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

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• Nick says:

  1 Apr1 April 18:56

  Would this bailout request from Airbus be from the exact same company that threatened the UK government back in 2018 over Brexit? At that time, Tom Williams, the chief operating officer of Airbus Commercial Aircraft, was asked if the company was planning to abandon its plans to build new wings in the UK, and he replied: “We are seriously considering whether we should continue that development or we should find alternate solutions.”?

  • jack says:

    1 Apr1 April 19:06

    The UK has bigger things to worry about than Brexit right now. Although if a hard brexit actually still happens, that and the Coronavirus will I am quite sure trash the UK economy and living standards for at least a generation.

• AJA says:

  1 Apr1 April 18:57

  Both Airbus and Rolls Royce see a major customer disappearing. I am not sure whether Virgin disappearing is that good for the consumer but if the government does give loans then I think Richard Branson must pay the same amount in to support his airline, in addition to anything he has already paid) and I also think he should become UK domiciled for tax purposes.

  • Mikeact says:

    1 Apr1 April 19:29

    And the other partner….Delta.

• Anna says:

  1 Apr1 April 18:58

  I seem to recall that VS recently slashed tourist routes to developing Caribbean nations because their governments couldn’t afford to pay VS a sweetener for bringing tourist revenue to the islands. And now they’re asking to be treated well!

  • TGLoyalty says:

    1 Apr1 April 19:08

    So commercial airline cancels unprofitable route ? I don’t see the controversy.

    They are here to make profit (or atleast break even) so they can survive if they feel they get a higher yield from other routes what’s the issue?

    • KINGB says:

      1 Apr1 April 19:29

      Why are they operating routes by sucking up to governments to pay for services if they cant do it themselves? Isn’t that how business works? LOL

      • TGLoyalty says:

        1 Apr1 April 21:17

        Yes it is. The government is trying to create tourist demand.

    • Anna says:

      1 Apr1 April 22:25

      If those flights were so unprofitable, why did BA pick them up so quickly?

      • Rob says:

        1 Apr1 April 22:27

        BA was presumably also given a bung, sorry ‘marketing support’. I guessed as much when I saw a massive ‘visit St Lucia’ British Airways ad as I was driving down the M4 from Heathrow …..

  • ChrisC says:

    1 Apr1 April 19:55

    BA are and have been in receipt of payments from several airports in the US to start operating flights to those airports.

    Sauce for the goose and all that!

    • ChrisC says:

      1 Apr1 April 20:16

      And ryan air do the same and as soon as the subsity ends they invariably end the route as well

• Kazim says:

  1 Apr1 April 19:05

  What’s to stop virgin cancelling their orders with Airbus, once they get the cash they desire and then placing an order for Boeing aircraft all equipped with GE engines?!

  • jack says:

    1 Apr1 April 19:09

    Isn’t it a confirmed order and a signed contract? Would cost a lot to get out of it.

    • ChrisC says:

      1 Apr1 April 21:08

      re A330 Neo 20 in total – 8 direct orders, 6 via US lessor and 6 options

      https://www.flightglobal.com/fleets/paris-virgin-atlantic-signs-for-up-to-20-a330-900s/133139.article

      re A350 – order of 12 of which 4 in service

    • Genghis says:

      1 Apr1 April 21:17

      I know nothing of the legals (potentially a contract under French law?) here but potential force majeure?
      https://www.osborneclarke.com/insights/will-coronavirus-force-majeure-event-depends-governing-law/

  • TGLoyalty says:

    1 Apr1 April 19:09

    Probably contractual agreements leading to heavy get out payments.

• Richard Relief says:

  1 Apr1 April 19:14

  Time to move your Virgin miles to somewhere safer? There are a couple of hotel schemes that will give you a bit of a haircut but 50% of something is better than 100% of nothing?

  • marcw says:

    1 Apr1 April 19:46

    Be quick. Virgin FC move miles to hotels once a month. Next one, and likely to be the last one, is this friday.

    • Mac D says:

      1 Apr1 April 20:39

      They are taking 24hrs to reply to the text/whatsapp lines now so good luck to anyone trying for this week

    • BrianN says:

      2 Apr2 April 12:01

      How do you know it’s just once a month?

      Also, a transfer takes up to 30 days. So are you saying the transfer is actually instant but they only do it once a month?

  • berneslai says:

    1 Apr1 April 19:56

    30 days transfer time on points. Points have left my Virgin account but not been added to my Hilton account – this could be a nervy wait.

    Oh, and they should not get a bailout under any circumstances.

    • David says:

      1 Apr1 April 20:57

      Yes they should.

      • KINGB says:

        1 Apr1 April 21:45

        No they should not get a bail out. Get Branson and Delta to bail them out. T The UK can survive without Virgin

        • Spaghetti Town says:

          2 Apr2 April 00:11

          I disagree. I quite enjoy getting my £240 round trip fares to New York city.

          More strangely, how are Norwegian still soldiering on?

        • Callum says:

          2 Apr2 April 04:29

          Norwegian got a bailout.

          Richard Branson uses a tax haven because the British government explicitly allow it. If they don’t like it (and they shouldn’t), then they shouldn’t let it happen in the first place.

          Not to mention it isn’t a bailout of Richard Branson, it’s Virgin Atlantic. I.e. the tens of thousands of full tax paying British workers who face losing their jobs at the absolutely worst time possible. Branson will remain spectacularly wealthy regardless of whether it survives or not. He’s not the one who will truly suffer…

• Mac D says:

  1 Apr1 April 20:38

  No way should they get a bailout even though I would be sad for my miles.

  The government has provided no support for small LTD directors who take a small PAYE salary and pay the rest of their salaries by dividends as I am sure many of you know, so no way in hell should a large company be getting support beyond the furlough of workers!

  • Jonathan says:

    1 Apr1 April 21:02

    On the otherhand we pay less tax so it stands to reason we’ll get less support. Whilst I don’t like the policy we game the system to pay no NI yet get our full stamps, and only 7.5% tax compared to 20% so you can’t really complain.

    • James H says:

      1 Apr1 April 21:23

      +100
      Quite agree, and refreshing to see someone else in this game acknowledge how much we do benefit against those on PAYE.

    • sayling says:

      1 Apr1 April 21:33

      7.5% for certain classes/ industries, isn’t it?

      Plus dividends are taxed now, then there’s Corp Tax, and IR35 imminent for many.

      The differences are becoming smaller

      • Micky says:

        1 Apr1 April 21:52

        Yes very few benefits and the amounts unlikely end up at a 7.5% saving these days

    • Micky says:

      1 Apr1 April 21:51

      The amount of any of tax saved does not really amount to that much and it is within the rules of the system. The government has decided to deliberately leave these small businesses out leaving small businesses out to dry.

      Not sure what setup you have but many directors pay NI as well

      • TGLoyalty says:

        1 Apr1 April 22:19

        But tax savings were enough for you to go to the trouble of doing it.

        You wouldn’t have done it if it wasn’t worth the extra £££

        • Micky says:

          1 Apr1 April 22:28

          People do it because that is what is advised by accountants across the country, it’s also the most efficient but the benefits now are limited but there isn’t any benefit to not doing it until now.

        • Lady London says:

          2 Apr2 April 03:13

          In the case of a lot of types of work such as mine, for many years now the only way work if offered is if you are a Ltd. So unless the rate of pay is very high we have disproportionate costs and risks for what we earn as compared to an equivalent employee.

          I would love my employers to be forced to provide me a pension plan and contribute to it, provide me employment protection, protect me from race, religion, gender and age bias, and pay all my insurance premiums including P.I., pay my accountant and auditors, etc. Also not to be out of a job when a project is cancelled from on high. Or wait….if some virus is going around, or other event. The employee will still be there, regardless of his performance he may last a very long time. Generally we are like providers of other services – the money they pay us isn’t for us to come it’s because we will go in due course and have to find our next work.

          We take many risks including financial risks, which are not remunerated and it is up to us to make the best of things. Because by employing us the employer has saved huge amounts in Employers’ NI, and quite possibly 50-60% of the cost of an employee overall, depending how they do their sums. Plus they retain almost complete flexibility. We get certain benefits but we have to arrange them ourselves and they are not huge.

          IR35 isn’t going to help either contractors, who now find fewer opportunities, or employers, who will end up losing flexibility and paying more for less.

          So the rate has to be really excellent otherwise things work out even enough overall. How many contractors got “furloughed”? Thought so. How many employees?

        • Jonathan says:

          2 Apr2 April 07:17

          I don’t employee contractors as not a fan of their high daily rates and I don’t agree with zero hour contracts either. But since you ask their are no redundancies and no furloughed staff either. We’re riding it out similar to what Rob is doing on full pay do we don’t get any government support either.

        • Mac D says:

          2 Apr2 April 08:20

          You make it sound like because directors setup a limited company they did it to save on tax and now they should suffer for doing something wrong. Being a small business owner and paying taxes as set out by the government should not be seen as something negative and reducing taxes, there are plenty of risks and downsides.

        • mvcvz says:

          2 Apr2 April 08:22

          Every last syllable Lady London has just said is absolutely on the money. Having operated my own Ltd for some thirty years, it became obvious to me a couple of years ago that the so-called benefits were no longer sufficiently substantial to offset all the downsides. So I closed it down and took on a salaried consultancy post for what I intend to be the final few years of my working life. It was without question the best professional decision I ever made.

  • Nick says:

    2 Apr2 April 06:13

    According to a piece in MoneySavingExpert, they have had confirmation from HM Treasury that:

    “Limited company directors, even if they’re the only employee, can furlough their PAYE income – ie, get 80% of salary up to £2,500/mth. This isn’t likely to be huge as most earn more via dividends (and there’s no help there), but it’s something, and you can combine it with universal credit. Unfortunately, unlike the self-employment scheme, if you do this, technically you can’t then work for the firm, but you can continue to perform your statutory director’s obligations, eg, official legal filings.”

    https://www.moneysavingexpert.com/news/2020/03/coronavirus-self-employed-and-employment-help/#limited

    • Mac D says:

      2 Apr2 April 08:17

      Yes but most will pay 12.5k on the PAYE which in this case would work out to be equivalent to 10k per year and it means you can not do any work, unlike self employed who can claim up to 50k per year but still work.

• TripRep says:

  1 Apr1 April 20:49

  Can we take it that the new Manchester clubhouse isn’t going to open on time lol 😀

• Anna says:

  1 Apr1 April 22:36

  Just my observation but my feeling is that Virgin had started to price themselves out of the market. They hike their peak prices well beyond those of BA, to the extent that many northerners who previously flew Virgin to Orlando and other destinations were instead choosing to travel with BA via London, despite the added inconvenience. (Though it’s generally become so expensive to fly direct to Orlando, people now often fly to another US city and then get a domestic connection).

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