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Branson calls for £500m loan to save Virgin Atlantic

Richard Branson

Cash plea: Sir Richard Branson

Sir Richard Branson has warned the government that his Virgin Atlantic airline will collapse unless it receives taxpayer support.

The tycoon is seeking a loan, believed to be up to £500 million, following a £600m loan granted to easyJet.

Without receiving support, he says thousands of jobs will be lost.

However, the airlines – particularly those run by billionaires – are meeting resistance from the public and government alike who feel they should raise funds independently. Scottish tycoon and former Dragons’ Den panelist Duncan Bannatyne last month criticised billionaires for demanding taxpayer support.

Sir Richard’s pleas come as Poland and Denmark take measures to exclude tax haven companies from coronavirus relief schemes.

The Danish government announced this weekend that companies which pay out dividends, buy back their own shares or are registered in offshore tax jurisdictions, will not be eligible for any of the state aid programmes.

Sir Richard, the UK’s seventh richest person with an estimated £4.7bn fortune, has offered to put his private Caribbean island up as collateral in his attempt to persuade the UK government to save the business.

He lives on Necker Island in the tax-free British Virgin Islands. He said his companies pay tax in the countries in which they are based.

It was reported on Friday night that the airline’s initial bid was rejected and that Sir Richard had been told to explore other ways to raise cash before seeking a state bailout.

In a new letter to Virgin Group employees, Sir Richard writes: “We will do everything we can to keep the airline 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 £600 million loan the Government recently gave them).

“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 more jobs will be lost, along with critical connectivity and huge economic value.”

Comment: Why we should say no to Branson’s call for support

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