Virgin Atlantic

[JobsaGoodun]

If we're making a clinical decision in respect of funding then the decision for Government should be relatively straightforward.

For monies provided in commercial terms, whether from the bank or the Government...
1) What can the funds be secured against in order to protect the lender?
2) What is the ability for the borrower to repay the funds.

When Flybe failed, it did so because it's shareholders (which included VS) were either unable or unwilling to inject more funds into the business. In turning to Westminster for help, the Government eventually chose not to lend with reports at the time suggesting that there was nothing to anchor the loans against. Flybe had already sold off/mortgaged its available assets just to get to as far as it did. Whilst it's clear that keeping VS in business ensures employment for a great many people, who will then continue to contribute income tax etc. this shouldn't be taken into consideration, just as it wasn't when Flybe failed.

Personally, if VS has sufficient assets, be they owned aircraft, engines, aircraft spares, property/real estate etc that they can use as collateral for a loan, then I see no reason for them not to have access to funds from Westminster. Personally, I would prefer it if the level of investment coming from Government were match funded by equity raised by the current shareholders as I think there is a need that both SRB and Delta to have skin in the game to avoid the taxpayer taking all the risk.

With DL have already stated that they are either unable, or unwilling to inject more funds into the business it's down to SRB. First and foremost he's a businessman and a shrewd one at that - ask any previous Flybe shareholder....but I'm not sure which side of the fence he'll fall.
It's pretty clear that VS is the baby of the Virgin Group, hell he sold Virgin Records to keep it afloat (and recently demonstrated his love of the business again by choosing not to cede control via the recent AF/KLM deal), however if he sees more long term value in putting the business into administration and then establishing a phoenix from the wreckage, I wouldn't put it past him to take this route.

Much as I'd like to buy the #virginfamily guff, I'm not wholly convinced. Business is business after all.
I doubt you'll find many Flybe employees enjoyed a warm and fuzzy feeling having supposedly been 'loved' by Virgin.