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

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• MrCinnamon says:

  26 Apr26 April 10:52

  Cancelled my VS reward flights for September to USA. I was planning to anyway, before this news broke. I can’t see the world returning to normality by then & with The Fat Satsuma in charge over there, I dread to think how things will escalate.

  Was in NYC as the shutdown began, got out on March 19th.

  No idea when I will choose to fly again, so maybe I shall now accumalate enough miles for a trip to the antipides.

  • Peter Woodall says:

    26 Apr26 April 12:31

    Did you get your taxes refunded less the £30 charge?

• John says:

  26 Apr26 April 11:15

  Glad I never bothered with VS after cashing out 20K to Hilton a few years ago. I could have done all this waitrose or morrisons whatever as a way of acquiring more Hilton points (I would much rather have 3 million Hilton points than any number of VS miles) but it looked like a lot of effort for low gain.

  Even if everything is fine with VS in the end I think all the worrying comes at a cost too.

• Simon says:

  26 Apr26 April 11:51

  Old argument but I see no reason for the government to help here.
  If IAG got into trouble, it would have to issue equity, if things got really bad the government would acquire it (which would probably come at a bargain price relative to assets).

  So any deal should revolve around equity. Paying loans then risks a similar thing happening again in a year if there are further lockdowns, or if demand drops and cashflow dries up.

  Not really sure that Virgin can be viable at the same pre-virus size – it’s got some good routes but some appear to be quite vulnerable with plenty of competition.

  • pauldb says:

    26 Apr26 April 12:10

    Debt is the senior part of the structure. Equity would be riskier: only giving the government a return once other debt holders have been paid back. If VA can’t pay back the government debt, the government can insist on totally wiping out equity holders, and can also take equity warrants now to get a share of the upside.

  • Usetolikethissite says:

    26 Apr26 April 12:49

    ON that basis what eould your view be of the government helping out tata steel yet again. Apparently they are going to be asking for £500m. Personally i see no difference, tjey employ around 8000 people which is similar to virgin and cteate a hell of anlot mote pollution. I would be interrsted in anyones thoughts as everyone seems to always want the government to bail out tata steel but are quite vile towards any bailout of virgin. And before you comment about personailities, owners etc lets kust think about the ecomomics of both companies, them comment!!!!!!

    • Lady London says:

      26 Apr26 April 15:46

      All I can say is that since Tata has obtained outsourcing contracts with major companies in the past year (some owned by Tata, some not) I am constantly being called on dodgy phone lines by agencies in India who’ve got the business from Tata, to earn for them in contracts inside those major contracts in the UK.

      Most of those agency staff calling from India because they’ve got business from Tata don’t even know what they’re recruiting for and can’t answer any questions about the role. Quite a few of them have very poor English and often the phone lines they call on are poor quality. Kind of like being called by a researcher for an agency in the UK – a necessary first step often – but 1% of the quality.

      After having had about 20 approaches for Tata work in the past year, generally as soon as I hear the poor quality long-distance line and poor language I just say “this is for Tata isn’t it”. I get a surprised “Yes”. If what they’ve called to talk about isn’t described clearly and a couple of key questions answered fully then I just say thanks but no thanks.

      Do you think we should let Tata blackmail the government into giving them more subsidies? They don’t seem to be recruiting British contractors using British agencies. So I wonder what else is goi f on in the supply chain of any British company owned by Tata.

• Chris says:

  26 Apr26 April 11:54

  I have 70k Virgin air miles…how safe do you think they are Rob, should I consider transfering / spending ?

  • Doug M says:

    26 Apr26 April 11:58

    They’re 31.72% safe and 93.7% unsafe.
    Rob’s done an article and there must be several thousand comments on the subject.

    • Peter K says:

      26 Apr26 April 12:42

      Yep

• vol says:

  26 Apr26 April 11:59

  In other news – I got an email from Virgin money aka Clydesdale that they had closed my account – zero balance – no warning, just “see you later” anyone else had similar?

  • Doug M says:

    26 Apr26 April 12:02

    I’ve wondered why banks don’t close 0 accounts more aggressively. Given the expense of mailing the necessary information and maintaining such an account it seems an obvious move to me.

    • Andrew (@andrewseftel) says:

      26 Apr26 April 14:11

      Very expensive to acquire them too. Reactivation rates aren’t too bad generally, you can get ongoing credit bureau data and you have some additional avenues from a data protection point of view to market to existing customers.

  • Wally1976 says:

    26 Apr26 April 12:38

    My wife had this too

  • Novice says:

    26 Apr26 April 15:43

    Virgin Money have actually been good with me as I wanted to shut a fixed rate account with 2022 maturity and wanted the money now to invest in the markets so I webchat with them saying I’m struggling to live as I have no income due to Lockdown and viola they transferred the money without penalty or fees and shut the account. But I did remind them that a lot of banks are not charging fees etc.

• Save East Coast Rewards says:

  26 Apr26 April 12:08

  I noticed at least three comments in this thread asking if Rob has changed his view on transferring miles out to Hilton/IHG.

  WHY? Rob has made his position clear and unless you’re in exactly the same position what he does makes no difference to what you should do. He has plenty of Hilton points and so doesn’t see the value to adding even more. On the other hand I can’t have enough Hilton points. Staying over 100 nights last year on business I use the points I earned for free leisure travel, when the balance started getting too high I also used them for business travel (it’s my company).

  If I had a high balance that I was struggling to use then I wouldn’t transfer my points over just for the sake of it.

  Let’s use an example of bmi. When BA bought them many people panic redeemed on Star Alliance flights they didn’t really want, whereas some used it as a nudge to get one last redemption to their favourite destinations. Some people also prematurely cancelled the bmi credit card. In the end BA transferred all points and status over to BA and even kept the bmi credit card alive (closed to new applicants) for a number of years that earned more points than BAs own card.

  If I had panic transferred diamond club miles or used them to book flights I didn’t really want then I’d have been upset that I wasted them.

  So if YOU have some value in Hilton and IHG points and were struggling to think what you’d use them for on VS anyway then you might as well transfer out. If you’re still hoping for a dream redemption on VS then keep a hold of them for now.

  • Doug M says:

    26 Apr26 April 12:10

    Balanced. V good post.

  • Johnny Tabasco says:

    26 Apr26 April 12:32

    spot on

  • Spaghetti Town says:

    26 Apr26 April 15:44

    Do you have much appetite for leisure travel after spending 100 nights a year away on business?

  • Harry T says:

    26 Apr26 April 18:03

    Agree with this – would welcome more comments like this.

    I only had about 50k Virgin miles and the only flight I was interested in was redeeming on ANA – nowhere near enough points for that, so transferring to Hilton seemed best given the current risks.

• Jonny Price says:

  26 Apr26 April 12:35

  I don’t see any reason why the UK government should bail out Virgin Atlantic.They are not a viable entity – they couldn’t make money at the top of the cycle. There are very few hubs in the world that have more than one based carrier – as there is sufficient competition between the hubs. For almost every route that Virgin flies there are at least two other carriers that fly the same route (normally BA plus the hub carrier of the destination airport), plus of course the various indirect options. People often mention their presence in the UK regions, but it is a tiny fraction of their overall operation, all of which can be picked up by other carriers when demand allows. If the airline industry is going to be slimmer for a while, it just doesn’t make sense to prop up carriers that are not required.

  • Usetolikethissite says:

    26 Apr26 April 12:50

    Again perhaps your comments on a bail out of tata steel who again arr not a viable company. But you wiuld probably want that!!!!

    • Novice says:

      26 Apr26 April 15:45

      Ur username is 👍

  • James says:

    26 Apr26 April 13:08

    This isn’t true. They were perfectly viable up to this pandemic, and were well head of their own turnaround plan.
    You keep lieing to yourself and others though.

    • Opuada says:

      26 Apr26 April 15:45

      the model itself is not even viable let alone the business. I think Virgin honestly took this the opposite way they started long haul(they weren’t even solid there) falling in and out of profitability does not sound viable to me. It may have been viable at a point but it no longer is. viability is not permanent anyway then they tried to go short haul and that was an epic failure both times. They should’ve started short haul first, build a strong customer base have a great intra-european connection and then look to launch long-haul that’s the model that has worked. Like Jetblue has a strong domestic base with LOADS of loyal customers, the moment they launch transatlantic best believe every seat will be taken.

      Virgin has just been coasting through the years, as long as i remember they can sustain profits for 5 years straight. I don’t know any other airline that ONLY does long-haul ZERO short haul ability.

  • Lady London says:

    26 Apr26 April 15:55

    +1
    We will have to use other tools than propping up Virgin, who didn’t even make money in the good times, to limit the abuses BA can perpetrate as the dominant airline in the UK. Propping up Virgin is not going to solve that problem and there’s no other reason to do it.

    • Chrisasaurus says:

      26 Apr26 April 20:03

      I agree with near enough everything you say LL – but you can surely see how that can come across as callous to the thousands of employees and suppliers who depend on VS.

      I don’t disagree with the sentiment more the delivery – those stakeholders would argue they constitute a reason (if not a good enough one)

      • Lady London says:

        27 Apr27 April 10:19

        It’s a lost cause @chrisasaurus. Unfortunately there are just as many deserving employees elsewhere and Viegin has proved consistently it’s not a viable concern corporately.

        I particularly object to foreign ownership and non-UKcorporate-tax-paying ownership using employees as blackmail to extort subsidies from government in bad times.

        If they reported proper profits in the good times to the UK and paid a decent amount of corporate tax on those my attitude would be different. But we have old industry (Tata), digital industry and now airlines all wanting the UK to donate to their future profits now.

        “Privatised profits publicly funded losses”. I heard that phrase first on here and that says it all.

    • Ken says:

      26 Apr26 April 23:26

      I don’t even think £500m loan would be enough for Virgin.
      Which routes would it have a significant competition issue without Virgin ?
      The Caribbean, for sure and Cape Town. Not exactly UK plc priorities.

• Steve R says:

  26 Apr26 April 12:50

  Don’t see BA flying from Manchester to anywhere other the LHR except a couple of places during the summer

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