Some of the biggest players in the aviation industry have written to the British government urging ministers to approve a multi-million-pound bailout for Virgin Atlantic or face the risk of the embattled carrier going bankrupt. Letters seen by Sky News show that European aircraft manufacturer Airbus, along with Rolls-Royce and Heathrow Airport have all written to the British transport secretary requesting a rescue package be given the green light as soon as possible.
Virgin Atlantic bosses had previously written to the government claiming a £7.5 billion industry-wide bailout may be needed because of the dramatic and continuing impact of the COVID-19 crisis. Lawmakers initially pledged to support the industry but backtracked just days after promising to support airlines.
The Chancellor, Rishi Sunak wrote to airlines last week saying that any bailout would only be offered “as a last resort” and that airlines must first exhaust all commercial opportunities before going cap in hand to the government.
Now, industry heavyweights have penned letters to Transport secretary Grant Shapps, urging the government to “do all it can to support Virgin in these extremely difficult times”.
The letters are believed to have been written at the request of Virgin Atlantic as it battles to stay afloat. The airline has placed the vast majority of its employees on at least eight weeks of unpaid leave and senior executives have forfeited their pay for the next few months.
Last month, Sir Richard Branson pumped an extra $100 million into the airline which is joined owned with Delta Air Lines.
John Harrison, the chairman of Airbus UK wrote in one letter that the collapse of Virgin Atlantic would hit British engineering, saying the airline’s “collapse could have an extremely negative impact on the A330 [aircraft manufacturing] programme”. Virgin placed an order for 14 Airbus A330neo aircraft last year.
“As you will be aware, all wings for these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business,” the letter, sighted by Sky News, read.
He also said it was “important for UK passengers to have access to a market that has choice and competition”. The letter continued: “Virgin has a vital role in ensuring this remains the case and also contributes to the tourism industry in the UK through Virgin Holiday.”
Similar letters have been sent from engine manufacturer Rolls-Royce and Heathrow Airport.
The International Air Transport Association (IATA) has called on governments around the world to urgently offer financial support for struggling airlines. IATA’s director general Alexandre de Juniac said the Coronavirus pandemic was having a “devastating” effect on airlines and many faced bankruptcy if governments didn’t step in with immediate financial support.
A spokesperson for the British government called on airlines to take advantage of existing financial assistance packages and that it was working with individual airlines should all other options be exhausted.
