Earlier this week, Richard Branson’s Virgin Australia, the Australian airline launched in 2000, entered voluntary administration, which is similar to bankruptcy in the U.S.
Despite cost-cutting measures taken since the onset of the coronavirus pandemic, including eight weeks of unpaid leave for employees, the airline is in trouble. According to Branson’s open letters to the entire company, he’s committed to bringing Virgin through these challenging times without cutting jobs. In putting his money where his mouth is, Branson is offering Necker Island — his private British Virgin Island — as collateral to help raise as money to fund the struggling company.
Branson owns the 74-acre island, which operates as a resort that can accommodate up to 30 guests.
Commercial airlines could take a hit as high as $113 billion due to lost businesses from COVID-19. So far, three regional airlines have gone out of business, including U.K.-based Flybe, a Virgin subsidiary.
The island could be a key asset in Branson’s efforts to secure a $621 million loan from the British government, which he states would not be free money and would be paid back.
Branson closed his company letter by stating, "This is not the end for Virgin Australia and its unique culture. I want to assure all of you — and our competitors — that we are determined to see Virgin Australia back up and running soon."