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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. |
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. |
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. |
Originally Posted by A320baby
(Post 10758518)
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? 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 |
Originally Posted by Zeus
(Post 10758979)
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. |
Originally Posted by dead_pan
(Post 10758179)
Well, if it all goes south we'll all get a timeshare in a lovely Caribbean island. That'll be our holidays sorted forever.
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Originally Posted by beardy
(Post 10759064)
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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Originally Posted by Pearly White
(Post 10759084)
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!
Poor people will spend, but being poor they don't have much to spend. |
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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Originally Posted by 3Greens
(Post 10759210)
Completely and utterly wrong. I’m not UK resident but I pay some U.K. Tax via PAYE.
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Much rather see Virgin survive than BA thanks
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Originally Posted by BBK
(Post 10759350)
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VA co owner raising issues on Bloomberg
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Originally Posted by BBK
(Post 10759350)
Just to try and balance things out a tad.
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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. |
Originally Posted by Livesinafield
(Post 10759352)
Much rather see Virgin survive than BA thanks
In terms of the bigger picture like the effect on the economy and regional connectivity issues, absolutely not. |
Originally Posted by Livesinafield
(Post 10759352)
Much rather see Virgin survive than BA thanks
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. |
Originally Posted by Livesinafield
(Post 10759352)
Much rather see Virgin survive than BA thanks
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Originally Posted by Livesinafield
(Post 10759352)
Much rather see Virgin survive than BA thanks
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