Richard Branson urges Government not to bail out British Airways

| June 21, 2009 | 0 Comments

Sir Richard Branson, founder of Virgin Atlantic, is urging ministers not to step in and bail out British Airways (BA).

BA, along with many other airlines, has been struggling amid the economic downturn which put many airlines out of business last year.

Earlier this month, BA admitted it was fighting for survival and asked 40,000 members of staff to work for nothing in a bid to cut costs.

The group’s chief executive, Willie Walsh, has already confirmed he will work for nothing in July - giving up his monthly salary of more than £60,000.

Branson said it would “not be in Britain’s interests” for the Government to contemplate a bail out after declaring that Virgin, along with other airlines, were ready to take on BA’s routes and slots at Heathrow.

However, a spokesperson from BA branded Branson’s comments as “fantasy” and said the company was against Government aid.

Last month, BA reported a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year. The loss represented the biggest since the company was privatised in 1987.

In comparison, at the end of May Virgin reported that it had almost doubled profits. In the 12 months to the end of February, pre-tax profits rose to £68.4 million, compared with the £34.8 million reported a year earlier.

Virgin and BA are big rivals and this intensified last summer after Branson hit out at the possible merger between BA and American Airlines (AA).

Mr Branson wrote a letter to the US Government stating that airlines were struggling with soaring fuel costs but the solution does not lie in an anti-competitive agreement which will ultimately lead to less competition and higher fares.

Meanwhile, it is understood that Mr Walsh refused a request to give evidence to the House of Commons transport committee next week. Mr Walsh was due to report on the future of aviation.

Tags: aid, , bail out, , , ministers, , ,

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