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Virgin Atlantic

Old 22nd Apr 2020, 09:13
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Sadly the crux of the issue is Virgin is a strong brand, but a poor business. When you want people to loan you money , even the government, you need to be viable. The figures tell a grim story.

If Virgin do come through this there will need to be significant changes, smaller fleet, less flying from the regions and big changes in manpower. None of the employees are to blame but present and past management have not served them well, failing to make the changes required to make it a competitive operation.

As for the argument about competition, there will always be someone to fill the gap should they fold, but let's try to keep another British Airline from becoming history.

Hope there second attempt at convincing the government has some serious business plan behind it to convince those involved...I am guessing the first didn't.

Branson's letter was poor, as has been his response to date. Not a great role model.

Last edited by 8029848s; 22nd Apr 2020 at 09:28.
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Old 22nd Apr 2020, 09:15
  #242 (permalink)  
 
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https://www.theguardian.com/commenti...ranson-bailout

Worth a read. So many businesses need saving. It is hard to see why this should be one of them as there will be excess airline capacity for a long time to come.
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Old 22nd Apr 2020, 10:02
  #243 (permalink)  
 
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In economics you will read of the multiplier effect.
If I earn £10 I will probably save 10% i.e. £1 and spend the remaining £9.
The people I spend the £9 will probably save 10% =90p and spend the remaining £8.90
The people they spend their £8.90 with will save 10% i.e 89p and spend the remaining £8.01
etc etc etc the amount earned multiplies.

The same applies in reverse.

If the Treasury allow companies to go bust due to short term shortfalls the effect will be much more than the amount saved by not loaning companies the necessary funds.
In the long term the whole economy goes down the drain.
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Old 22nd Apr 2020, 10:18
  #244 (permalink)  
 
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Originally Posted by A320baby
stole this from someone

Just running the numbers on Virgin Atlantic, based on Dec 2018 figures:
- £2.7b turnover = £0 VAT (zero-rated)
- Operating profit of -£45m = £0 corporation tax (because they were loss making, presumably they paid 20% tax on past profits of £150-200m and aim to get back to this)

However...
- Salaries of £407m = £81m PAYE (20% base rate, some will be higher rate of course so this is low estimate) + £8.1m (2% national insurance)
- Air passenger duty (£150 per UK outbound long-haul flight) x 5.19m passengers (2018, Statistica) = £778.5m

Total: £867.6m tax contributions per year

Most of the media coverage I've seen looks to be about Richard Branson, but it feels like lazy journalism. Surely it's not about him, it's about saving 8,571 jobs which contribute £407m directly into the UK economy and a further £867.6m in tax to HMRC.

Let me know if I'm missing anything?
Not sure it's as straightforward as that…

Given the timescales being suggested for air travel to recover it seems a proportion of that PAYE / NI (less staff needed), and APD (less passengers flying) is already lost, and that's going to be the case for all airlines

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Old 22nd Apr 2020, 11:22
  #245 (permalink)  
 
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Originally Posted by Zeus
In economics you will read of the multiplier effect.
If I earn £10 I will probably save 10% i.e. £1 and spend the remaining £9.
The people I spend the £9 will probably save 10% =90p and spend the remaining £8.90
The people they spend their £8.90 with will save 10% i.e 89p and spend the remaining £8.01
etc etc etc the amount earned multiplies.

The same applies in reverse.

If the Treasury allow companies to go bust due to short term shortfalls the effect will be much more than the amount saved by not loaning companies the necessary funds.
In the long term the whole economy goes down the drain.
Ah, the 'trickle down effect' beloved darling of Thatcher and Reagan. It never really worked as intended. Large amounts of money were not spent and the wealth gap widened.
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Old 22nd Apr 2020, 11:45
  #246 (permalink)  
 
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Originally Posted by dead_pan
Well, if it all goes south we'll all get a timeshare in a lovely Caribbean island. That'll be our holidays sorted forever.
Although, of course, if there are no airlines when all goes south, you may have to row there.
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Old 22nd Apr 2020, 11:47
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Originally Posted by beardy
Ah, the 'trickle down effect' beloved darling of Thatcher and Reagan. It never really worked as intended. Large amounts of money were not spent and the wealth gap widened.
Because they gave tax cuts to the wealthy. Try giving more money to really poor people - they will spend every penny of it just to survive!
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Old 22nd Apr 2020, 12:16
  #248 (permalink)  
 
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Originally Posted by Pearly White
Because they gave tax cuts to the wealthy. Try giving more money to really poor people - they will spend every penny of it just to survive!
I agree. The concept was that the more there was to spend, the greater the trickle down. But it didn't work.
Poor people will spend, but being poor they don't have much to spend.
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Old 22nd Apr 2020, 13:28
  #249 (permalink)  
 
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I know this is pedantry to the extreme (and I apologise) but the IATA code for Virgin Atlantic is VS. VA is Virgin Australia. Kind of grates if people are trying to present otherwise “knowledgable” opinions.
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Old 22nd Apr 2020, 13:50
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Originally Posted by 3Greens
Completely and utterly wrong. I’m not UK resident but I pay some U.K. Tax via PAYE.
You only pay tax on the percentage of time spent working in the uk. If you live and work in Mongolia but have a company in the uk you would be personally liable to pay tax in Mongolia. You most likely wouldn't pay yourself via PAYE but via dividends. Your company would pay various taxes in the UK.
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Old 22nd Apr 2020, 15:49
  #251 (permalink)  
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https://www.independent.co.uk/travel...-a9477156.html

Just to try and balance things out a tad.
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Old 22nd Apr 2020, 15:52
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Much rather see Virgin survive than BA thanks
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Old 22nd Apr 2020, 15:53
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Originally Posted by BBK
https://www.independent.co.uk/travel...-a9477156.html

Just to try and balance things out a tad.
To be honest it is written by Simon Calder so it must be true.
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Old 22nd Apr 2020, 16:00
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VA co owner raising issues on Bloomberg
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Old 22nd Apr 2020, 16:00
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Originally Posted by BBK
Just to try and balance things out a tad.
I'm unable to post a link as I have less than 10 posts, but Marina Hyde's article in yesterday's Guardian "Richard Branson's bailout plea proves there's no one more shameless" provides a counterbalance!

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Old 22nd Apr 2020, 16:35
  #256 (permalink)  
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WARNING!

Moderating the inappropriate posts on this thread, and responding to a number of reports of rude posts is getting to be too much work. I have not locked the thread, but I'm thinking about it. In the midst of the inappropriate posts is some good discussion, which I would like to encourage. If you would like the thread to continue, don't abuse it.

One of your moderators.
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Old 22nd Apr 2020, 16:37
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Originally Posted by Livesinafield
Much rather see Virgin survive than BA thanks
In terms of customer service and possibly(???? I wouldn’t know, never worked for either of them) Ts&Cs and working conditions, then yes.
In terms of the bigger picture like the effect on the economy and regional connectivity issues, absolutely not.
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Old 22nd Apr 2020, 16:56
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Originally Posted by Livesinafield
Much rather see Virgin survive than BA thanks
Can I ask why?

One is an extremely profitable business and the other not?

Are you happy to pay the extra tax to support businesses like Virgin?

Not sure the Italian approach to economics works in the real world.

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Old 22nd Apr 2020, 16:56
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Originally Posted by Livesinafield
Much rather see Virgin survive than BA thanks
Translates as "I would much rather 45000 lose their jobs than 8500".
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Old 22nd Apr 2020, 17:05
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Originally Posted by Livesinafield
Much rather see Virgin survive than BA thanks
You are Richard Branson and I claim my five quid.
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