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closely with [European aviation safety agency] EASA. We will look to have the middle seats empty at the start. Customers will want to see that, particularly in the start-up period. Customers will go through a process in their own minds as they see a relaxation and going on holiday will be on their minds again. “As we start flying it’s safe

to assume we won’t see load factors at normal levels. There won’t be the need for normal turnarounds and that will help social distancing.” He added: “We have an

estimated lead time for restarting [flights] of two weeks.” EasyJet revealed two new

loans worth £400 million last week, taking its total cash balance to £3.3 billion, leading Lundgren to report: “We’re in a position to remain cash positive even if grounded for nine months.” The carrier also reported

more than half its passengers have accepted vouchers or rebooked rather than seek refunds for cancelled flights since the onset of travel restrictions. Lundgren declined to say

how much the carrier had paid out in refunds, or how much had been repaid to agents. But he said: “We’re one of the few airlines in Europe processing refunds, [although] there is a longer waiting time than normal because of the numbers.” Asked about the level of

demand, Lundgren said: “We’re taking bookings from the end of May. Of course, bookings are down. But winter 2020-21 sales are up significantly on this time last year. We’re not disclosing the proportion of rebookings and new bookings, but there is demand and we’re quite positive about bookings for winter.”

Debt-laden Virgin Australia falls into administration

Virgin Australia went into voluntary administration on Tuesday after failing to secure a government loan. Chief executive Paul Scurrah

said Australia’s second-biggest carrier would seek new owners, insisting: “We are determined to keep flying.” Virgin Australia had sought a government-secured loan of

34 23 APRIL 2020

Treasury tells Virgin to exhaust funding options

Ian Taylor

Virgin Atlantic has been told to resubmit a £500 million bid for state aid amid reports the Treasury was “unimpressed” by the carrier’s request for funding. The carrier sought £500 million

from the government, split between a commercial loan and a credit guaran- tee, in a bid submitted in early April. The Financial Times quoted an

unnamed source who said the airline had not done enough to convince the Treasury it had explored other funding options. Chancellor Rishi Sunak has

Richard Branson: ‘We will need government support’

pledged to consider “bespoke support” for individual carriers, but only as a last resort” when they have “exhausted other options”. The chancellor made clear in a

letter to airlines in late March that “taxpayer support would only be possible if all commercial avenues have been fully explored including raising further capital from existing investors”. Travel Weekly reported last week

that senior Virgin Atlantic figures expected a speedy decision on their appeal. But those hopes were almost immediately quashed as it emerged the government had hired Wall Street

bank Morgan Stanley to examine the case for state aid alongside investment bank Rothschild and accountancy giant EY. Ministers reportedly remain

concerned at the public reaction to rescuing a carrier jointly owned by the billionaire Sir Richard Branson and Delta Air Lines, which reported a $4.8 billion post-tax profit for 2019. Branson’s Virgin Group owns 51%

of Virgin Atlantic and Delta 49%. In an open letter to Virgin staff on

Monday, Branson said: “We will do everything we can to keep the airline going, but we will need government support to achieve that.” He insisted: “It wouldn’t be

free money. This would be in the form of a commercial loan.” In a statement, Virgin Atlantic said: “We are exploring all available options to obtain additional external funding.” The carrier now expects any

decision on aid to be several weeks away. However, a source insisted: “Virgin Atlantic can weather the storm longer into the year.”

A$1.4 billion ($884 million), which was turned down last week. Australian treasurer (chancellor)

Josh Frydenberg said the Australian government was “not in the business of owning an airline”. However, the government had

agreed to pay A$165 million to Qantas and Virgin Australia to maintain key routes through the Covid-19 crisis. The government had also agreed to waive A$715 million in airline fees and charges. The decision to file for

administration followed a board meeting on Monday. Virgin Australia has a debt of A$5 billion

Virgin Australia

and had already laid off 8,000 staff. Virgin Group retains a stake

of just over 10% in the carrier, with Etihad Airlines holding 21%, Singapore Airlines 20%, and Chinese airline groups Nanshan and HNA owning 20% a piece.

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