Should ​Virgin​ fly away with our money?

If the worst happens and many G20 countries are in lockdown for three months or more with
minimal travel, hope of a short, sharp recovery from this crisis for the travel industry will
diminish. Falling passenger numbers have reduced the industry’s revenue by 38% compared
to this time last year.

We’ve all seen the charts on the daily national news broadcast and the airline industry is not
the only transport service that is facing extreme pressures. National rail services have
virtually ground to a halt with low passenger numbers. Should there be a bailout package for
them too? For this, I will be mainly focusing on the statement Richard Branson released

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

Sir Richard Charles Nicholas Branson founded the Virgin

group in 1970 from a humble record store on Oxford
Street. Richard now owns Spaceships with Virgin Galactic
(pretty cool). He also boasts the infamous Necker Island,
where sushi is served on naked ladies and villas cost
upwards of £27,000 a week. As you can probably tell, he
is a wealthy man, 7th richest in Britain according to the
Times rich list, with an estimated $4.2 billion net worth.
Why is he begging the UK government for a bailout of
£500 million to save Virgin Atlantic? Surely he could go to
his local Barclays and ask to withdraw that amount of cash
and put it into the struggling company. Well, not quite.
Although he’s worth an immense amount of money, it’ll
mostly be tied up in assets, which means it’s not just there
to be used. Should that be a reason for us to cough up or
could he sell off some of his assets to keep Virgin Atlantic
a flight? Could Delta, the USA’s premier airline company that also owns 49% of Virgin
Atlantic help?

We’ve already seen Virgin Australia this week, which Richard has a 10% share in go into
voluntary liquidation. The closure of Virgin Australia will give Qantas, Australia’s only other
large airline company, a monopoly over the market. The same could happen over UK skies if
Virgin Atlantic falls, British Airways will naturally gain market share. After this global
pandemic, when travel restrictions are lifted, British Airways could go about its business as
the only significant British carry that could provide long-haul flights.

As of 2018, the Virgin Atlantic company employs 8,571 people. In 2019 when Honda
announced it was closing its Swindon A site (a site that employed 3,500) the BBC reported
that it could have a knock-on impact on the local economy and supply chain, putting an
additional 7,000 jobs at risk. A collapse of Virgin could jeopardize other large UK
businesses, including Airbus. Virgin Atlantic owns 39 Airbus jets. John Harrison, the general
counsel and UK chairman of Airbus, which employs 4,000 people in the UK, said that
Virgin’s collapse could have an “extremely negative impact on Airbus group.” This could also
be said about Rolls Royce, the company that makes the engines for these planes. With an
already uncertain economic future in the UK, the Government could do without multiple
largescale companies struggling. That is why Airbus, Rolls Royce, and Heathrow have
written to the government asking them to back a bailout for Virgin. A Bailout in the airline
industry also isn’t unheard of, in fact, it’s happened recently. This month, the UK
Government issued a “commercial loan” of £600 million to keep everyone’s favorite orange
airline, EasyJet, flying during the turbulent times.

So why is there this amount of resentment when Richard Branson asks for some money?
Just like many prominent figureheads of large companies, be it Elon Musk at Tesla, SpaceX,
and The boring company. Jeff Bezos at Amazon, Mark Zuckerberg at Facebook, you could
argue all of them are polarizing figures. Their moral compass is sometimes slightly wayward.
Facebook is selling data to 3rd parties,
Amazon majorly profiting from this global
crisis and Richard Branson is no different.
Since moving away from Britain to Necker
Island in the Caribbean, he has not paid a
penny in personal income tax. In the open
letter written to the 70,000 Virgin Group
employees, he states that the move was
not due to tax reasons and solely because
of his love of the British Virgin Islands.
Okay Richard, whatever you say!.

In the last 14 years, a minimum wage

employee has personally provided a lot
more income tax than Richard Branson
has done. In 2016 the NHS had to settle a
legal dispute with private healthcare group
Virgin Care for an undisclosed amount. It was reported that Virgin care, which is part of the
Virgin group, sued the NHS after it lost out on an £82 million contract. Richard has gone on
record claiming that the Virgin group did not profit from this and would never benefit from the
NHS. Both of these cases leave a bitter taste in your mouth when he publicly asks for a
bailout, which comes in part from the British taxpayer.

What are some of the options, then? The UK could nationalize the company, keeping it
afloat and securing many thousands of jobs. Richard might also try to save it himself,
realising he might not get the bailout he so desperately wants. This may force his hand and
make him sell a part of his empire to save another. I would do the latter, and the wealth is
undoubtedly there for him to save it himself. Bailing out Virgin Atlantic would certainly leave
the door open to other companies in the travel industry to ask for the same.