Virgin Atlantic will soon ask the government for commercial loans and guarantees worth hundreds of millions of pounds, according to reports.
The Financial Times said the airline would be among the first in the UK to do so, adding that other carriers, including easyJet, Loganair and Eastern Airways are considering following Virgin’s lead.
Sky News said it had learnt that Peter Norris, the chairman of Virgin Atlantic’s majority shareholder, Virgin Group, is expected to write to the prime minister on Monday to highlight the urgency of the situation. It is hoped the government will provide airlines with a credit facility with the emergency financing set to be repaid once trading returns to normal.
Chancellor Rishi Sunak dashed UK aviation leaders’ hopes of a general bail-out of the sector earlier this week but pledged to consider “bespoke support as a last resort” for individual airlines.
Leading airlines jointly submitted requests for emergency funds, tax deferrals and credit guarantees last week, with Department for Transport (DfT) officials reportedly “stunned” to learn how rapidly airlines could run out of cash.
Representatives from easyJet, British Airways owner IAG, Ryanair and Virgin Atlantic met transport secretary Grant Shapps to ask for support for the sector.
On Tuesday, the chancellor responded in a letter to the industry, noting the measures already taken to support large UK companies and said: “Further taxpayer support would only be possible if all commercial avenues have been fully explored.”
Virgin Atlantic founder Sir Richard Branson will inject an initial $250 million into companies across his Virgin Group empire as they battle to survive the coronavirus pandemic.