Virgin Atlantic
Join Date: Sep 2008
Location: Scotland
Posts: 821
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.
My thoughts with my friends either side of the door at VS. Many of us may be sharing your situation soon.
Join Date: May 2002
Location: Courchevel
Posts: 841
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.

Join Date: Apr 2020
Location: London
Posts: 3
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.
Join Date: Mar 2007
Location: in my own world
Posts: 136
Kirks gusset wrote a pointless post:
So the other headline would have been, 'Branson hides on his island letting the crew fight his battles...'
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.
Join Date: Oct 1998
Location: UK
Posts: 20
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.
Join Date: Nov 2010
Location: EU
Posts: 618
Join Date: Feb 2005
Location: Botswana
Posts: 866
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.
Join Date: Feb 2002
Location: UK
Age: 55
Posts: 3,034
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
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
If Virgin survive it won't be Walsh you have to worry about.
Join Date: Nov 1999
Location: UK
Posts: 285
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
“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
Join Date: Mar 2007
Location: in my own world
Posts: 136
fruitbat wrote:
There are many reasons why there is a large discrepancy between the 2 Airlines - size is your starter for ten. Some are of Virgin's making others not. Virgin's main mistake was the purchase of 19 A340-600s (4 engines 4 long haul) with out a doubt the 777 was a far better option. As a long haul only Airline we don't have the luxury of a short haul operation to feeds us - we can discuss the failing of Little Red at a later date, suffice to say operating only a handful of destinations (minus GLA) was always going to be difficult. We didn't get gifted a brand new terminal (I don't mean free by gifting - it's the ability to have your own brand new terminal) As has been said before, the ducks were now in a row with brand new fleet of A330s Neo's from next year, A350s and B789s, 2 engine fuel efficient aircraft, a better route structure and a feeded in the USA with Delta. We would never make Billions but we would employ 10,000 people, give a great service and put £350/400 million per year in the treasuries coffers.
Really, what's wrong with that?
Eye opening figures when you think about it..
Really, what's wrong with that?
Join Date: Mar 2013
Location: Cheltenham, UK
Posts: 133
Join Date: Oct 2002
Location: London UK
Posts: 6,670
However can VA anticipate this level of profit, to put that much corporation tax into the UK government Treasury, given that
Those losses despite being centred at what is probably the best O&D hub in the world for business travel demand.
As I understand it, Virgin Atlantic may do fine financially each year, but under the "Starbucks Method" of accounting, whatever level of profit they anticipate in any year is then sucked out beyond the reach of Her Majesty's Government by Virgin Group Holdings Ltd, based beyond the taxman's reach in an obscure accountant's office in the British Virgin Islands (not one of VA's Caribbean destinations; largest aircraft serving there is an ATR), which invoices for the "Use of Brand", which appears in Virgin Atlantic's accounts as a "marketing expense".
Originally Posted by fruitbat
“Virgin accumulated £211m of losses last decade for a negative 0.1% operating margin. British Airways made £11 billion at a 10% margin”
Originally Posted by fruitbat
As I understand it, Virgin Atlantic may do fine financially each year, but under the "Starbucks Method" of accounting, whatever level of profit they anticipate in any year is then sucked out beyond the reach of Her Majesty's Government by Virgin Group Holdings Ltd, based beyond the taxman's reach in an obscure accountant's office in the British Virgin Islands (not one of VA's Caribbean destinations; largest aircraft serving there is an ATR), which invoices for the "Use of Brand", which appears in Virgin Atlantic's accounts as a "marketing expense".
Join Date: Nov 2011
Location: Somewhere close to me
Posts: 715
Someone lending them money would want to do due diligence, and see if they will be viable to pay "our" money back again.
I am guessing who ever checked the company and asked them to make a new application for government funds, can't have been happy with what they saw.
I can set up a company, and turn around large amounts of money, and I can also spend on all kind of relevant business expenses, which benefits me so I pay less tax. However if I go to the bank, and show no profits, they will not give me a loan, just because I tell them I can pay all my staff, but over a decade I have made negative profit, they not going to be very convinced that I will be able to pay them back the loan I am applying for.
Join Date: Jan 2008
Location: UK
Posts: 26
As I understand it, Virgin Atlantic may do fine financially each year, but under the "Starbucks Method" of accounting, whatever level of profit they anticipate in any year is then sucked out beyond the reach of Her Majesty's Government by Virgin Group Holdings Ltd, based beyond the taxman's reach in an obscure accountant's office in the British Virgin Islands (not one of VA's Caribbean destinations; largest aircraft serving there is an ATR), which invoices for the "Use of Brand", which appears in Virgin Atlantic's accounts as a "marketing expense".
Interestingly, the initial stage of licensing seems to be run through a UK company – VAL TM Limited – and in the five financial years 2014–18 it received £61m in royalty payments from Virgin Atlantic
£ (,000)
2014 10,745
2015 12,183
2016 12,329
2017 12,637
2018 13,157
Even from a quick wander around companies house (and there are other data sources), it's possible to tease quite a bit of the corporate structure and cashflows apart if someone has time, will of course loose sight when the cash is transferred to BVI companies and family trusts though