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British tycoon Richard Branson is in a frantic race to get his airlines to survive the impact of the coronavirus.
Until now, the governments of the United Kingdom and Australia – where Virgin Atlantic and Virgin Australia operate – have not agreed to provide him with the loans that the group requires to continue operating in the future.
In the Australian case, the firm voluntarily declared a suspension of payments on April 21, thus becoming the first major airline to collapse in Asia-Oceania due to the impact of the pandemic.
“This is not the end of Virgin Australia, but a new beginning. We are going to work day and night to make it happen, ”Branson wrote on Twitter.
The company was left in the hands of judicial administrators, while its destination will be defined.
In the UK the situation is different. Although the firm has not yet filed for bankruptcy, it is not in good financial health, as has been the case for much of the aviation industry.
Branson has asked the British government to give him oxygen, but many voices have risen against the request, criticizing him for not saving the company with his own fortune, estimated at more than $ 4 billion, according to Forbes, and resorting to the money. of the taxpayers.
Branson defends himself
“Many airlines around the world need government support, and many have received it,” Branson said in a letter to his workers.
The billionaire defended himself against criticism saying that his fortune is invested and, therefore, he does not have it “in a bank account, ready to take it out.”
He also responded to those who argue that he lives in a tax haven and does not deserve any help because he does not live in the United Kingdom and has not paid income tax in that country for 14 years.
“Joan and I did not leave the UK for tax reasons, but because of our love for the British Virgin Islands and in particular for Necker Island, which I bought when I was 29 years old.”
“Over time we built our family home there. The rest of the island is managed as a business, which employs 175 people, “said Branson.
And it is precisely this island that the billionaire has offered as a guarantee to the British government to lend him the funds.
Necker Island: a paradise of luxury
Necker Island has been Branson’s personal fiefdom for the past four decades.
As if it were a treasure, every time that part of the island has been devastated by a hurricane (or fire), the businessman has invested large sums of money in its reconstruction.
The island works as an exclusive summer resort, where the cheapest room costs US $ 15,000 for three nights, according to information available on its website.
It organizes everything from sports tournaments to exclusive private events that include weddings, leaders’ meetings or simply meetings and vacation trips.
Some analysts interpret the idea of offering the island as a guarantee as a way of putting one of their most precious possessions on the table.
That is, it would not only be about the commercial value of the island, but also the implicit idea that the businessman will do everything in his power to recover it.
Branson has been particularly hit by this crisis, as his business group has investments in airlines, hotels and cruises, some of the sectors with the highest losses due to the pandemic.
The fact that your island is seen as a tax haven of entertainment for tycoons, also does not help you get the government support the businessman requires at the moment.
Although the price of the island is unknown, Farhard Vladi, a businessman who leases and sells private islands, told Bloomberg that in 2017 the island had been valued at more than $ 100 million.
In it, the billionaire who will turn 70 in July, has received guests such as Barack Obama or Princess Diana, among a select group of influential characters and celebrities who have come to vacation at the place.
Branson’s desperate bailout from the British government is yet another case in a long list of airlines that have applied for tax loans in different countries to avoid bankruptcy.
The global aviation industry has been one of the most affected by the pandemic.
The number of air flights has fallen close to 80% in 2020 and in certain regions almost all passenger flights have been suspended to prevent the rapid spread of the virus.
The International Air Transport Association (Iata) has estimated that half of the airlines could run out of liquidity in May or June, making the negotiations to obtain resources advance at full speed.
There are currently about 17,000 aircraft on the ground at airports around the world, according to consulting firm Ascend by Cirium, representing about two-thirds of the international fleet.
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