This comes from the FT this morning...
http://news.ft.com/ft/gx.cgi/ftc?pag...ding=transport
Sir Richard Branson's Virgin Group was forced to extend an emergency credit facility for Virgin Express, its troubled low-fare airline subsidiary, as the carrier struggled to survive amid mounting losses.
The existence of the $32.5m credit facility from Barfair, a wholly-owned subsidiary of Virgin Group Investments, was revealed on Thursday as the Brussels-based airline, which is 59 per cent owned by Virgin Group, said that net losses last year jumped more than ten-fold to E65.2m from E5.7m in 1999.
Virgin Express said it had drawn down $19.5m of the loan facility by the end of last year but executive chairman David Hoare insisted that its restructuring efforts were on course to turn the company around.
Last year's losses included a E17.5m restructuring charge to cover a radical shrinking of the company as it struggled under the burden of intense competition at its main Brussels base; a fuel bill which nearly doubled; and the weakness of the euro.
The company's response was to cut unprofitable routes, halve the size of its fleet and get out of the charter business. It also said it would try to sell or close its Irish operation. The airline has so far found no buyer.
Operating losses climbed to E46.7m from E7.3m in 1999, as the restructuring led to a slight fall in revenue to E289m.
Virgin Express expressed concern about the continued uncertainty about Sabena's future. Speculation is growing that Switzerland's SAirGroup, which has huge problems of its own, is looking to divest its 49.5 per cent stake.
The most profitable part of Virgin Express' business is a deal in which it operates the Brussels-London route for Sabena. The Belgian flag carrier is currently trying to renegotiate the terms of that deal.
Mr Hoare also said he had "made strong representations" to both the Belgian government and the European Commission about a recent decision by the state to inject E100m into Sabena as part of its restructuring. "This unfair subsidy must not be allowed to continue," he said.