Yahoo Finance Richard Branson’s ominous warning in open letter to Virgin staff
Billionaire Virgin founder Richard Branson has penned an open letter to staff, pleading for government support as the company’s Australian arm announces it has entered voluntary administration.
Branson said the company would try to keep the airline going, however it would need government support in the form of a commercial loan to achieve that.
“Over the five decades I have been in business, this is the most challenging time we have ever faced,” Branson said.
“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it.
Also read: Virgin Australia collapses, 16,000 jobs on the line
Also read: The Qantas, Virgin flights back in the air
“Without it there won’t be any competition left and hundreds of thousands more jobs will be lost.”
Branson said its Australian arm was “fighting to survive”, and warned against a Qantas monopoly.
“If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies. We all know what that would lead to.”
The Virgin founder stressed the airline would pay back any loans, and would offer his British Virgin Islands island, Necker, as security for any loan.
“As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the group," he said.
Branson also thanked staff for their efforts.
“It really breaks my heart to see the impact this pandemic is having across people’s lives and businesses around the world,” he said.
“Thanks so much once again to all of you, you continue to inspire me every day.”
Virgin bailout plea
It follows Virgin’s attempt at seeking a government bailout to the tune of $1.4 billion in March.
An ASX announcement added that this was "subject to approval by the Virgin Australia Holdings board and the Australian Government" and "may or may not include conversion to equity in certain circumstances".
The airline was unable to secure a requested $1.4 billion loan from the federal government, although Virgin was reportedly fielding offers from both NSW and Queensland state governments. However, NSW wanted the airline to move its headquarters to Sydney in exchange for the funds.
As some 16,000 employees are expected to be jobless, Shadow Transport Minister Catherine King called on the prime minister to follow through with the bailout, saying saying the JobKeeper payment would be more expensive than the loan.
"Scott Morrison must urgently extend a lifeline to Virgin Australia, through extending or guaranteeing lines of credit," King said.
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