Virgin Atlantic may receive a lifeline bailout under the Government’s new ‘Project Birch’
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Another window of opportunity has opened for Virgin Atlantic. The Treasury revealed, via the Financial Times this morning, that it is about to launch ‘Project Birch’ to bail out ‘strategic’ businesses.
‘Project Birch’ is an admission by the Government that the country will suffer disproportionate damage if key businesses in specific sectors collapse under the weight of coronavirus. Aviation, aerospace and steel are amongst those expected to benefit.
The Treasury is quoted as saying:
“In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a ‘last resort’ basis. …… We are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer.”
The key point is whether failure would “disproportionately harm the economy”. Whilst you may suspect that Virgin Atlantic would not necessarily be included here, it is known that the scheme is likely to include Jaguar Land Rover which has a similar niche market position and which is seeking £1 billion.
What both companies have in common are large high-tech supply chains with UK manufacturing, which in the case of Virgin Atlantic is primarily Airbus, via its sites in Wales, and Rolls-Royce.
Tata Steel is also rumoured as a beneficiary of ‘Project Birch’. Tata is believed to have approached the Government for a £500 million bail-out over recent days.
Whilst the scheme could include the Government taking equity stakes, it is believed that the preference is for carefully targetted loans.
Meanwhile, it was revealed over the weekend that Virgin Atlantic’s debt holders have appointed Deloitte to advise them and to help co-ordinate a joint response to any proposals. Attempts to put the airline into a pre-pack administration, where it is immediately bought back debt-free for £1, are being hampered by the rules surrounding airport slot ownership during insolvency and the fact that Virgin’s Heathrow slots have been used to guarantee a loan.
Sir Richard Branson has recently raised funds by selling down part of his stake in Virgin Galactic, with much of this money earmarked for Virgin Atlantic. 49% shareholder Delta Air Lines is blocked from providing additional support under the terms of its own bailout by the US Government.
The FT article is behind a paywall but City AM has a summary here.
We are also expecting confirmation of the €9 billion bailout of Lufthansa by the German Government over the next 24-48 hours. It is believed that the package has hit a stumbling block due to the insistence that existing orders for €5 billion of new Airbus aircraft are met, despite the airline no longer having any need for them, and concerns that the EU will block the proposal.
How to earn Virgin Points from UK credit cards (March 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 points bonus 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.
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express comes with 30,000 Membership Rewards points, which convert into 30,000 Virgin Points.
The Platinum Card from American Express
30,000 points and unbeatable travel 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.
Until 30th March 2023, the sign up bonus on American Express Business Platinum is increased to 120,000 Membership Rewards points – click here. The bonus on American Express Business Gold is increased to 60,000 Membership Rewards points – click here. T&C apply, see the application forms for details.
American Express Business Platinum
Crazy 120,000 points bonus (to 30th March) and a £200 Amex Travel credit every year Read our full review
American Express Business Gold
60,000 points sign-up bonus (to 30th March) 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.)