Spectators Balcony (Spotters Corner) If you're not a professional pilot but want to discuss issues about the job, this is the best place to loiter. You won't be moved on by 'security' and there'll be plenty of experts to answer any questions.

Virgin Atlantic

Old 25th Apr 2020, 17:24
  #341 (permalink)  
 
Join Date: Nov 1998
Location: south coast
Posts: 417
Received 0 Likes on 0 Posts
Originally Posted by scroggs
Virgin Atlantic (not Richard Branson) is not seeking a 'hand out'. It is looking for a line of credit of approximately £500m on commercial terms. If it can achieve that without guarantees from the UK government, I'm sure it will happily do so. However, this is a very difficult environment from which to make projections of future revenue, and so UK banks (which are obligated under the current government guarantee schemes to protect small and medium sized businesses by offering loans without preconditions, yet aren't doing so) are being extremely conservative. Ironic, given that they were rescued 12 years ago by unlimited grants from government plus a policy of 'quantitative easing' which effectively removed the consequences of their foolhardy practices of the previous 10 years.

Virgin Atlantic is not the most profitable airline, but it is a major player in the marketplace, and has around 25% of UK-US traffic. It was looking forward to both returning to profit and some moderate expansion in the short to medium term. There is no logical reason to believe that it cannot continue to hold its own in whatever shape the long-haul market takes after things reopen. As happened after the various shocks that the market has had in the last 25-30 years, there will be a short-term correction before the market returns to growth. It's up to the treasury (and its advisers Morgan Stanley) to assess whether or not the financials make a commercial loan viable or not, and what actions need to be taken by the company to improve its position from their perspective. It should also be borne in mind that the problems for the entire industry were not brought on by the actions of the industry (unlike the banks), but by the actions of governments in shutting down international travel.

However, the reaction by the public - and, surprisingly, people in this forum - to Virgin asking for help has been entirely emotional, uninformed, and essentially spiteful, and fuelled essentially by a distaste of wealth without any consideration of what that wealth represents in terms of the employment it has created, and the fact that it is almost entirely shareholdings in businesses and thus to be released for other purposes would require those shareholdings to be sold - at which point the notional extent of that wealth would be seen to be far less than the Sunday Times estimated in 2019.

The Virgin companies are great places to work, and look after their employees extremely well. Their existence generally works well for their customers as well, though inevitably there are individual stories where that is not so, as is the case for every large company. The UK-registered Virgin companies (which includes Virgin Atlantic) pay their taxes in UK, as of course do the vast majority of their employees.

I am about to retire from the industry, so the future of Virgin Atlantic will not affect me personally, but it would be a crying shame if its 10,000 employees and their families were thrown on the scrapheap because of the braying hoards of uninformed commentators who simply want to stick a finger up to Richard Branson
Very well explained Scroggs - pity we couldnt get this to the public domain / press somehow....
Barcli is offline  
Old 25th Apr 2020, 17:40
  #342 (permalink)  

Chief PPRuNe Pilot
 
Join Date: May 1996
Location: UK
Age: 68
Posts: 16,602
Likes: 0
Received 0 Likes on 0 Posts
As Scroggs says above, Virgin Atlantic isn't the most profitable airline but it has been struggling for many years against BA with limited access to slots at LHR. As an employee myself with only 10 months to retirement, I can attest to the fact that Virgin has some of the best terms and conditions in the industry for its pilots. After over 15 years with them, it will be sad if they do not survive this crisis but as Scroggs points out above, it won't affect me personally too much. I do however worry about all my colleagues and all the employees of the company who are at risk of being thrown on the scrapheap should the company fail due to not being able to raise sufficient capital to last out the current slump.

At the moment, the company is flying cargo only flights with the B789 and A35K. Those operating to HKG and PVG are potentially soul crushingly long duties. Operated with 7 pilots (3 crews of 2, 2 and 3) and 4 cabin crew fire watch, the duties are over 24 hours and possibly up to 30 hours. Whilst the dispensation has been provided by the CAA for these out and back single duty period trips, I am personally glad that I don't have to operate them as I'm currently furloughed. 24-30 hours in an aircraft, no matter how look at it is not very nice and I applaud the crew who do operate these flights, the majority of which are on behalf of the NHS bringing PPE and other kit back.

Whilst some on here flippantly assume that should the company not survive then most of the employees will be picked up by whoever steps in to fill the gap, it is never quite so simple. Often, it takes a long time for these unfortunate victims to get re-employed and how many would like to bet that the Ts & Cs of any new entrant will never be as good as they have right now. It just pains me to read some of the remarks from posters who obviously have little idea of what they say and obviously just enjoy being part of the baying mob sticking two fingers up at Richard Branson as though he is going to be the one who suffers the most should the company fail. Virgin Atlantic is its 10,000 employees who make the operation work and it is those same employees who month in and month out her fill the HMRC coffers with their income tax and NICs.

Someone worked out recently that the pilots alone will contribute more than £850m to the treasury over the next 20 years. SO let's have a bit of common sense when posting on here, a forum originally designed for professional pilots. Outsiders views are accepted but think about how you appear to us if you go slinging unresearched vitriol.
Capt PPRuNe is offline  
Old 25th Apr 2020, 17:45
  #343 (permalink)  
 
Join Date: May 2006
Location: UK
Posts: 115
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by MikeAlpha320
Several have cited a 'return to profitability' - was this not massively dependant on expansion (which helpfully coincided with the 3rd runway debate)? If an airline hasn't been making money in recent years given the market we've been operating in why would it make money in the tough years that will follow?
No, that was part of a longer term expansion plan. The plan for return to profitability had a target of 2021 but was on course to be reached a year early until Coronavirus happened.
zero/zero is offline  
Old 25th Apr 2020, 18:09
  #344 (permalink)  
 
Join Date: Nov 1999
Location: UK
Posts: 285
Likes: 0
Received 0 Likes on 0 Posts
I don’t think the Government will be swayed by some bad press and a few flimsy petitions against Mr Branson. What they will be looking at is will the loan be repaid? Virgin has struggled to make significant profits in probably the most lucrative time in airline history. Look at the profits their nearest neighbour made in the last few years. The future is going to show a massive decrease in demand for airline travel. Virgins first request for help was turned down as their future business plan was too optimistic. How can they repay a £500 million loan in a massive recession when they couldn’t make a profit in the good times?

Do France and Germany have two full service airlines? The treasury have so many demands on them, I don’t envy their task deciding but I can totally understand how those inside the brand feel so strongly.. the banks advising will be doing this purely on the financials thankfully and not on tabloid press reports...
fruitbat is offline  
Old 25th Apr 2020, 21:54
  #345 (permalink)  
 
Join Date: Feb 2020
Location: London
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Seems that Branson has decided to sell after he failed to get a loan from the Government.



Branson races to find Virgin Atlantic buyer

Sir Richard Branson has set a deadline of the end of May to find a buyer to save stricken airline Virgin Atlanic from collapse

Sir Richard Branson is seeking a buyer for Virgin Atlantic and has set an end-of-May deadline to save the airline from collapse after a taxpayer bailout proved beyond his reach.

The Sunday Telegraph has learnt that the pursuit of a £500m government package has been effectively shelved and that the airline is now focused on securing new private investment in the shadow of potential insolvency.

Houlihan Lokey, the investment bank hired by Virgin Atlantic, has sounded out more than 100 potential financial institutions, with “all options on the table”, sources said.

Roughly 50 potential investors have asked for information and will be whittled down to a handful of bidders.


Telegraph
cashash is offline  
Old 26th Apr 2020, 02:05
  #346 (permalink)  
 
Join Date: Apr 2020
Location: London
Posts: 3
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by cashash
Seems that Branson has decided to sell after he failed to get a loan from the Government.
Just to add to this, I'm not sure that he has failed completely to get a loan - the Government have asked him to resubmit his bid, the FT reporting that they wanted more evidence that shareholders were not able to contribute, and to make the 2-5 year business plans that VS had included more realistic. So a loan is potentially still on the table, however the ball is in Virgin Atlantic's court to resubmit their bid. It seems that VS are instead looking elsewhere for a saviour.

On the face of it though it looks like a shaky business proposition: very few assets, massive debts including $200m to Delta as well as a lot of refunds, and potentially licensing fees for the use of the brand with a backdrop of a very unreliable market over the next months, even longer?
peacheyglobes is offline  
Old 26th Apr 2020, 09:49
  #347 (permalink)  
 
Join Date: Jan 2008
Location: UK
Posts: 29
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by cashash
Seems that Branson has decided to sell after he failed to get a loan from the Government.



Branson races to find Virgin Atlantic buyer




Telegraph
Here’s a non-paywalled version if anyone needs it

Branson races to find Virgin Atlantic buyer
Andy D is offline  
Old 26th Apr 2020, 09:56
  #348 (permalink)  
 
Join Date: Dec 2007
Location: EU
Posts: 25
Likes: 0
Received 0 Likes on 0 Posts
News Flash

Virgin Atlantic will survive, with or without Government assistance. The sad difference will be in the number of job losses. But survive it will. History has shown us that the Virgin haters out there are far far outnumbered by the Virgin Lovers. And our passion to survive will of course, eclipse anyones desire to see us fail. And we actually have far more experience than our name suggests!

We have thoroughly enjoyed our 36 years of proving the critics wrong about our viability, profitability and very importantly our desirability. 36 years of keeping up with and at times beating some pretty strong and sometimes down right devious competition. People say we never make money. Well we have always had to spend heavily and fight tooth and nail to maintain our position at Heathrow and Gatwick, which are some of the most fought over slots in the world. We have had to continually reinvest and reinvent ourselves to make sure we have a modern, clean and above all safe product to give our passengers. To have survived this long we must have got something right! Virgin employees are rather well looked after and we come to work with a smile on our faces, enjoying a pretty well funded and healthy working environment. We feel safe in the knowledge that the company is being run well and by people we trust and that have actually made some pretty good provisions for any rainy days. Richard is very protective about this part of his businesses and I feel his recent desire to seek assistance and assurance from all possible sources, including the U.K. government, has given some of the vultures out there, the scent of blood. But these vultures are mistaken if they think there is a carcass in the offing! He may have to dilute his share of the business, but he just wanted to make sure it survives, and this has drawn attention. He does that from time to time.

We started this journey 36 years ago with one single aeroplane. And fought hard to establish our brand and our very unique Virgin style, that despite the haters out there, has flourished and is clearly loved by those that choose to come back to us time and time again, in-spite of the machinations of a few very powerful adversaries. And then there is the workforce who time after time bend over backwards to get the job done and deliver for the customers and each other. We love this company and will fight to ensure it continues to be such a great place to work.

Right now we have only a quarter of our aeroplanes flying, but these few machines are gainfully employed on cargo only operations and every day sees their payloads growing, and with more and more new cargo contracts being taken on, we will soon need to get more of the fleet back flying to help with this.

This is all helping to minimise our daily cash burn and make our cash reserves go a little further. But we can all see what is in front of us, we will now need to make some very painful sacrifices in order to adapt and reconfigure to a more sustainable size, and emerge from this trimmer but fighting fit, for what will be an even tougher and very different market place.

It is heart breaking that we will have to make some very difficult but necessary cuts, and say goodbye to some of our family and friends, and those of us that remain will no doubt be asked to also make sacrifices, tighten out belts and go that little bit further. But we will do what it takes to survive. Our small size will give us the ability to adapt quickly and decisively. But I’ll say it again, we will survive!

We are going to be a thorn in Willie Walsh’s side for a long time yet! But we also wish our friends at BA and all other airlines well! As an industry and as a Company we will get through this together. #Bekind

Last edited by virgin mary; 26th Apr 2020 at 11:53.
virgin mary is offline  
Old 26th Apr 2020, 09:58
  #349 (permalink)  
 
Join Date: Sep 2008
Location: Scotland
Posts: 890
Received 6 Likes on 2 Posts
I suspect it’s more likely this is an exercise in proving to HMG that there is no commercially viable source of capital and thus a government loan is required.

My thoughts with my friends either side of the door at VS. Many of us may be sharing your situation soon.
Jwscud is offline  
Old 26th Apr 2020, 11:05
  #350 (permalink)  
 
Join Date: May 2002
Location: Courchevel
Posts: 848
Likes: 0
Received 0 Likes on 0 Posts
There's a lot of hopeful people posting which is totally understandable either employed or used to work there. I'm afraid it really looks like things are stacked massively against Virgin Atlantic, survival is unlikely given the money they owe to Delta and a complete lack of assets to secure treasury/bank loans against. Hopefully Richard Branson can come up with a buyer in the coming days but who wants to buy an airline in a depression and what type of an aviation market are we all coming back to after May. It just doesn't look good at all for Virgin Atlantic.
Count von Altibar is offline  
Old 26th Apr 2020, 11:28
  #351 (permalink)  
 
Join Date: Apr 2020
Location: London
Posts: 3
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Jwscud
I suspect it’s more likely this is an exercise in proving to HMG that there is no commercially viable source of capital and thus a government loan is required.

My thoughts with my friends either side of the door at VS. Many of us may be sharing your situation soon.
It wouldn't seem to prove to HMG that as a dominant shareholder Virgin Group (including SRB himself) are unable to raise these funds. It may be saying 'look, we tried' but this doesn't show how SRB couldn't raise funds through for instance equity sale of his Virgin Galactic enterprise, or mortgaging of his own assets including Necker Island.
peacheyglobes is offline  
Old 26th Apr 2020, 11:38
  #352 (permalink)  
 
Join Date: Mar 2007
Location: in my own world
Posts: 143
Likes: 0
Received 1 Like on 1 Post
Kirks gusset wrote a pointless post:

Why on earth didn't Branson just let the Virgin Board CEO do the talking? he's the one who's now made this a personal crusade.
So the other headline would have been, 'Branson hides on his island letting the crew fight his battles...'

xray one is offline  
Old 26th Apr 2020, 11:43
  #353 (permalink)  
 
Join Date: Jan 2003
Location: Manchester
Age: 45
Posts: 615
Likes: 0
Received 0 Likes on 0 Posts
They'll be another issue here. If VS is bailed out then BE and TCX will go mad. One rule for one, one for another.....
Ex Cargo Clown is offline  
Old 26th Apr 2020, 11:56
  #354 (permalink)  
 
Join Date: Oct 1998
Location: UK
Posts: 21
Likes: 0
Received 0 Likes on 0 Posts
I think you'll agree those were different times, Cargo C. Even though FlyBe went bust just after the virus started biting, the fact they went so quickly was because they had already dug a deep hole in the years before. Virgin was a good running airline that - had corona not derailed things - would still have been ticking along nicely. And for years, if not decades, to come. So an invalid argument, I'm afraid.
Bora Bora is offline  
Old 26th Apr 2020, 11:56
  #355 (permalink)  
 
Join Date: Nov 2010
Location: EU
Posts: 626
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Ex Cargo Clown
They'll be another issue here. If VS is bailed out then BE and TCX will go mad. One rule for one, one for another.....
This has already been mentioned and answered. The difference is BE and TCX were struggling when times were good, Virgin weren’t. COVID was just the final straw for BE having nearly collapsed a year prior.
pudoc is offline  
Old 26th Apr 2020, 12:05
  #356 (permalink)  
 
Join Date: Feb 2005
Location: Botswana
Posts: 887
Likes: 0
Received 0 Likes on 0 Posts
Flybe were always going to go to the wall in March. I’d already seen an interview with Michael O’Leary a few weeks earlier where he’d said that’s when their money would run out. Now admittedly he’s called a lot of failures which subsequently didn’t happen but he must have crunched the numbers. Coronavirus played very little part (if any) to the demise of Flybe in the end.
RexBanner is offline  
Old 26th Apr 2020, 12:44
  #357 (permalink)  
 
Join Date: Jun 2008
Location: North Pole
Posts: 38
Received 0 Likes on 0 Posts
Does the airline own the aircraft?
foxvc10 is offline  
Old 26th Apr 2020, 12:58
  #358 (permalink)  
 
Join Date: Feb 2002
Location: UK
Age: 58
Posts: 3,440
Received 126 Likes on 65 Posts
Originally Posted by virgin mary
News Flash

Virgin Atlantic will survive, with or without Government assistance.....

We are going to be a thorn in Willie Walsh’s side for a long time yet! But we also wish our friends at BA and all other airlines well! As an industry and as a Company we will get through this together. #Bekind
Walsh was supposed to have stepped aside by now. He has stayed on to get through this uncertain time.

If Virgin survive it won't be Walsh you have to worry about.
TURIN is offline  
Old 26th Apr 2020, 15:06
  #359 (permalink)  
 
Join Date: Nov 2010
Location: EU
Posts: 626
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by foxvc10
Does the airline own the aircraft?
A decent proportion of them.
pudoc is offline  
Old 26th Apr 2020, 18:10
  #360 (permalink)  
 
Join Date: Nov 1999
Location: UK
Posts: 285
Likes: 0
Received 0 Likes on 0 Posts
Eye opening figures when you think about it..

“Virgin accumulated £211m of losses last decade for a negative 0.1% operating margin. British Airways made £11 billion at a 10% margin”

https://www.forbes.com/sites/willhor.../#59fdbf3a6ea2


fruitbat is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.