With cash-starved Virgin Atlantic fighting for survival, Airbus, Rolls Royce, and Heathrow Airport have urged the British government to support the beleaguered carrier.
Per Sky News, Airbus, Rolls-Royce Holdings and Heathrow Airport each delivered letters of support to Grant Shapps, the UK Transport Secretary, urging the government to “do all it can to support Virgin in these extremely difficult times”.
Airbus warned Virgin Atlantic’s “collapse could have an extremely negative impact on the A330 programme.” The letter noted Virgin’s pending order:
“As you will be aware, all wings for these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business.”
Last summer, Virgin ordered 20 Airbus A330-900neos, including a firm order for 14. Deliveries were scheduled to have began in 2021.
Sky News reported the letters were written per the urgent request of Virgin Atlantic.
With demand down 90%, Virgin Atlantic has slashed flights and asked staff to take eight weeks of unpaid leave. Although majority owner Richard Branson has infused $100MN of his own cash into the airline, that is not enough says the airline. Virgin is seeking a far larger loan from the UK government.
Thus far, however, the government has appeared reluctant to grant it, noting that shareholder options have not been exhausted. Branson owns 51% while Delta owns 49%. It appears the UK government wants Virgin to hit up Branson and Delta first. Rishi Sunak, the Chancellor of the Exchequer, said a bailout would come only as a “last resort”.
All three letters stressed that Virgin Atlantic provided vital competition in the UK, a poke at British Airways, which has vocally opposed any bailout. By starving Virgin, British Airways hopes to be the last airline standing.
It is hardly surprising that three of Virgin Atlantic’s top vendors would support their customer. But the letters paint a starker picture than originally imagined for Virgin: that collapse is not just a worst-case scenario but a very reasonable possibility.
For the sake of UK customers and all those who travel through or to London and Manchester, I hope that however it happens, Virgin Atlantic finds a way to survive.
Should Virgin Atlantic receive government aid?