Richard Branson Offers Private Island as Collateral to Aid Struggling Airlines

British airline Virgin Atlantic and Australian airline Virgin Australia are in need of government aid in order to survive the lack of air travel amid the COVID-19 pandemic. On Monday, founder Richard Branson has issued a statement on the status of the airlines “in the face of the severe uncertainty surrounding travel today.”

In the open letter to employees, Branson stated that the survival of Virgin Atlantic and Virgin Australia was crucial, as the airlines provide competition to British Airways and Qantas.

“If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies,” he said.

According to CNN, British Airways and Virgin Atlantic have collectively furloughed around 38,000 employees and are relying on government aid to pay 80 percent of these employees’ wages.

Airlines in the United States have recently been granted large shares of the country’s $2 trillion stimulus package to get through the outbreak. However, European governments have not assured wholesale bailouts to their carriers, which means individual airlines have had to seek government support in order to pay employees.

“The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands of jobs will be lost, along with critical connectivity and huge economic value,” said Branson.

Virgin Atlantic is seeking a commercial loan from the UK government. Branson assures that the airline will repay its loan, though he did not specify how much money the airline needs.

Additionally, after spending $250 million to keep Virgin Group companies afloat during the pandemic, Branson has offered his Necker Island estate as collateral “to raise as much money against the island as possible to save as many jobs as possible around the group.”

The billionaire has since been criticized for seeking government funding when he does not pay UK income tax, as his primary residence is on Necker Island in the Caribbean.

Branson has responded to criticism, claiming that Virgin companies pays tax in the United Kingdom and that he and his wife Joan “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island.”

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