Coronavirus: Aerospace giants lobby for Virgin Atlantic rescue deal
Several members of the UK aviation sector are lobbying the government to support Virgin Atlantic with financial aid through the coronavirus crisis, Sky News reported today.
Aerospace giants Airbus and Rolls-Royce have written separately to transport secretary Grant Shapps, as has UK’s biggest airport Heathrow, asking the government to “do all it can to support Virgin in these extremely difficult times”.
Virgin’s bosses have been vocal about the need for industry wide support, having already called for £7.5bn in aid for the sector as a whole.
However the letters are an indication of just how much pressure Virgin is under due to the collapse in demand caused by the coronavirus pandemic.
In a letter seen by Sky, Airbus’ UK chairman John Harrison warned that Virgin Atlantic’s “collapse could have an extremely negative impact on the A330 programme”.
“As you will be aware, all wings for these aircraft are designed and manufactured in the UK, and orders from airlines like Virgin are vital for the continuation of our business”, he added.
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Industry sources confirmed that Heathrow had also been in contact with Shapps.
The airline, which is privately owned, is reportedly seeking hundreds of millions of support in the form of loans guarantees.
The letters come after chancellor Rishi Sunak ruled out an industry-wide package of support, saying instead that airlines could receive aid on a case-by-case basis after they have exhausted all other means of raising cash.
Talks between Virgin and government officials are ongoing.
Virgin Group founder Sir Richard Branson has already put more than $100m into the airline, which has been struggling due to the shutdown of the lucrative transatlantic route.
A spokesman for the DfT said: “The aviation sector is important to the UK economy, and firms can draw upon the unprecedented package of measures announced by the chancellor, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.
“We are continuing to work closely with the sector and are willing to consider the situation of individual firms, so long as all other government schemes have been explored and all commercial options exhausted, including raising capital from existing investors”.
City PM has contacted Airbus and Rolls-Royce for comment.