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British billionaire Richard Branson is betting on his Necker Island in the Caribbean to rescue his Virgin Atlantic and Virgin Australia airlines.
The two carriers are in danger of bankruptcy due to the collapse of the passengers and Branson is seeking financial help from the British and Australian governments to rescue them.
In an open letter to employees, Branson wrote that the survival of Virgin Atlantic and Virgin Australia was necessary to maintain effective competition with British Airways and Qantas. “If Virgin Atlantic disappears, Quantas will receive a complete monopoly over the Australian sky,” said Branson.
Branson invested $ 250 million in Virgin Group companies, but in his letter, he explained that he was ready to set up his Necker Island to raise as much money as possible to save as many jobs as possible.
Many airlines around the world have received government support. Without it, competition will be distorted and hundreds of thousands of jobs will be lost, along with critical connectivity and enormous economic value, he says.
Travel bans and national quarantines have put global aviation literally on hold, forcing airlines to land planes and put employees on vacation without pay.
While US airlines will receive tens of billions of dollars in support as part of a $ 22 billion incentive plan, the governments of Europe have not adopted rescue plans for their carriers. Instead, individual airlines receive state support for wages and credits.
Low-cost airline EasyJet has announced that it has received a £ 600 million loan through the UK government program to finance companies affected by the crisis. British Airways and Virgin Atlantic have asked the state to finance 80% of the wages of a total of 38,000 employees.
According to a publication in the Financial Times, the British government has returned Virgin Atlantic’s £ 500 million loan request because it did not like its proposal.
Branson has been criticized for seeking help in London and at the same time not paying taxes in the UK because he is a resident of Necker Island, part of the British Virgin Islands offshore that he bought at the age of 29.
In his letter, he addresses the issue, saying that with his wife, Joan, “we have not left the UK for tax reasons, but because of our love for the beautiful British Virgin Islands and especially for Necker Island.” Virgin companies pay taxes in the UK, he adds.
