Sunday, 26 April 2020

Branson seeking buyer for Virgin Atlantic and still talking to UK Government over rescue deal

News agency Reuters is reporting that Virgin Atlantic is still holding talks with the British Government over a massive bailout package to help the airline survive the crippling effects of the global aviation shut down because of the coronavirus COVID-19 pandemic.

However, Richard Branson's Virgin Group,  which owns 51% of the airline is now more focused on finding a buyer for the carrier as the changes of state aid seems to be reseeding as the days drag on.  According to the media, Branson had set a May deadline for a buyer to be found, which has been disputed by a spokesperson for the group. "Because of significant costs to our business caused by unprecedented market conditions which the COVID-19 crisis has brought with it, we are exploring all available options to obtain additional external funding," Reuters report she said,  adding talks with the British government were “ongoing and constructive.”

Delta Air Lines,  which owns 49% of the airline has remained silent on the issue of the potential sale of Virgin Atlantic but was rumoured to be seeking additional finances in order to take a greater stake in the airline. Other interested parties according to media speculation include the government of Singapore via its Temasek operation, Centerbridge Partners and Cerberus Capital Management. Yet, despite much speculation and gossip, there does not appear to be one option that is more credible than at this time of crisis for the aviation industry. Especially as nobody knows the true longterm impact on future long haul travel in what was already an oversaturated market prior to the current pandemic.  

Branson had said last week that the airline would only survive if it got government aid, “This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back,” Branson said in a blog post to staff last Monday.

Whilst it is unclear what the future holds at the moment, I feel we should know more about the future of Virgin Atlantic by the end of business on 8th May.

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