All Virgin Atlantic (& Trains) profits to Charity?

Am I reading this right?

http://news.bbc.co.uk/1/hi/business/5368194.stm

Looks like SRB has reached that stage where making money isn't quite as much fun as giving it away?!

Scott

[fozzyo]

"The Virgin boss said he would commit all profits from his travel firms, such as airline Virgin Atlantic and Virgin Trains, over the next 10 years."

Thats what it says.

Its a very good guesture and should be applauded [^][^]

Is this though just his profit from the business or all the profits from the business?

Still just shows how rich he/the companies must be to afford to do this.

Dean

does this mean no improvements to the airline though as all the money will be giving away to charity?

Originally posted by G-VROY
does this mean no improvements to the airline though as all the money will be giving away to charity?

Profits should be calculated as the excess of income over cost and that cost should include investment and improvement to the product. So it shouldn't make a difference to the behaviour of the airline as a business as the aim of that business will be to maximise profits wherever that profit ends up.

Paul

Good to see that he cares [y]

Just don't expect any profits coming from Virgin Trains (long story).

Originally posted by VS075
Good to see that he cares [y]

Just don't expect any profits coming from Virgin Trains (long story).

Would be interested to hear the "long story"....

Regards

John

Intresting...

The funds will be invested in schemes to develop new renewable energy technologies, through an investment unit called Virgin Fuels

So in reality its not really charity, just another Virgin company that happens to be aiming green. Slightly different to examples further down in the article.

Still not too sure about this[:?]

VS.

Here's the take from the other side of the pond: http://www.usatoday.com/money/2006-09-2 ... htm?csp=24

I found it interesting that the US version states nothing about it being the profits.

I have already heard one quip, tho - 'So that's where the money saved by the Scrooge packs is going, hm?'

Hey, I'm all for stopping global warming, but I've had to resort to eBay to get all the OB kits all my friends/relatives are begging for as gifts - since they're too cheap to fly and my brother only flies BA [V]

If they'd bring back YVR maybe he'd reconsider...

Nevertheless, I think it's a great decision by SRB. You could see by the reactions of the people standing behind him when he said 3 billion dollars (not a definite, I know) that it has to be a valuable pledge.

Originally posted by VS-EWR
Nevertheless, I think it's a great decision by SRB.

I'll second that, much respect SRB. [y]

Respect to SRB for the intent, but there are a couple of details in there that don't necessarily make it quite as good as it could be.

1. I think I heard the phrase all profits from the transport companies that are paid back to the Virgin group. I'm no accountant, but that paying back is a voluntary action by the airline or rail company to pay a dividend to their owner. In other words, if the airline chooses to pay no dividend to the owner, then no money for the green fund.

2. Virgin group owns only 51% of Virgin Atlantic. That means only 51% of VS's dividend goes to the green fund.

3. Current annual profit figures for both the trains and planes are in the 10s of millions (can't remember the figures). SRB says this will be 3 billion. You do the math. Also, what currency - he seemed to stumble on that one in the press conference I saw.

As I say, it's great to see the corporate philanthropy thing spreading, but I don't think the headlines quite stack up.

csparker :- got to agree with you here. It's not for nothing that SRB is the master publicity.

Originally posted by csparker
2. Virgin group owns only 51% of Virgin Atlantic. That means only 51% of VS's dividend goes to the green fund.

Very good point.

On the other side, this could be the start of a lot of investment in the product. [:w]

***Please don't get me wrong, any investment in fighting Global Warming is fantastic**** - this just comes from a man that has so many offshore trusts, and companys within companys within companys ... that nobody knows what is owned by who [?]

However any money to fight this problem will be greeted with open arms.

David[:?]

(not wanting to start a war at this time of the morning [B)])

Quote from today's Independent about where the money will come from as Virgin's air and train companies only contributed £90m last year

"That means they will either have to start making a lot more money or Sir Richard will have to look elsewhere for contributions"

The article goes on to say that Virgin will be looking at raising $1bn externally next year.

Given how bad air travel is in green terms, I must admit I am in the "I'll believe it when I see it camp". It smacks a little of Shell's 'investments' in Greenergy, whilst at the same time encouraging increasing use of petrol.

Originally posted by JAT74L
Would be interested to hear the "long story"....

Regards

John

Well as you may or may not know, the SRA (now DfT) have had to bale out VT over the last few years, especially after 'Operation Princess' went wrong big style. The franchises operate on a 'cost-plus' basis. I don't know the ins and outs of this but basically it controls what they spend. Also the Cross-Country franchise is being re-let which VT is on the shortlist for, but no guarantee that they're gonna win.

That's why no extra coaches for the Voyagers/Super Voyagers have been ordered and that no extra Pendolinos have been ordered, even though they are badly needed ASAP. Although there is talk of lengthening the Pendolinos to 10-cars, any decision not taken soon will mean that this will never happen.

Going back to the DfT, they pay Virgin huge subsidies annually. When the new Cross-Country franchise is let these subsidies are expected to go down and by the end of the term, the franchisee will be paying premiums to the DfT.

What I'm trying to say is that any profits made by Virgin Trains will be split; some going to Branson's project, the rest to the DfT. Bear in mind that this will differ each year as subsidy levels go down and premium levels go up.

Hope this helps[y]

I'm with you, Jeremy:D

VS.

There is a very simple way to cut greenhouse emmisions by 50% at a stroke:
Fly to your Holiday destination....



and stay there! [:o)]

Nice idea, PVGSLF:D

You can offset your carbon emmissions by visiting some websites - I'll try and find one now...

VS.

Here is one such site.

VS.

Sir Richard is bored of earing money this days .. Good Idea tho ... 100% Support from me