Shocking news was made throughout the investment community on May 11th. It was announced that Sir Richard Branson would sell his full stake in Virgin Galactic, which is worth £500 million. He’ll use these funds towards assisting Virgin Atlantic. This decision follows after Branson received backlash against requesting a financial bailout from the United Kingdom. Selecting to sell his stocks with Virgin Galactic will enable the knighted CEO to secure operational costs for a prolonged period. Support will also be provided to subsequent companies in the Virgin Group, with their holdings include vacation properties in tropical destinations.
Sir Richard Branson initiated the potential bailout when it was announced that three thousand jobs would be terminated, with operational status at Gatwick Airport ending permanently. Branson didn’t accept this announcement, even with Virgin Atlantic struggling with profits amidst the novel coronavirus pandemic. It should be noted that Branson will continue to procure a loan from the United Kingdom, which would secure Virgin Atlantic with £1 Billion. Considering the influence that the airline industry has over global economies, a bailout for the majority of these companies is inevitable.
Delegations with the United Kingdom Parliament will continue until an agreement can be made. However, there’s an excessive level of taxpayers that disagree with this bailout. Virgin Atlantic is a private company that should obtain privatized loans, which would be possible through one of its multiple partnerships with investment equity firms. Those include Apollo Global Management, British Steel, and Greybull Capital.
Backlash with Government Bailouts
Aviation assists millions worldwide with careers, bringing trillions into the global economy. Multiple nations have confirmed their respective bailouts for this industry, including Canada. Justin Trudeau’s Liberal Government will shortly award billions to the Aviation Industry, disregarding the taxpayers and the trillions being spent during COVID-19. Regardless of what happens moving forward, these taxpayers should have some benefits with these airlines.
The chances of that happening are minimal, as the aviation industry thrives on overcharging consumers and providing them with lacklustre quarters. Analysts worldwide believe that the Aviation Industry will topple after the pandemic, with consumers potentially not willing to be victimized any longer.