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LONDON: Billionaire businessman Sir Richard Branson has pledged his luxury island resort as collateral to help secure a UK government bailout for his Virgin Atlantic airline.
The Virgin Group boss said in an open letter to staff he was not asking for a handout, but a commercial loan, believed to be £500m. He said the airline’s survival was in doubt, and his Necker Island home in the Caribbean could be mortgaged.
This comes as Virgin Group’s airline in Australia enters voluntary administration, making it the country’s first big corporate casualty of the coronavirus pandemic. The carrier cut almost all flights last month following widespread travel bans.
Both airlines have been hit hard by the global coronavirus lockdown, and Branson has appealed to governments in both countries for help. He is the 312th richest person in the world with an estimated $5.2bn fortune.
Branson said in his letter to staff: “Many airlines around the world need government support and many have already received it.” The crisis facing airlines, and the staff they employ, was “unprecedented,” he said.
He said Necker would be offered as security for any loans. “As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the group,” Sir Richard said.
In his letter to staff, Branson said: “We will do everything we can to keep the airline [Virgin Atlantic] going – but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.
“This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back (as EasyJet will do for the £600m loan the government recently gave them).”
An open letter to Virgin employees https://t.co/Nv1RLBhp3j pic.twitter.com/Qj16CUT5N0
— Richard Branson (@richardbranson) April 20, 2020