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Virgin Atlantic warns it is functioning out of income

Cabin Crew Member, Natalie Burton prepares a Virgin Atlantic aircraft for the first passenger service after a three month pause due to Covid-19, London Heathrow Airport.Picture copyright
PA Media

Sir Richard Branson’s Virgin Atlantic could run out of cash up coming thirty day period if lenders do not approve a £1.2bn rescue deal, a British isles court has listened to.

The airline is “essentially sound” but a restructuring and refreshing injection of cash is critical to securing its upcoming, Virgin’s attorneys said.

The plans have to have acceptance from lenders underneath a courtroom-sanctioned system.

As component of that system Virgin Atlantic is also looking for defense below chapter 15 of the US individual bankruptcy code.

That enables a international debtor to defend belongings in the nation.

‘Critical levels’

Like other airlines, Virgin Atlantic’s funds have been strike difficult by the collapse in air journey thanks to the pandemic.

Previous thirty day period, the enterprise agreed a rescue offer worth £1.2bn ($1.6bn) to secure its foreseeable future further than the coronavirus crisis.

The court docket in London listened to that the airline’s hard cash move would fall to “critical concentrations” by the center of up coming thirty day period and it would “run out of income altogether” by the week starting 28 September.

David Allison QC, for Virgin Atlantic, explained to Mr Justice Trower in penned submissions that the team had “a basically audio small business design which was not in any problems at all just before the Covid-19 pandemic”.

“Passenger desire has plummeted to a amount that would, till lately, have been unthinkable,” he stated. “As a result of the Covid-19 pandemic, the team is now undergoing a liquidity disaster.”

Mr Allison mentioned that without having a “solvent recapitalisation”, including an injection of new funds, Virgin Atlantic’s administrators would have “no alternative” but to place the organization into administration in mid-September 2020 in buy to wind down the company and promote any belongings, where doable.

He reported the restructuring needed to be sanctioned by early September. Mr Justice Trower gave the go-ahead for a assembly of collectors on 25 August.

In a linked procedural move, Virgin Atlantic submitted for US bankruptcy safety, indicating it had negotiated a deal with stakeholders “for a consensual recapitalization” that will get credit card debt off its equilibrium sheet and “quickly placement it for sustainable prolonged-time period growth”.

Virgin Atlantic stated in a statement on Wednesday that it carries on to operate its constrained flight routine, adding: “With guidance now secured from the the greater part of stakeholders, it is really anticipated that the Restructuring Plan and recapitalisation will appear into influence in September. We stay self-confident in the prepare.”

Under the airline’s restructuring approach, Sir Richard’s Virgin Group will inject £200m, with further money supplied by traders and lenders.

The billionaire Virgin boss experienced a ask for for United kingdom federal government funds rejected, leaving the airline in a race towards time to safe new investment.

In Might, Virgin Atlantic, which is 51% owned by Virgin Team and 49% by US airline Delta, declared that it would lower extra than 3,000 employment in the Uk and near its operation at Gatwick airport.

Virgin Australia cuts

In the meantime, Virgin Australia’s new operator, the US private equity group Bain Capital, stated it will minimize 3,000 careers, which is about a third of the airline’s workforce.

The turnaround plan for Australia’s second major airline will also see it retire the spending budget brand Tigerair.

“Working with Bain Capital, we will speed up our system to provide a solid future in a complicated domestic and world aviation current market,” Virgin Australia’s main executive Paul Scurrah stated.

Media playback is unsupported on your gadget

Media captionA Virgin Australia flight attendant states goodbye on a closing worldwide flight

In April, Virgin Australia went into voluntary administration, creating it Australia’s initially huge corporate casualty of the coronavirus pandemic.

The next month it was bought by Bain Cash, which said it supported the airline’s existing management group and its turnaround prepare for the business enterprise.

Bain also promised a “important injection of money” that would assist Virgin Australia recapitalise and retain hundreds of employment.

Carriers all around the earth are battling as they deal with the intense plunge in air journey prompted by the coronavirus pandemic.

The Intercontinental Air Transportation Association warned in June that the slump will generate airline losses of far more than $84bn (£64bn) this yr.

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Boris Johnson warns ‘long, long way to go’ for UK economy

Boris Johnson wearing hi-vis and hard hat flanked by two others wearing the same.Image copyright
Getty Images

Boris Johnson has warned the UK has a “long, long way to go” before the economy improves, after official figures showed the largest drop in employment in over a decade.

“Clearly there are going to be bumpy months ahead and a long, long way to go,” the Prime Minister said.

However, he said parts of the economy were “showing great resilience”.

Between April and June, the number of people in work fell by 220,000, the Office for National Statistics said.

The drop in the number of people employed was the largest quarterly decrease since May to July 2009, the depths of the financial crisis.

Mr Johnson said he had “absolutely no doubt” that government schemes would “help this country get through it”, adding: “it will get through it stronger than ever before”.

The youngest workers, oldest workers and those in manual occupations were the worst hit during the pandemic, the ONS added.

The figures do not include the millions of people who are furloughed, those on zero-hours contracts but not getting shifts, or people on temporary unpaid leave from a job, as they still count as employed.

As such, they do not capture the full impact of the pandemic. Similarly, the UK unemployment rate was estimated at 3.9%, largely unchanged on the year and the previous quarter.

Jonathan Athow, deputy national statistician at the ONS, said: “The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs.

“This is concerning, as it’s harder for these groups to find a new job or get into a job as easily as other workers.”

How bad is this likely to get?

The UK economy has been battered by the coronavirus pandemic, but unemployment has not surged as much as feared because large numbers of firms have furloughed staff.

However, analysts said unemployment was set to worsen in coming months as the scheme wound down, warning of a looming “cliff-edge” and a “lull before the storm”.

From restaurants to retailers, many UK businesses are already planning job cuts with 140,000 redundancies announced in June alone.

According to the ONS, the number of average hours worked continued to fall in April-June, reaching record lows both on the year and on the quarter.

The number of people claiming universal credit – a benefit for those on low pay as well as unemployed people – rose to 2.7 million in July, up by 117% since March.

How does redundancy work?


Redundancy is a way for an employer to reduce their workforce.


Workers who have been continuously employed for two years can be offered a payment to compensate them for losing the job, or an alternative role within the same organisation.


Most workers are entitled to a notice period, and for redundancies of 20 or more people, the employer has to run a consultation with employees to discuss the best way forward.


There are rules to cover how redundancies are undertaken, to make sure that people being made redundant are selected fairly.

What happens after furlough?


The furlough scheme ends on 31 October. After this point, employers will have to decide if they can afford to retain all their existing staff.


If they cannot, they could consider extending the furlough period at the employer’s own expense, without government grants.


Companies sometimes ask staff to agree a temporary pay cut, or reduced hours, as a way to get through difficult trading periods.


However, it is likely that many companies will not be able to retain all their staff when they come back from furlough, and may have to consider making some staff redundant.

Can I get universal credit?


Universal credit is a payment from the government to help people who are on low, or no income.


It includes payments to help with childcare, caring responsibilities, or who can’t work because of sickness or disability.


To claim, you must be under state pension age, living in the UK, and have less than £16,000 in savings.


Some 16- and 17-year-olds can claim, though in most cases claimants have to be 18 or over.

How are ordinary people coping?

Theatre technician Charlotte Baker, 29, is out of work as a result of the coronavirus crisis.

She started a new job at the Fairfield Halls in Croydon in September last year and was furloughed in March.

In June, she was made redundant, even though she could have been kept on furlough.

Now management at the Fairfield Halls has said the venue will not reopen until April next year, forcing her to contemplate a possible career change.

“It’s definitely an uphill struggle and it’s proving harder than previous ones,” she told the BBC. “It’s hard to have a positive outlook.”

Charlotte has been looking into doing a carpentry course, but to obtain the necessary City and Guilds qualification would require her to spend £5,000 on training.

“It’s a mountain to climb. I wouldn’t mind climbing that mountain if it’s something that I’m passionate about, but I’m not sure,” she says.

“I’m hoping to make a decision by the end of August.”

  • Jobless in the pandemic: ‘It’s hard to stay positive’

Media playback is unsupported on your device

Media captionJulie Morris explains what it is like to be job hunting in your late 50s during coronavirus

How is this affecting people who still have jobs?

Between April and June there were falls in pay for those still working, with regular pay levels down 0.2% compared with a year earlier – the first negative pay growth since records began in 2001.

The number of people on zero-hours contracts also increased to more than one million.

“Early indicators for July 2020 suggest that the number of employees in the UK on payrolls is down around 730,000 compared with March 2020,” said the ONS.

It believes the main reason this is more extreme than the fall in employment is because of workers who have a job but are not doing any paid work at the moment.

  • Redundancy: ‘It’s been stressful and upsetting’
  • Which sectors are hiring and which are cutting back?

It added that a large number of people were estimated to be temporarily away from work, including furloughed workers – approximately 7.5 million in June 2020, with more than three million of these being away for three months or more.

The number of workers covered by the furlough scheme has since risen to 9.6 million by 9 August, and has yet to record a fall in any week since it began, separate statistics published on Tuesday by HM Revenue and Customs show.

The ONS said there had also been a sharp fall in the number of self-employed people between April and June.

It said there were 4.76 million self-employed people, 14.5% of all people in employment, a record 238,000 fewer than the previous quarter.

Is it all bad news?

If you’re a glass-half-full sort of person, there is some less than awful news in the latest labour market figures.

The number of vacancies, for example, rose from its record low by 10% in May to July as lockdown restrictions were eased. The number of hours worked saw a record drop in the second quarter from April to June, but in July it was down by only 3%, less than half the fall in May and June.

However, there are some less jolly signs. The number on employer payrolls had only dropped marginally in the previous two months, but saw a much bigger drop in July, down 114,000, in spite of the reopening of many shops, restaurants and pubs.

And employers are increasingly making employees bear the risk that there isn’t enough work for them to do, with the number of zero-hours contracts rising above one million for the first time.

And then there’s the record drop in self-employment. And all this in spite of the government spending more than £40bn trying to protect employment through furlough and self-employed income support.

Unemployment tends to peak well after economic shocks have been and gone: this time will be no different.

What are economists saying?

Ruth Gregory, senior UK economist at Capital Economics, said the latest employment figures were “the lull before the storm”.

She added: “The cracks evident in the latest batch of labour market data are likely to soon turn into a chasm, with the unemployment rate rising from 3.9% to around 7% by mid-2021.”

She said further rises in unemployment in the coming months were “all but inevitable as the furlough scheme unwinds”.

Capital Economics forecasts that the unemployment rate will peak at 7% in mid-2021 and remain above its pre-pandemic level of 4% until the end of 2022.

Ms Gregory said this suggested that the economic recovery would be “slow going”.

UK employment falls by biggest amount in a decade

Jeremy Thomson-Cook, chief economist at Equals Money, said the figures showed the true level of those out of work had been “very effectively lowered by the government’s furlough scheme” and that the worst lay ahead.

“Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages.”

What’s the political reaction?

Chancellor Rishi Sunak said the figures showed that the government’s “unprecedented support measures” were working to “safeguard millions of jobs and livelihoods that could otherwise have been lost”.

Shadow work and pensions secretary Jonathan Reynolds said it was “extremely worrying” that older workers, the self-employed and part-time workers had been hit hardest.

“Labour has repeatedly warned the government their one-size-fits-all approach will lead to job losses. These figures confirm what we feared – Britain is in the midst of a jobs crisis.”


Have you lost your job because of the pandemic? Please share your experiences by emailing

Please include a contact number if you are willing to speak to a BBC journalist.

  • WhatsApp: +44 7756 165803
  • Tweet: @BBC_HaveYourSay
  • Please read our terms & conditions and privacy policy

Categories
Uncategorized

Boris Johnson warns ‘long, long way to go’ for UK economy

Boris Johnson wearing hi-vis and hard hat flanked by two others wearing the same.Image copyright
Getty Images

Boris Johnson has warned the UK has a “long, long way to go” before the economy improves, after official figures showed the largest drop in employment in over a decade.

“Clearly there are going to be bumpy months ahead and a long, long way to go,” the Prime Minister said.

However, he said parts of the economy were “showing great resilience”.

Between April and June, the number of people in work fell by 220,000, the Office for National Statistics said.

The drop in the number of people employed was the largest quarterly decrease since May to July 2009, the depths of the financial crisis.

Mr Johnson said he had “absolutely no doubt” that government schemes would “help this country get through it”, adding: “it will get through it stronger than ever before”.

The youngest workers, oldest workers and those in manual occupations were the worst hit during the pandemic, the ONS added.

The figures do not include the millions of people who are furloughed, those on zero-hours contracts but not getting shifts, or people on temporary unpaid leave from a job, as they still count as employed.

As such, they do not capture the full impact of the pandemic. Similarly, the UK unemployment rate was estimated at 3.9%, largely unchanged on the year and the previous quarter.

Jonathan Athow, deputy national statistician at the ONS, said: “The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs.

“This is concerning, as it’s harder for these groups to find a new job or get into a job as easily as other workers.”

How bad is this likely to get?

The UK economy has been battered by the coronavirus pandemic, but unemployment has not surged as much as feared because large numbers of firms have furloughed staff.

However, analysts said unemployment was set to worsen in coming months as the scheme wound down, warning of a looming “cliff-edge” and a “lull before the storm”.

From restaurants to retailers, many UK businesses are already planning job cuts with 140,000 redundancies announced in June alone.

According to the ONS, the number of average hours worked continued to fall in April-June, reaching record lows both on the year and on the quarter.

The number of people claiming universal credit – a benefit for those on low pay as well as unemployed people – rose to 2.7 million in July, up by 117% since March.

How does redundancy work?


Redundancy is a way for an employer to reduce their workforce.


Workers who have been continuously employed for two years can be offered a payment to compensate them for losing the job, or an alternative role within the same organisation.


Most workers are entitled to a notice period, and for redundancies of 20 or more people, the employer has to run a consultation with employees to discuss the best way forward.


There are rules to cover how redundancies are undertaken, to make sure that people being made redundant are selected fairly.

What happens after furlough?


The furlough scheme ends on 31 October. After this point, employers will have to decide if they can afford to retain all their existing staff.


If they cannot, they could consider extending the furlough period at the employer’s own expense, without government grants.


Companies sometimes ask staff to agree a temporary pay cut, or reduced hours, as a way to get through difficult trading periods.


However, it is likely that many companies will not be able to retain all their staff when they come back from furlough, and may have to consider making some staff redundant.

Can I get universal credit?


Universal credit is a payment from the government to help people who are on low, or no income.


It includes payments to help with childcare, caring responsibilities, or who can’t work because of sickness or disability.


To claim, you must be under state pension age, living in the UK, and have less than £16,000 in savings.


Some 16- and 17-year-olds can claim, though in most cases claimants have to be 18 or over.

How are ordinary people coping?

Theatre technician Charlotte Baker, 29, is out of work as a result of the coronavirus crisis.

She started a new job at the Fairfield Halls in Croydon in September last year and was furloughed in March.

In June, she was made redundant, even though she could have been kept on furlough.

Now management at the Fairfield Halls has said the venue will not reopen until April next year, forcing her to contemplate a possible career change.

“It’s definitely an uphill struggle and it’s proving harder than previous ones,” she told the BBC. “It’s hard to have a positive outlook.”

Charlotte has been looking into doing a carpentry course, but to obtain the necessary City and Guilds qualification would require her to spend £5,000 on training.

“It’s a mountain to climb. I wouldn’t mind climbing that mountain if it’s something that I’m passionate about, but I’m not sure,” she says.

“I’m hoping to make a decision by the end of August.”

  • Jobless in the pandemic: ‘It’s hard to stay positive’

Media playback is unsupported on your device

Media captionJulie Morris explains what it is like to be job hunting in your late 50s during coronavirus

How is this affecting people who still have jobs?

Between April and June there were falls in pay for those still working, with regular pay levels down 0.2% compared with a year earlier – the first negative pay growth since records began in 2001.

The number of people on zero-hours contracts also increased to more than one million.

“Early indicators for July 2020 suggest that the number of employees in the UK on payrolls is down around 730,000 compared with March 2020,” said the ONS.

It believes the main reason this is more extreme than the fall in employment is because of workers who have a job but are not doing any paid work at the moment.

  • Redundancy: ‘It’s been stressful and upsetting’
  • Which sectors are hiring and which are cutting back?

It added that a large number of people were estimated to be temporarily away from work, including furloughed workers – approximately 7.5 million in June 2020, with more than three million of these being away for three months or more.

The number of workers covered by the furlough scheme has since risen to 9.6 million by 9 August, and has yet to record a fall in any week since it began, separate statistics published on Tuesday by HM Revenue and Customs show.

The ONS said there had also been a sharp fall in the number of self-employed people between April and June.

It said there were 4.76 million self-employed people, 14.5% of all people in employment, a record 238,000 fewer than the previous quarter.

Is it all bad news?

If you’re a glass-half-full sort of person, there is some less than awful news in the latest labour market figures.

The number of vacancies, for example, rose from its record low by 10% in May to July as lockdown restrictions were eased. The number of hours worked saw a record drop in the second quarter from April to June, but in July it was down by only 3%, less than half the fall in May and June.

However, there are some less jolly signs. The number on employer payrolls had only dropped marginally in the previous two months, but saw a much bigger drop in July, down 114,000, in spite of the reopening of many shops, restaurants and pubs.

And employers are increasingly making employees bear the risk that there isn’t enough work for them to do, with the number of zero-hours contracts rising above one million for the first time.

And then there’s the record drop in self-employment. And all this in spite of the government spending more than £40bn trying to protect employment through furlough and self-employed income support.

Unemployment tends to peak well after economic shocks have been and gone: this time will be no different.

What are economists saying?

Ruth Gregory, senior UK economist at Capital Economics, said the latest employment figures were “the lull before the storm”.

She added: “The cracks evident in the latest batch of labour market data are likely to soon turn into a chasm, with the unemployment rate rising from 3.9% to around 7% by mid-2021.”

She said further rises in unemployment in the coming months were “all but inevitable as the furlough scheme unwinds”.

Capital Economics forecasts that the unemployment rate will peak at 7% in mid-2021 and remain above its pre-pandemic level of 4% until the end of 2022.

Ms Gregory said this suggested that the economic recovery would be “slow going”.

UK employment falls by biggest amount in a decade

Jeremy Thomson-Cook, chief economist at Equals Money, said the figures showed the true level of those out of work had been “very effectively lowered by the government’s furlough scheme” and that the worst lay ahead.

“Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages.”

What’s the political reaction?

Chancellor Rishi Sunak said the figures showed that the government’s “unprecedented support measures” were working to “safeguard millions of jobs and livelihoods that could otherwise have been lost”.

Shadow work and pensions secretary Jonathan Reynolds said it was “extremely worrying” that older workers, the self-employed and part-time workers had been hit hardest.

“Labour has repeatedly warned the government their one-size-fits-all approach will lead to job losses. These figures confirm what we feared – Britain is in the midst of a jobs crisis.”


Have you lost your job because of the pandemic? Please share your experiences by emailing

Please include a contact number if you are willing to speak to a BBC journalist.

  • WhatsApp: +44 7756 165803
  • Tweet: @BBC_HaveYourSay
  • Please read our terms & conditions and privacy policy