Richard Branson Will Use His Private Island as Collateral
In wake of criticism, the Virgin Group founder outlines his personal pitch to save his airlines
As noted last week, Richard Branson was asking for loans and government help for his various Virgin companies due to the ongoing economic crisis caused by the coronavirus pandemic. Some industry leaders supported the help, but the billionaire entrepreneur faced some backlash, given his own personal wealth and the fact that he was staying at his private estate in the British Virgin Islands, where he pays no personal income tax.
In a new open letter to employees, Branson has countered the criticism with some more detailed explanations on what his companies need and his own economic situation. Most importantly, he’s pledged to “raise as much money against the island as possible to save as many jobs as possible around the [Virgin] Group.”
— Virgin (@Virgin) April 20, 2020
Besides putting his Necker Island home up as collateral, Branson discussed why the Virgin Group is looking for a government loan (“it wouldn’t be free money and the airline would pay it back”) and points out what the potential loss of Virgin Australia would mean for the airline industry (“If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies”).
“Over the five decades I have been in business, this is the most challenging time we have ever faced,” Branson writes. “We are operating in many of the hardest hit sectors, including aviation, leisure, hotels and cruises, and we have more than 70,000 people in 35 countries working in Virgin companies.”
As Branson explains, the company’s already committed a quarter of a billion dollars to help the businesses. He also defends himself from articles that have pointed out his own fortune: “I’ve seen lots of comments about my net worth – but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw.” He also points out that the wage reduction taken by Virgin Atlantic employees was a “virtually unanimous decision made by Virgin Atlantic employees and their unions.”
And finally, Branson points out that two of his subsidiaries, Virgin Care and Virgin Money Giving, do not operate as profit-making ventures.
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