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Virgin Atlantic abandons plan for Government bailout, has five weeks to find a buyer (Telegraph)

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The Sunday Telegraph reports that Sir Richard Branson has abandoned plans for a Government bailout of Virgin Atlantic and is now desperately seeking a trade buyer.

The airline will be put into administration at the end of May if this cannot be achieved.  Accountancy firm EY is reportedly already lined up to act as administrator.

The airline is reported to have hired investment bank Houlihan Lokey, which specialises in distressed debt situations, to approach potential investors.  50 parties are believed to have asked for financial information.

Interestingly, none appear to be trade buyers.  Names quoted included hedge fund Lansdowne Partners, Singapore’s sovereign wealth fund, US private equity group Centerbridge Partners and distressed debt investor Cerberus.

Potential bidders are expected to form consortia to submit bids.  It is important to remember that a 51% shareholding must remain with UK or European Union entities under EU aviation law.  Only Lansdowne Partners, of the names listed above, has a qualifying domicile.

Delta Air Lines, currently a 49% shareholder, has already said that it will not commit further funds to the airline as it deals with its own financial crisis.  Delta is keener to take money out of Virgin Atlantic, with the airline currently owed $200m which was due as a transition payment to reflect the addition of Air France and KLM into the Delta / Virgin transatlantic joint venture.

Delta’s CEO Ed Bastian is quoted as telling MSNBC that it supported administration, believing that there would be bidders for the assets.  Any solution is likely to see Delta’s shareholding wiped out, but this is unlikely to be a major problem as the real value for the airline is in the joint venture agreement.  Virgin Group may be reduced to a minority stake unless there is an issue over hitting the 51% EU quota.

Is this really the last throw of the dice?

Not necessarily.

It is possible that the airline will return to the Government with a request for aid before putting the airline into administration.  As we covered, the original bail-out request was rejected because the airline was not believed to have exhausted all other potential options.  This new process may be a way of proving to the Government that no other alternative is possible.

The Sunday Telegraph article is here.


How to earn Virgin Points from UK credit cards

How to earn Virgin Points from UK credit cards (August 2022)

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 Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

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

Virgin Rewards credit card

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.

American Express Amex Gold

American Express Preferred Rewards Gold

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

EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.

American Express Platinum card Amex

The Platinum Card from American Express

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

Amex Platinum Business American Express

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American Express Business Gold

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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 (350)

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

  • ABC says:

    How much will my Flying Club points be worth in 6 weeks?

    • Nick says:

      Faites vos jeux! 😉

    • Thywillbedone says:

      The square root of the amount of tax The Bearded One has paid in the last three decades?

      • C F Frost says:

        The message is clear. No matter how you spin your financials, no matter what you might about how Virgin Care invests in the NHS etc, if you attempt to avoid corporate tax that is yours to pay but for the existence of tax havens, then what else can you expect? And If your airline has a logo of a woman flying away with the Union flag in her wake, then just be glad that a charge of false adverting is not yours to deal with as well.

        The same logic applies to so many other companies. As a ‘fair tax’ company I buy my coffee at AMT, and not Caffè Nero. That’s maybe because I’m a doctor, and know that our hospitals need our profitable companies’ tax.

        • TGLoyalty says:

          Aviod corporate tax? HE lives in BVI, Virgin Atlantic and Virgin Group are UK ltd companies.

          • Sean says:

            With large brand payments reducing UK taxable profits to nil and going overseas and not being taxed.

          • Doug M says:

            How much are the brand payments made in the last 10 years?

          • TGLoyalty says:

            The brand payments go to VHG which is a UK ltd company …

      • Lady London says:

        Hopefully not the square root of -1

  • Charlie says:

    Assuming Virgin Flying Club balances will be wiped out in an administration, and the airline continues as a going concern with a bailout or buyer, what will happen to existing flights booked with miles?

  • Murray says:

    Oh no. I have several hundred thousand Flying Club miles still to spend. I’m at a loss of what to do. Wait and hope that all will be OK or transfer them to a partner that won’t be nearly as good a redemption as direct with Virgin. Is it likely we will lose our miles?

  • Jonathan says:

    @rob does this change your thoughts on cashing out any points?

  • Mike P says:

    I wonder if this process fails whether the government would offer assistance or whether this is the last chance for Virgin Atlantic? I’m guessing the government would decline to assist and let it go in to administration; unlike BA it’s not strategically important to the UK economy.

    • melonfarmer says:

      Is this not a box ticking exercise? “Have you exhausted all other funding options? No? Well get on with it”.

      Branson’s “poor me” letter was a strategic error when the general public probably thinks he owns anything with a Virgin logo on it.

      Other than 49% of Atlantic, what does Virgin (he) own? Money is Clydesdale/Yorkshire, Media is Liberty. Gyms, gambling websites, experience vouchers? On second thoughts, I don’t really care.

  • Magarathea says:

    I have texted VA over the last few days to try to transfer a small balance of miles to IHG and they came back this morning with the following reply.

    “Hi, thank you so much for your patience whilst we respond to thousands of customers whose travel plans are impacted by Covid-19. Our customer contact volumes are unprecedented and our teams are working around the clock to provide help and support. For this reason, we are having to prioritise responding to customers who are travelling in the next 14 days, and are asking everyone else to kindly come back to us once within 14 days of your travel date and our team will be able to help . Our sincerest apologies that we are unable to assist you right now, please be assured we are doing all that we can to answer as many customer enquiries as possible. In the meantime, please continue to refer to our website for the most up to date information. Thank you for your understanding.”

    The transfer out door seems closed.

    • mark says:

      That’s just the basic message everybody is getting if you contact VA. My reward flight was cancelled a few weeks back. I texted them last week to discuss options, the message you have got is what I received.

      I understand that reward miles are held by a separate company. They may not go into administration, but I do not see the miles having any tangible value if VA goes to the wall. Perhaps Rob can comment?

      • Oli says:

        If there is a separate entity holding the points, it’s cash inflows come from VS so it’s likely to go bust too. Especially with high cash out to Hilton

    • Jonathan says:

      I had the same reply so I rang them . It took an hour and a half of hanging on but I eventually got through and made the transfer to IHG . The miles left my account and I’ll just have to wait and see if they get to IMG.

    • Alan says:

      No, standard message I got weeks ago.

    • Alex Sm says:

      My miles were transferred through WA yesterday. Keep trying!

  • Mark says:

    Renewal coming up for my Virgin premium card.
    If I don’t cancel and Virgin do fold will the fee for the year be refundable?
    I can’t see them getting bailed out with the public in so much up roar about Bransons tax evasion.

  • AndyW says:

    Would someone be able to outline the process for texting and getting a transfer to Hilton? I think I may go for it. Thanks on advance

    • Munch says:

      +1

      • Liz says:

        Send a text to +447481339184 and say you want to transfer your Virgin miles to HH. Then wait till they reply – will probably be several days. They will ask some security questions – then a few mins later you will get a confirmation text.

    • @mkcol says:

      Perhaps research it on VS own website yourself, it’s not that difficult if you look under the contact us section, rather than rely on a random answer from a stranger here who could actually be giving their number out as part of an attempt to defraud you.

      • AndyW says:

        I do wonder why people take the time out of their day just to offer a waste of time reply like this. If you don’t want to help, no worries, just keep to yourself. This forum is generally extremely helpful, and I am smart enough to sanity check anything I get.

        • Leo says:

          +1. I did the above as Liz suggests on 31/3 but am still waiting 26 days on. I texted to check why the transfer hadn’t completed yet. They got back to say we are sure it will all be fine but it can take up to 30 days etc.

          • Liz says:

            I did one to my IHG account and one to my hubby’s IHG account on 25/3 and these have already posted. Waiting for a final one to go to my HH account which I did on 15/4.

      • Munch says:

        Thanks Liz for your helpful response. It’s always great to ask for advice on this informative site – you never know is there is an more effective/successful method.

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

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