Hard times for the airlines

The pandemic continues to have a profound effect on the UK’s airlines, virtually all passenger flights being grounded, the majority of aircraft in each airline’s fleets laid up and thousands of pilots furloughed and facing an uncertain future.

The UK’s major airlines, including BA, Virgin and EasyJet, have placed most their fleet into storage and furloughed most of the pilots and cabin crew. BA has already written to its staff about plans for a significant ‘restructuring’. Virgin boss Sir Richard Branson is seeking to sell US$485 million worth of stock in his space-tourism scheme, Virgin Galactic. In an order made out to the New York Stock Exchange (NYSE) on 11 May, he filed a prospectus for the sale of 25 million shares in the company. According to listing prices as of Tuesday 12 May, this equates to just under half a billion US dollars – or 22 per cent of the company.

“Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of Covid-19,” said a spokesman for Virgin Group in an official statement. Virgin Galactic underwent an initial public offering (IPO) last year, and Galactic stocks have since doubled in value. As the pandemic started to hit the airline industry Sir Richard was heavily criticised by the media for calling for government support to Virgin Atlantic after asking thousands of employees to take unpaid leave. He responded by investing £215 million into Virgin Group, and also offered his private resort, Necker Island in the British Virgin Islands, as collateral.

Going cargo-only