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Rolls-Royce and Airbus support £500m Virgin Atlantic coronavirus bail-out (FT)

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Rolls-Royce and Airbus are pressuring the UK Government to back a bailout of Virgin Atlantic, according to a report in the Financial Times this afternoon.

The transport secretary, Grant Shapps, has been told by both companies that Virgin Atlantic plays a key role both in their operations and in supporting their supply chain throughout the UK.

Virgin Atlantic recently ordered 14 A330-900neo aircraft, pictured below, with a list price of $4.1 billion. 

Rolls-Royce and Airbus support £500m Virgin Atlantic bail-out

The wings for these aircraft are designed and manufactured by Airbus in the UK.  Rolls-Royce Trent 7000 engines will power the planes, and the value of the engines is likely to be around 1/3rd of the total order cost.

Heathrow Airport is also reported to have submitted a letter supporting the arline.

The newspaper reports that the airline has now officially requested a package of commercial loans and guarantees worth £500 million.  The loans are to support day-to-day costs whilst the airline remains grounded.  The guarantees are required to persuade Visa, Mastercard and American Express to release the money they are retaining to cover potential Section 75 claims if the airline folds.

Talks between the airline and the Government will start this week.   The FT quotes a Government source as saying that both Virgin Atlantic and easyJet may be refused support, due to Sir Richard Branson’s historic sheltering of Virgin Group profits from UK tax due to his Necker Island domicile and easyJet’s recent payment of a £170m dividend.  Loganair and Eastern are expected to receive Government funding unchallenged.

Whilst not highlighted by the FT, I should add that there are also questions being asked over the appointment of advisory firm EY who will effectively tell the Government what they should do.  EY has audited British Airways and latterly IAG for over 30 years.

The FT article is behind a paywall but you can read it by clicking through to Google here and selecting the top result.

How to earn Virgin Points from UK credit cards

How to earn Virgin Points from UK credit cards (December 2023)

As a reminder, there are various ways of earning Virgin Points from UK credit cards.  Many cards also have generous sign-up bonuses.

You can choose from two official Virgin Atlantic credit cards (apply here, the Reward+ card has a bonus of 15,000 Virgin Points):

Virgin Atlantic Reward+ Mastercard

15,000 bonus points and 1.5 points for every £1 you spend Read our full review

Virgin Atlantic Reward Mastercard

A generous earning rate for a free card at 0.75 points per £1 Read our full review

You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.

American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points.

SPECIAL OFFER: Until 9th January 2024, you will receive 30,000 Membership Rewards points (convertible to 30,000 Avios) with American Express Preferred Rewards Gold. You receive 25,000 points if you spend £3,000 in three months and a further 5,000 points if you hold the card for 15 months. You can apply here.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points (TO 9th JANUARY), FREE for a year & four airport ….. Read our full review

The Platinum Card from American Express comes with 30,000 Membership Rewards points, which convert into 30,000 Virgin Points.

SPECIAL OFFER: Until 9th January 2024, you will receive a huge 100,000 Membership Rewards points (convertible to 100,000 Avios) with The Platinum Card. You receive 75,000 points if you spend £10,000 in six months and a further 25,000 points if you hold the card for 15 months. You can apply here.

The Platinum Card from American Express

Crazy 100,000 points (TO 9th JANUARY) and a huge range of valuable benefits – for a fee Read our full review

Small business owners should consider the two American Express Business cards. Points convert at 1:1 into Virgin Points.

American Express Business Platinum

40,000 points bonus and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Virgin Points

(Want to earn more Virgin Points?  Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)

Comments (117)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • EwanG says:

    @Rob, Rhys – I see from the homepage they are now promoting taking PayPal as a payment method. Is it worthwhile highlighting this in a bit of an article? You’d give up the Section 75 protection from paying on a credit card or chargeback ability on a debit card and rely on the PayPal Buyer Protection instead. I would prefer to rely on the statutory rights from paying directly as it looks to me that Buyer Protection is weaker and in the event of a large scale failure PayPal would want to get out from paying.

  • BrianN says:

    Hi, someone mentioned further up in the replies that Virgin only transfer points to Hilton once a month. Do we know if that information is accurate?

    If it is, that must mean then that if a transfer takes up to 30 days, the actual transfer must be instant but they only do it once a month?

    • Stephen says:

      The next transfer to Hilton is tomorrow. They happen once a month.

      They send across a spreadsheet with the requests on. No idea whether they make payment at the same time or how long Hilton takes to process from their side.

      • BrianN says:

        How do you know that though? is it just common knowledge that it’s once per month?

        Logically though if you think about it – if it only happens once per month – and the transfer takes a ‘up to’ (so a maximum of) 30 days (a month) – then the transfer must be instant.

        • Stephen says:

          Just from speaking to Virgin Flying Club CS – they said if the additional security has not been passed, the miles won’t be transferred.

          I responded to the email request for information 2 days ago, but when I went to make a new booking today, I asked if they had received it, and they said it was not updated on the spreadsheet as of yet (so they took the details again)

  • Andrew says:

    I’m quite OK for Rolls-Royce and Airbus to support Virgin Atlantic… with £250m of their own cash each.

    • BrianN says:

      What’s the issue with the government giving them an interest bearing loan? It will save jobs and the taxpayer will make a profit on it when repaid.

  • BrianN says:

    OT – the Virgin 241 voucher. What are the rules regarding when you can use the voucher e.g. do both legs have to be flown before the expiry date or just the outbound leg?

    I believe it is just the outbound leg. Can anyone confirm? Is there a link to this in the T&C? I tried to find it but no luck.


  • Opuada says:

    How sure are we that Virgin won’t receive a rescue package?

    • Rob says:

      Cash burn rate should be fairly low (in airline terms). BA is meant to be down to losing £100m per week so let’s assume Virgin is £20m per week. That’s manageable. A bigger issue is the cash they’ve had to pay back for cancelled bookings.

      A bigger risk is how the US market re-opens. Irrespective of what the rest of the world does, if the US insisted on 14 days quarantine for new arrivals for, say, 2 years then Virgin Atlantic simply has no business any longer. BA would also end up on the edge but it isn’t as reliant on North America.

  • Andi Hawes says:

    OT: and apologies if I already posted as i thought i did but didnt see it appear:

    Is there logic in booking a Miles VA trip to Orlando for Easter 2021 in the current climate? Ive been planning on booking 4x UC for Orlando/Miami for a while and wondered if it sensible in this period of uncertainty for the airline?

    In the event that the airline went under, would i be able to get my taxes back? I assume the Miles, used and not consumed, or unused, would be lost iun this event.

    • Rob says:

      Taxes would be covered, almost certainly. Your miles are at risk either way!

      • Andi Hawes says:

        Thanks Rob

        How do i book a return 2 weeks later if only the outbound opens up for 26th March 2021..? Do i wait a day, then book a rtn home day after, then amend when available?

        • Rob says:

          Not sure with Virgin. Most people don’t rush to book because Virgin doesn’t guarantee to open seats for miles when booking opens.

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