As the COVID-19 pandemic rages on, Richard Branson, the owner of multination company Virgin, is feeling the squeeze. Two of his airline companies, Virgin Australia and Virgin Atlantic, will need government assistance to survive the pandemic, and Branson himself is getting involved.
The charismatic and prolific founder of Virgin is often in headlines for his antics. However, the novel coronavirus has catapulted nearly all airlines towards bankruptcy. Travel between many countries is banned altogether. Even where travel isn’t banned, people are far from excited about traveling while a pandemic rages. No amount of finance advice in the world can help a business with no money coming in.
In an open letter to his employees, Branson clarified his reason for fighting so hard to keep the companies afloat. Of course, he wants to continue to operate successful businesses and employ the people who work for him. Lawmakers, however, should care because Branson’s company helps keep airlines in Australia competitive.
“If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies,” Branson tells employees in the open letter. Branson is putting his considerable wealth where his mouth is, injecting $250 million into his companies. He’s also put his Caribbean island up as collateral to help keep things running.
Branson owns a private island in the Caribbean, Necker Island. Branson told reporters that he wanted “to raise as much money against the island as possible to save as many jobs as possible around the group.” The sprawling estate Branson has on the island was featured in an episode of Cribs on MTV in the mid-2000s.
Meanwhile, Virgin Atlantic is seeking a loan from the British government. Branson has confirmed that the company will pay the loan back. We don’t know how much money they would receive.
Airlines Are One of Many Victims
Industries the world over at scrambling to address the sudden loss of income from the pandemic. COVID essentially upended every aspect of modern life. The required social distancing and lockdown measures have put massive holes in most of the global economy.
While the measures have likely helped humanity avoid millions of deaths, they have not come without cost. Experts believe that the aggressive lockdowns, while necessary, will lead to a global depression. Airlines are simply the first industry to feel that squeeze in a major way. In time, the ripple effects of these measures will likely reach each and every person on the planet.
