State Aid please...

This is concerning, and I’m not downplaying the situation, but this could be putting negotiations into the public domain to try and create leverage.

This is concerning, and I’m not downplaying the situation, but this could be putting negotiations into the public domain to try and create leverage.

SRB is rather toxic to many, putting things in the public domain may not be the right move. Is it not more likely this is we've exhausted other methods, it's gov or admin.

This is concerning, and I’m not downplaying the situation, but this could be putting negotiations into the public domain to try and create leverage.

SRB is rather toxic to many, putting things in the public domain may not be the right move. Is it not more likely this is we've exhausted other methods, it's gov or admin.

You may be right - I don’t think this is inconsistent with that as it implies SRB is to take a haircut or be out of the business altogether (presumably also taking a haircut) which may remove any toxicity of his brand...

An update from the BBC

https://www.bbc.co.uk/news/business-52431290

“Sources told the BBC they had not set an end date of May”

David

I think the next 2 weeks will be make a break for Virgin, the summer as we all know is the most profitable time of year for UK airlines that money is then used to help get through the quieter winter period.I feel for all the Virgin staff during this time. I'm extremely disappointed in Delta what's the point of a JV partner if you're going to reap the rewards during the good times and hang Virgin out to dry during the bad times.

Over the past 2 years the current management have tried to up revenues and load factors through the new economy light classic delight fares. Virgin have also upped aircraft ownership to 14, 9 B787's 3 A350's and 2 747's with 2019's accounts are due anytime. For me in Manchester we have the most to lose because of collapse of FlyBe, Thomas Cook and Monarch. I use the ATL flight the most to get to our second home in Tampa. I was also planning a trip to California this summer for my birthday via the new ish LAX flight.

The situation at Virgin is salvageable it might mean shrinking the fleet in the short term getting rid of leased aircraft like the 747's. Moving to an all Airbus fleet would also be an option if the management wanted to reduce costs.

Dear All .....I hope that everyone who slags off Virgin and Branson will remember the reason that when you fly with your family to such places as Florida on BA , dont start moaning about paying thousands of pounds a time for an economy seat , because thats what will happen if it goes under BA will have the monopoly .......Thank Willie Walsh for that .

dont start moaning about paying thousands of pounds a time for an economy seat , because thats what will happen if it goes under

No it won’t, because no-one will be willing to pay that.

Sure, BA would no doubt try to hike fares but they can only charge what the market will bear.

And in due course, once demand picks up again, there’d be competition again - even if no-one knows who from yet.

Article in Forbes examines Virgin Atlantic's tax position with more focus - basically saying yes they do pay tax to UK, but yes they also receive rebates from UK and avoid tax by siphoning profits to British Virgin Islands as a branding fee under marketing expenses, and asking if their tax situation is a red herring anyway. It goes on to say that if they do go under it will provide an opportunity for other airlines to get a foothold in LHR and offer competition to BA (eg JetBlue).

https://www.forbes.com/sites/willhorton ... the-point/

I think I would prefer VS to get state aid than to allow competition from US carriers which have received significant state aid. Better for uk employment too.
If the government wants to teach Branson a lesson (and surely no one in the conservative party employs similar investment and avoidance tactics) then wait till its in administration and nationalise it!

dont start moaning about paying thousands of pounds a time for an economy seat , because thats what will happen if it goes under

No it won’t, because no-one will be willing to pay that.

Sure, BA would no doubt try to hike fares but they can only charge what the market will bear.

And in due course, once demand picks up again, there’d be competition again - even if no-one knows who from yet.

I expect prices in the aftermath of a VS collapse would be reflective of the demand for travel. If it is weak, I expect fares to be low across the board. I do expect fares on some routes to hike when demand picks up and there will be certain routes VS operate alongside BA where BA will have a monopoly.

I also agree competition will eventually emerge, but I can't see it happening straight away and the barriers to entry for a new entrant are huge, so until then...

Article in Forbes examines Virgin Atlantic's tax position with more focus - basically saying yes they do pay tax to UK, but yes they also receive rebates from UK and avoid tax by siphoning profits to British Virgin Islands as a branding fee under marketing expenses, and asking if their tax situation is a red herring anyway. It goes on to say that if they do go under it will provide an opportunity for other airlines to get a foothold in LHR and offer competition to BA (eg JetBlue).

https://www.forbes.com/sites/willhorton ... the-point/

JetBlue have made noises about entering the UK market for a while now, however they currently do not have aircraft in the fleet to fly London-New York. The A321LR/XLR's that are on order will be able to comfortably do that flight, but they're still a few years away from being delivered and JetBlue may yet choose to defer deliveries depending on demand.

Also, if I was JetBlue I would consider entering the London market using another London airport initially to get a foothold in the market. LHR slots are lucrative and not cheap.

The article also mentions Norwegian. Frankly, I would be surprised if Norwegian's long-haul network let alone Norwegian themselves are around for much longer - and I don't take much pleasure in saying that. There's a crunch bond meeting coming up within the next week where a vote to convert debt to equity in order to access tranches of cash from the Norwegian government takes place. The outcome of that will no doubt shape the future of Norwegian.

I agree in that I would prefer UK competition. Aside from an employment/UK economy point of view, as someone based in the UK I think should the worse come to the worse and VS disappeared a UK competitor would have agreater impact in terms of routes competing with BA and in terms of price.

In terms of when this could happen I expect the UK will be in recession for a period after the lockdown conditions start easing - it would be a brave/made entrant to set up shop during a recession IMO. JetBlue in my view wouldn't choose LHR. As a low-cost airline making their first moves across the atlantic LGW offers the benefit of the lower cost and being established enough with good connectivity into Central London (vs. Luton/Stansted).

The thing I don't understand is if VS go through administration and is bought by a trade buyer is that a shoe in for significant changes to operations/routes/service? No doubt the answer will depend very much on buyer and strategy but hard to see anything other than streamlining given current/forseeable demand.

I am taken aback by the hostility towards Branson...

I am taken aback by the hostility towards Branson...

Flavour of the month twitter outrage, sadly.

I am taken aback by the hostility towards Branson...

Remember, if the internet or media tell the sheep to be outraged at something... then they will be.

I am taken aback by the hostility towards Branson...

Remember, if the internet or media tell the sheep to be outraged at something... then they will be.

That's true also...!

A glimmer of hope from the Government today, although they don’t mention VS surely they must be part of discussions for bespoke assistance;

https://www.bbc.co.uk/news/live/world-5 ... type=share

A glimmer of hope from the Government today, although they don’t mention VS surely they must be part of discussions for bespoke assistance;

https://www.bbc.co.uk/news/live/world-5 ... type=share

Another article...

https://uk.reuters.com/article/uk-healt ... KKBN22D5ST

Funny how their attitude has changed from a few weeks ago when VS were calling for the government to offer billions in lines of credit to the whole industry and it was dismissed. Maybe the penny is finally dropping that this crisis is going to linger for some time yet and no action will mean the industry will be destroyed.

IAG can’t have done itself any favours within government by happily accepting Spanish state aid for Iberia and Vueling while lobbying against it for BA to enable it to lay off 12,000 staff and force the rest on to worse contracts, while hopefully seeing off the competition.

BA’s cunning plan has been exposed for all to see - but how will it go down in Whitehall?

Plus - with the ME3, US big 3, AF/KLM, Norwegian and Lufthansa all either accepting or being offered state aid, the UK would be an outlier if the government were to let VS fail.

IAG can’t gave done itself any favours within government by happily accepting Spanish state aid for Iberia and Vueling while lobbying against it for BA to enable it to lay off 12,000 staff and force the rest on to worse contracts, while hopefully seeing off the competition.

BA’s cunning plan has been exposed for all to see - but how will it go down in Whitehall?

Plus - with the ME3, US big 3, AF/KLM, Norwegian and Lufthansa all either accepting or being offered state aid, the UK would be an outlier if the government were to let VS fail.

Good job our government aren't incompetent idiots..... oh wait......

A point I wonder even with all this state aid is that it won't necessarily mean airlines are out of hot water. Realistically now, financial wobbles are from Covid-19 - little to no flights operating with high cost bases (airports, plans, staff .etc). State aid might help them through this but they will also face the other side of these travel restrictions which looks bleak. Business and leisure travel will take a long time to recover. Even if flights are allowed to fly again demand will not bounce back as quick - a factor of both ongoing concerns about the virus and economic follow-on effects. Business travel IMO won't ever be the same with many companies operating 100% work from home at the moment realising they can make do with Zoom/Teams meetings.

The impact even after flights are back up and running will mean that even with state aid things will remain tough for the industry for some time.

BA’s cunning plan has been exposed for all to see - but how will it go down in Whitehall?

It's certainly making me think about who I book with in the future because of the way they have handled the whole covid issue and especially these proposed redundancies.

I'f I'm doing an ex-EU anyway then I might as well see what for example Finnair or KLM have to offer

BA’s cunning plan has been exposed for all to see - but how will it go down in Whitehall?

It's certainly making me think about who I book with in the future because of the way they have handled the whole covid issue and especially these proposed redundancies.

I've already seen a few people pledging to never fly BA again if what's being reported about the staff is true, though I can't see it making a material difference in the long-run.

A lot of people said they’d never fly BA again after the IT meltdown, after the data breach, after it introduced Buy On Board, after it cut legroom in Club Europe etc etc etc.

Yet passenger numbers kept on rising and BA knows full well the lure of that nice shiny gold card is hard to resist, hence its enduring complacency and - compared to some of its rivals - poor treatment of its frequent flyers.

I'f I'm doing an ex-EU anyway then I might as well see what for example Finnair or KLM have to offer

Don't forget for now, booking TATL with Finnair is just money into BA/AA/IB/AY Joint Venture's pocket.

There was an interesting article, that IF, god forbid, VS exited, then the Competition Commission may look to break up that JV.

I certainly will stick by my guns and whilst AC and WW is still at the top I won't be travelling long haul with BA. Short Haul would only be out of sheer necessity but even then it would be ultimate last resort!

Not looking good

https://news.sky.com/story/coronavirus- ... l-11983452

David