing of the lobotomised variety!

There’s a time to be a fan boy and there’s a time to be a real human being.


Bit crass don't you think? Airlines are businesses and many are in peril right now. The sector is shrinking by what, 10 at best maybe 20%? No government can afford keeping all of these people in jobs for which there is no demand. The simple fact is we need to go through this coming recession - together. The fact is also people will lose their jobs. We should look at those jobs that are the .most viable to save as demand for support vastly outstrips what's available.


The issue is that where a large number of jobs (or certain types of particularly skilled jobs) are lost en masse, those skills are often lost to the industry for good, and they take time to recreate. This means that the recession cuts deeper, recovery takes longer, and the prospect of permanent economic damage takes longer.

In the case of aviation , which is a significant driver for a wide range of economic activity, when the effects are extrapolated up and down the supply chain (ground handlers, airport staff, engine and aircraft manufacturers, lessors, financiers, tourism industry, commerce) the effects can reverberate far wider than just an airline and for a considerable period of time.

People will inevitably loose their jobs. Hopefully it will be much less than not 100% of VS employees or 33% of BA. If this is the commercial reality (perhaps driven by BA’s willingness to accept deep cuts to its employment base instead of state support if it means it drives VS out of business) perhaps a period of nationalisation would be in the best interests of the UK.


Nationalisation is a very thorny issue for a Conservative government. But it's certainly possible as we have seen with steel and some rail franchises. I am not sure it will serve much purpose as there are well run (under normal circumstances) airlines that can handle all of the demand in the foreseeable future. Given the enormous amounts of money needed in the entire economy, it makes no sense propping up businesses that were loss making before Covid or are not adding benefits to the country. Jobs will be lost inevitably and propping up weak companies only prolongues the pain for all involved.
 
DobboDobbo
Posts: 1127
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Wed Apr 29, 2020 8:50 am

Westerwaelder wrote:
DobboDobbo wrote:
Westerwaelder wrote:

Bit crass don't you think? Airlines are businesses and many are in peril right now. The sector is shrinking by what, 10 at best maybe 20%? No government can afford keeping all of these people in jobs for which there is no demand. The simple fact is we need to go through this coming recession - together. The fact is also people will lose their jobs. We should look at those jobs that are the .most viable to save as demand for support vastly outstrips what's available.


The issue is that where a large number of jobs (or certain types of particularly skilled jobs) are lost en masse, those skills are often lost to the industry for good, and they take time to recreate. This means that the recession cuts deeper, recovery takes longer, and the prospect of permanent economic damage takes longer.

In the case of aviation , which is a significant driver for a wide range of economic activity, when the effects are extrapolated up and down the supply chain (ground handlers, airport staff, engine and aircraft manufacturers, lessors, financiers, tourism industry, commerce) the effects can reverberate far wider than just an airline and for a considerable period of time.

People will inevitably loose their jobs. Hopefully it will be much less than not 100% of VS employees or 33% of BA. If this is the commercial reality (perhaps driven by BA’s willingness to accept deep cuts to its employment base instead of state support if it means it drives VS out of business) perhaps a period of nationalisation would be in the best interests of the UK.


Nationalisation is a very thorny issue for a Conservative government. But it's certainly possible as we have seen with steel and some rail franchises. I am not sure it will serve much purpose as there are well run (under normal circumstances) airlines that can handle all of the demand in the foreseeable future. Given the enormous amounts of money needed in the entire economy, it makes no sense propping up businesses that were loss making before Covid or are not adding benefits to the country. Jobs will be lost inevitably and propping up weak companies only prolongues the pain for all involved.


As far as I am aware, immediately before the Covid crisis all UK based airlines were viable businesses, adding benefits to the UK, and were well run.

I don’t know how all the airlines will make it through this crisis, but the government picking favourites is a recipe for long term grievance. Just look at some of the posts on this thread.

I don’t accept helping otherwise viable businesses chart a path through the Covid crisis prolongs the economic pain. I think if the economy is in a position where otherwise viable businesses have been allowed to fail and must start or restart from scratch (which obviously takes time) is what will cause the most damage.

Helping these types of businesses through (they will obviously have to emerge differently to how they went in) provides that springboard for rapid economic growth when we are out of the other side. If the government are unable or unwilling to do this, that is where I think the economic hardship will cut deeper and longer.

It’s a tricky question and we are obviously in uncharted territory. But there has clearly been a lot of hubris and partisan opportunism driving many of the comments in relation to VS (not yours I don’t think) and I think that is a complete misreading if the situation the aviation sector is in if the government does nothing.

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