Virgin Atlantic has appealed for £7.5 billion in government support to prop up the aviation industry during the coronavirus crisis.
Peter Norris, the chairman of Virgin Atlantic Airways’ majority shareholder, Virgin Group, will write to the prime minister on Monday to warn that the sector needs immediate financial aid to survive.
The bailout request will come ahead of what could prove to be the bloodiest week in British aviation history, with British Airways, Virgin Atlantic, easyJet and Ryanair all expected to announce mass groundings of aircraft and potentially huge redundancies as the COVID-19 crisis escalates.
Credit facility
Sources said that Mr Norris’s letter would ask the government to provide airlines with a credit facility to help them finance themselves through a potentially protracted period of negligible revenue.
The Virgin chairman estimates the support would be worth between £5 billion and £7.5 billion across the industry, and would include cash advances and guarantees, as well as other measures to ensure that credit card companies do not continue to hoard revenue from airline bookings.
One source close to the airline, which was founded by Sir Richard Branson in 1984, said that Mr Norris would also ask the PM to extend the timetable for allowing airlines to keep planes grounded without losing their prized take-off and landing slots for the entire summer season.
Tax scandal
Earlier this year Virgin Healthcare, part of the Virgin Group Holdings Ltd which is registered in the tax haven of the British Virgin Islands, was branded a ‘parasite’ on the NHS as it was revealed it paid no corporation tax while being handed £2 billion worth of NHS and local authority deals.
Dr Lister, secretary and health policy academic at the group Keep Our NHS Public, said: “Virgin continues to play a parasitic role in the NHS, fragmenting services and poaching NHS-trained staff and undermining nearby NHS trusts.
“This is made worse by the fact that the company pays no corporation tax and therefore only takes resources from the public sector while contributing nothing of value.
“The fact the firm is not making a profit suggests its continued involvement with the NHS is either based on ideological opposition to public services or a series of loss leader contracts hoping to force the prices up and cash in later.”
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