Virgin Atlantic is widely expected to ask the UK government for an aid package worth several hundred million pounds as it attempts to battle the Covid 19 crisis.
If so, Virgin would be the first UK airline to apply for state aid, after the country’s finance minister last week decline to set-out specific help for the aviation sector in his Covid 19 stimulus package.
While Richard Branson has pledged to inject $250 million into the Virgin Group, with the majority of the cash earmarked for the airline it has been hard hit by a long-haul business model which has been strongly impacted by the transatlantic travel ban and low levels of cash reserves.
Virgin Atlantic is expected to face hurdles is achieving government support given its degree of foreign ownership – Delta holds the other 49% of the carrier.
And while rival British Airways has a similarly cosmopolitan ownership structure, being part of the IAG group which also includes Iberia and is headquartered in Madrid, cash reserves at Virgin Atlantic are much lower. IAG has more than £9bn in cash and credit lines on its books whereas Virgin has just £83m in net cash according to its latest available report.