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Bad Times For Billionaire Branson–Staff At Virgin Atlantic Asked To Take Unpaid Leave As Coronavirus Cripples Air Travel

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Billionaire entrepreneur Sir Richard Branson has been criticized by a U.K. politician for airline Virgin Atlantic’s request on Monday for staff to take eight weeks unpaid leave during the coronavirus pandemic.

Labour MP Kate Osborne, the second U.K. politician to be diagnosed with coronavirus, described Virgin Atlantic’s decision as “an absolute disgrace” on Twitter.

Author Liam Young tweeted, “Virgin Atlantic have 8,500 employees and Branson has asked them to take 8 weeks unpaid leave. It would cost £4.2 million to pay all of these employees £500 a week to cover this leave. In total that’s a cost of £34 million for 8 weeks.”

The implication appears to be that billionaire Richard Branson, whose net worth Forbes estimates $3.8 billion, could afford to cover this cost.

Virgin Atlantic confirmed in a statement Monday that it plans to reduce its schedule and prioritize routes based on customer demand. The airline predicts an 80% reduction in flights per day, and adds, “As a direct consequence we will be parking approximately 75% of our fleet by 26 March and at points in April will go up to 85%.”

Virgin Atlantic describes the changes as “drastic measures” put in place to “ensure cash is preserved, costs are controlled, and the future of the airline is safeguarded.”

Adding, “Staff will be asked to take eight weeks unpaid leave over the next three months, with the cost spread over six months’ salary, to drastically reduce costs without job losses.” The airline confirms its decision has received the support of unions BALPA and UNITE in agreeing to the unpaid leave.

A Virgin Atlantic spokesperson said: “The aviation industry is facing unprecedented pressure. We are appealing to the [U.K] government for clear, decisive and unwavering support. Our industry needs emergency credit facilities to a value of £5-7.5 billion, to bolster confidence and to prevent credit card processors from withholding customer payments.”

Bad Times For Branson

Branson’s business empire has been hit particularly hard by the coronavirus pandemic.

On March 14 the Virgin Voyages cruise ship operation decided to postpone the launch of its new Scarlet Lady cruise line. “The current global health crisis is understandably making many people rethink upcoming travel plans,” Virgin Voyages confirmed in a statement.

On March 5, British airline Flybe — which is part owned by Virgin Atlantic— collapsed after it succumbed to its financial woes and weakened demand because of the Covid-19 outbreak.

Following the announcement of Flybe’s collapse, Virgin Atlantic said: “Sadly, despite the efforts of all involved to turn the airline around, not least the people of Flybe, the impact of Covid-19 on Flybe’s trading means that the consortium can no longer commit to continued financial support.”

Flybe, which once was Europe’s largest independent regional carrier, narrowly escaped collapse in January, after being bought by Cyrus Capital, Virgin Atlantic and Stobart last year.

Virgin Galactic, Branson’s publicly traded space tourism arm, has seen its shares slump since its mid February high of $37.26 on the NYSE. Having lost another 10% of value as of 4:30 pm U.K. time on Monday, Virgin Galactic is priced at $13.30 and falling. Branson’s Virgin Investment Limited owns 47% of Virgin Galactic through an investment entity, Vieco.

David Dawkins, Forbes Staff, Billionaires

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