The boss of Virgin Atlantic is “100% confident” the airline can survive the coronavirus crisis, as it continues to explore all options for further funding.
Chief executive Shai Weiss said the airline was “too good not to survive this” and insisted talks with the Treasury over a potential bailout were proving “constructive”.
He said the Treasury had “set the bar very high”, with the airline told last month that it needed to resubmit its £500 million big for government state aid amid reports the Treasury had felt the carrier had not exhausted other options.
Weiss told The Sunday Times that he was looking for funding in the form of a “public-private partnership”, with the government bailout providing assurances to encourage other private sector investors to back the carrier.
About a dozen investment groups were today reported as showing interest in the UK long-haul carrier while talks continue with the Treasury and transport secretary Grant Shapps
“Private investors may want to know the government is there to provide some kind of assurance on the back end of that through the form of guarantees or direct funding,” Weiss said.
“Nothing should be ruled out, but I don’t think the government actually wants to be in the boardroom as a co-investor,” he added, when asked whether he thought government might take equity in Virgin Atlantic.
He insisted the airline would be able to repay the government in full within “two to five years” and potentially sooner.
“I can assure you that Virgin Atlantic can become sustainably profitable in order to repay the debt. These facilities may not actually be drawn down – they’re there to ensure that the airline can operate. But I would say that within two to five years, we would pay it back, and probably even sooner. This is not a handout. We will repay it with interest.”
Wiess insisted even his competitors would want to see them survive the crisis.
“Remember, competition is good for everyone,” he added. “Surely, even BA understand that they have become better through the competition that we provide them. Anybody who thinks that the ultimate game to eliminate competitors is in the long-term interest of consumers and businesses in the UK is actually mistaken.”
Speaking about the job cuts, which were announced to Virgin’s 9,000 staff on a conference call, Weiss said: “It’s just heartbreaking, devastating, especially when our secret sauce is our people.
“I think people heard the anguish in my voice announcing these job cuts, which no CEO and no company wants to do. But we are doing this so we can save as many jobs for when we resume normal flying.”
Reports in The Telegraph claimed Greybull Capital, the former owner of Monarch, and Wall Street fund Apollo Global Management are preparing to open negotiations with the airline’s advisers Houlihan Lokey.
It was reported on Saturday that the airline had retained restructuring specialists to consider a pre-pack administration, with firm Alvarez & Marsal also placed on standby to put contingency plans in place for an insolvency process.
