Iberia and Vueling are bailed out by the Spanish Government

This article is closed to new posts. Discussion continues in the HfP Forums.

• Arnie says:

  2 May2 May 12:49

  It’s very emotional isn’t it. And its going to become more emotional. Here we have Easyjet paying its largest individual shareholder his dividends ( I think 40 + Million ) in Monaco and then being offered and taking £600 million in loans. The most successful ( financially ) airline in Europe Whizz Air, not even a UK airline but registered on the UK Exchange taking £ 300 Million loan . I think at 0.4% interest. And Virgin being refused a loan because it has no ” marketable debt “. Ie its not a public company. But the backlash against Branso because he happens to live in the Caribbean has been enormous and the comments directed about him have been in many ways completely irrational.

  Virgin Atlantic is a British company, paying taxes in the UK, employing UK crews who then pay taxes and is considered a great company to work for – ask any of the staff. yes they are ostracised publicly and castigated simply because Branson lives in the Virgin Islands. What about their staff? You could argue that Virgin have also been the one to keep BA in line to some degree on pricing. Then here we have BA using every tactic they can to utilise a public health crisis to re adjust their operating model. Can you blame them, well I think not. But they could deal with it in a more humanitarian way. However remembering that they are a public company who have public liabilities and shareholder liabilities that they can be challenged on. I think their staff can hopefully rely on their unions to defend their positions as strongly as possible and hopefully reach a decent settlement for those that do have to go. And there will be many.

  I do think it is somewhat churlish to blame the current government for the position that these staff find themselves in. We have had a series of both labour and conservative administrations that have allowed the position to reach the current situation. Its also the current government who have allowed my own company to furlough but keep employed 30 + staff in the hope that we can restart the business as soon as possible. And it is we as directors who have made the decision to continue to pay the staff the balance from company reserves. If we were a public company rather than a private one then I am not sure we would have been able to do the same. I think the situation needs to have some balance.

  • happeemonkee says:

    2 May2 May 14:26

    This x 100%. Well said

  • Ralph says:

    2 May2 May 15:49

    You don’t need to be a public company to issue what you refer to as ‘’marketable debt’. However, if you issue public debt, you do need to issue a prospectus, file proper accounts/financial reports and you need a credit rating for the issuing entity. If you have these things in place as EasyJet and Wizz do, the Bank of England will, under the Covid provisions, buy that debt directly from you. Virgin Atlantic provides insufficient data so cannot use the various facilities on offer. It needs a ‘bespoke’ and the terms will also be bespoke. Essentially, the government has some confidence that some firms including Easy & Wizz will pay back these emergency loans. It would be totally wrong of the government to hand out large loans to companies that have no prospect of paying them back. Is that what you really want them to do with taxpayer money?

    • Rob says:

      2 May2 May 18:16

      The question is: would Virgin Atlantic have got an investment grade credit rating on 1st March? This is the ONLY criteria for accessing the CCFF for those with debt in issue. I think that, if Virgin would have had tradeable debt, it WOULD have been investment grade on 1st March. This means that it could have accessed the facility.

      • Tim says:

        2 May2 May 23:53

        Right, which only means they are not a fit business in the first place.

        Like Northern Rock in ’08, the best case scenario is that VA officially goes into the administration and the Govt can maybe decide to nationalise it by taken over the all the private share at zero value (complicated since 49% share is owned by Delta). This ways some jobs maybe saved in the short term, but then eventually they’ll need to restructure to make it marketable to sell the business back to private sector. Govt only did this for Northern Rock in ’08 because the UK banking reputation is at risk. I really doubt the govt would do this for VA.

• Briand says:

  2 May2 May 14:26

  And then I imagine you would be very happy, wildcat strikes week in week out.

• Sean says:

  2 May2 May 14:27

  They tried that last year remember, when the pilots tried to hold BA to ransom. Didn’t work then did it?

  • Chrisasaurus says:

    2 May2 May 15:40

    Well, it possibly was worming but they j exlkicably folded after having inflicted a lot of damage on themselves…

  • Briand says:

    2 May2 May 20:11

    Or they accepted that they were actually on a pretty good deal anyway…and it was just seen as greed.

• insider says:

  2 May2 May 17:04

  how effective are these strike going to be with 95% of flight grounded?

  • Briand says:

    2 May2 May 20:13

    You obviously won’t be happy without your wild cat strikes..

• Jessiefan says:

  2 May2 May 17:43

  This has turned from a helpful factual site, to complete fantasy world. It is getting hard to sift out the crap and prejudice because there is so much of it.
  One thing not lacking is the amount of armchair experts, it would be brilliant for the economy if their expertise and foresight could be channelled somehow LOL

• Erico1875 says:

  2 May2 May 18:14

  I really despair at the kicking emplyees across all industries are going to get post Covid 19..
  I suspect once this is all done and dusted, “Key Workers ” will revert back to being poorly paid “Expendibles”

  • Chrisasaurus says:

    2 May2 May 22:10

    Of course they will.

    The clapping and saucepan banging is their reward – you didnt think the DM classes would countenance anything more than that did you?

• Opus says:

  2 May2 May 22:38

  BA gets a lot of heat for running a business like a business. It’s not a charity, it’s not government owned neither is it an NGO. From the moment covid-19 began to show its real impact, I was expecting job cuts to come fast and hot especially in the travel industry. A business has to do what is necessary to ensure their survival and heck to ensure they come out of the virus even stronger than they went in because that is the job of management. It doesn’t matter how much the airline made in the past, in this kind of crisis it is rather irrelevant because you’ll burn it much faster than you made it.

  This virus is going to change this industry forever, it’s not 9/11, its not SARS. This is 10 times worse.

  For BALPA to say they’re shocked is a bit naive I think. Not needing government aid does not equate to not making cuts. When has the industry ever experienced a thing like this? Blame the virus don’t blame the company for making hard but necessary decisions.

  If you remove the emotion from this whole thing (which is not normal I know) what BA is doing is actually logical.

  What would you have management tell the board? Sorry we are burning cash because I can’t sack my staff? well they’ll remove you and get someone who can.

  Why isn’t Lufthansa getting heat for saying they’re looking to get rid of 10,000 jobs?

  • Novice says:

    2 May2 May 23:23

    Another thing ppl don’t seem to understand is, expecting government to save all businesses isn’t right either. The fact that all this money is being printed/loaned, how do you all ‘wise’ (🙄) ppl think the government is going to ever balance the book?

    Even if you don’t know Economics, it’s common sense. Do you want your kids and grandkids to spend their life paying the government high taxes or whatever scheme they will come up with to balance the books? How do you think it got so bad that food banks and homelessness and poverty increased? Haven’t y’all already been here before?

    • Novice says:

      2 May2 May 23:35

      @opus I agree. In business there is no room for emotions. I know in an ideal world it would be nice that everyone could have good conditions/pay etc. But this isn’t that world.

      And yes I have sympathy for ppl who are experiencing hardships but it’s happening everywhere. What makes one group of employees so special. Before anyone says about the employee loyalty (which everyone here has been going on about every day). Nobody told anyone to be loyal to a job.

      Here lies the biggest truth, ppl can’t admit nor accept that where they wasted their loyalty and life, didn’t turn out to be the right decision.

      It’s a bit like just imagine me having a go at ppl for not buying my books one month when money is tight. Well nobody forced me to become a writer. It was my own choice. So everyone should accept that you mk ur bed so lie in it.

      It’s just logical and business, nothing personal.

      And everyone here is just going on about it because we are basically stakeholders via points etc.

      • Opuada says:

        3 May3 May 00:20

        Not in this industry let me tell you. This isn’t apple or google where you see operating margins of 20-25%. Any airline that pays their staff “well’ is government backed. the margins in this industry are extremely low, so one has to give. So I don’t know which other companies you’re talking about, because if they’re not an airline then its irrelevant.

      • Novice says:

        3 May3 May 00:22

        Actually I have also stated I have studied business. I’m not a teenager. I always bang on about being young because it’s like an ironic statement because I can’t believe what some of people comment and as I already said in my naivety yrs ago I believed old people are wise.

        I am confident in my statements because i am really well-read. I go with the facts and I’m a logical person.

      • Novice says:

        3 May3 May 00:42

        @shoestringo, reading economist, FT was basically part of uni syllabus for me. I actually meant I’m well-read in a lot of different topics so may come across as too logical and worldly. I have interest in history, law and other stuff too. @J said I should read up so was just pointing that out.

    • Novice says:

      2 May2 May 23:42

      Agree @shoestringo. It’s pathetic. I have always alluded to my age because in honesty I was brought up to believe old ppl are wise but sure as hell doesn’t seem like it here.

      It’s same with the climate change thing. Future generations will suffer for that too because of the selfishness of ppl now. I don’t want kids and I’m grateful every day that I won’t need to. Because why bring any kid into such a world 🌍

      • Rob says:

        3 May3 May 10:23

        You’re behind the times. This is a 1970’s mindset. Look at the data NOW. Only a handful of countries are still running at 5+ children per family.

        Look at this for example for India – https://www.macrotrends.net/countries/IND/india/birth-rate During my lifetime is has dropped from 39 births per year per 1000 people to 17. This is lower than Morocco, Egypt etc. It continues to decline year on year.

    • Novice says:

      3 May3 May 00:06

      Key workers should be paid more. If you read all my comments you will understand what I mean @J

      And @Shoestringo, humanity’s biggest flaw is they can’t take the truth.

      Covid 19 is bad but tbh it hasn’t even killed enough ppl worldwide to wipe out a single day’s births. And, history shows that ppl have more kids when faced with uncertainty (despite having no logic to why they should) so I fear we might be heading to 8 billion way before 2035…

  • Opuada says:

    3 May3 May 00:00

    Fair enough on that! I was speaking generally in the media not so much on this blog. But then again i live in the UK so i probably wouldn’t see much of it as you’ve pointed out anyway.

    I still don’t know what makes BA a disgrace? they’re one of the most efficient run airlines in the world. and it shows in the numbers and their ability to withstand a heavy crisis like this. At least they are not asking for state bailout like LH? at least yet.

    So BA is a disgrace because it’s sacking staff in the middle of a pandemic that’s causing it to burn tens of millions of pounds a day and zero revenue? sacking staff it will not need going into 2021 seeing as the 747s probably aren’t coming back.

    Can someone tell me what they’d have BA rather do that will make economical sense

    • Novice says:

      3 May3 May 00:11

      BA have made a unpopular but sound business decision. In the court of internet opinion they have committed a crime …

      • Opuada says:

        3 May3 May 00:15

        I 100% agree!

    • Briand says:

      3 May3 May 08:51

      It’s certainly not written with an impartial view…which it should have been.

• GaryC says:

  3 May3 May 00:06

  I’m very curious as to Rob’s personal view on this topic, which has understandably caused a lot of heated emotion. The headline suggests he believes that BA are being opportunistic, and using Covid-19 as an ‘excuse’ to make 12000 redundancies. But this seems hard to reconcile, for someone who’s made his own millions in private equity in the City 🙂

  • Novice says:

    3 May3 May 00:14

    Rob is a stakeholder just like all of us. We’re all dishing out our opinions because we all something at stake eg. My future tax burden/ points…

    • Rob says:

      3 May3 May 10:17

      I’m not saying what BA is doing doesn’t make financial sense.

      On the other hand, I have not furloughed my own staff despite the fact that I would save many thousands of pounds per month by doing so.

This article is closed to new posts. Discussion continues in the HfP Forums.