Virgin Atlantic is the flagship business within Sir Richard Branson's Virgin Group. It is the UK's second largest long-haul carrier behind British Airways, although it is considerably smaller than its rival, carrying around 5m passengers a year, compared to BA's 35m. Although widely identified with Branson himself it has in effect been a joint venture since 2000, when Singapore Airlines acquired a 49% shareholding. The airline's reputation as a challenger brand was established in the 1990s by a bitter public relations battle with British Airways, in which Virgin was able to demonstrate that the national carrier had mounted a behind-the-scenes campaign to destabilise the new upstart. The resulting publicity secured Virgin Atlantic's future. The Virgin Group has diversified since then, establishing separate short-haul airlines in Australia, Africa and the US, all as partnerships with other companies (and several of which have since been acquired). Meanwhile, competition in the long-haul sector has remained challenging for Virgin Atlantic. At the end of 2012, Delta Air Lines of the US agreed to acquire Singapore Airlines' 49% stake, drawing Virgin into its SkyTeam alliance with Air France-KLM. The latter announced plans in 2017 to acquire an additional 31% stake, a move that would have left Branson with just 20% of equity. However, that plan was eventually abandoned at the end of 2019, and Branson retains 51%. Early in 2020 the three partners unveiled a formal joint venture, pooling transatlantic revenues and costs. A few months later the coronavirus pandemic precipitated a new crisis for Virgin Atlantic. With all passenger flights grounded, Virgin sought but was refused financial assistance from the UK government. After weeks of negotiations, the airline secured £1.2bn of emergency funding. Shai Weiss is CEO of Virgin Atlantic. Virgin Group also has investments in airlines in other markets. (Virgin Australia went into administration in 2020 and was acquired by private equity group Bain Capital). The group is also continuing to pursue a long-held dream to launch commercial space travel under the Virgin Galactic banner.
Capsule checked 15th July 2020
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Adbrands Daily Update 14th Jul 2020: Virgin Atlantic secured the equivalent of £1.2bn in short-term bailout funding to prevent a financial collapse provoked by the coronavirus pandemic. The airline has secured £470m of new funding, including £200m from Virgin Group. The remainder has come from extended credit from shareholders and creditors. Virgin and Delta Air Lines have agreed to defer £400m of fee payments: Virgin Atlantic pays a hefty annual fee to Virgin Group for use of the Virgin name; Delta charges for use of its booking system. In addition, creditors including Atlantic's aircraft lessors have postponed payments worth a further £450m.
Adbrands Daily Update 9th Jul 2019: Sir Richard Branson is to sell a 49% holding in his space tourism vehicle Virgin Galactic to a publicly traded shell company owned by venture capital firm Social Capital. The latter's founder Chamath Palihapitiya, a former Facebook executive, would be chairman of the resulting entity, which would be the first quoted spaceflight company. Social Capital is expected to invest $800m for its stake in the business.
Adbrands Daily Update 15th Jan 2019: Virgin Atlantic teamed up with delivery group Stobart and investment firm Cyrus to rescue failing UK regional airline Flybe for a rock-bottom price of £2.8m. Under the banner of joint venture Connect Airways, the consortium is offering to inject £100m of working capital into the struggling carrier, which would be used to feed passengers into Virgin Atlantic's network and that of its international partners Delta Air Lines and Air France KLM.
Adbrands Weekly Update 20th Sep 2018: Ads of the Week: "Depart the Everyday". Here's the debut spot from AMV BBDO for Virgin Atlantic, now more or less officially a unit of Delta Airlines and Air France, despite the Virgin brand. (Branson now has only a 20% stake in the business). It's really nice, and in all honesty superior to that last business-oriented film a couple of years back from Adam&Eve DDB voiced by Andy Serkis. That one actually made us tense not elated, whereas this is pure pleasure.
Adbrands Weekly Update 3rd Aug 2017: Sir Richard Branson is to surrender majority control of the Virgin Atlantic airline as part of a wide-ranging strengthening of its existing Transatlantic alliance with Delta Airlines of the US and Air France-KLM. Delta already has a 49% stake in the company, acquired from Singapore Airlines in 2014. Now Air France-KLM will purchase a 31% stake from Branson for around £220m. Virgin Group will retain the remaining 20%. At the same time, Delta and its Asian partner China Eastern Airlines will each acquire a 10% holding in Air France-KLM. Branson said Virgin Atlantic will continue to fly under its current name.
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