Branson, who has already pumped $250 million into Virgin Group companies in response to the pandemic, said he would offer his Necker Island estate in the Caribbean as collateral “to raise as much money against the island as possible to save as many jobs as possible around the group.”
Virgin Atlantic will seek a commercial loan from the UK government, which it will repay, Branson added, without giving details of how much money it needs.
“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value,” he said.
While US airlines will receive tens of billions of dollars in support as part of the country’s $2 trillion stimulus package, governments in Europe have not promised wholesale bailouts to their carriers. Instead, individual airlines are tapping government support to pay staff salaries and raise debt.
British Airways and Virgin Atlantic have furloughed some 38,000 staff between them and are relying on the government to pay 80% of these employees’ wages.
Virgin Group operates in many of the sectors that have been hardest hit by the coronavirus pandemic, including aviation, leisure, hotels and cruises. “The challenge right now is that there is no money coming in and lots going out,” Branson said. The company employs 70,000 people in 35 countries.
Branson has been criticized for seeking help from the government when he does not pay UK income tax because his primary residence is on Necker Island, which he bought when he was 29.
He addressed the criticism in his letter, saying that he and his wife Joan “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island.” Virgin companies paid tax in the United Kingdom, he said.
— Eoin McSweeney contributed reporting.