O'Leary has been saying this for a long time!
Branson: Airlines could go bust
Karl West and Ray Massey, Daily Mail
23 June 2009, 7:54am
Virgin Atlantic supremo Sir Richard Branson gave the gloomiest warning yet about the state of the airline business, predicting that a major operator could soon go bust.
Branson: His comments provoked a fall in the BA share price yesterday.
His stark prediction comes just a day after he riled British Airways by saying the ailing flag-carrier should not be rescued by the Government.
BA insisted it has not asked for a bailout, and does not need one. A spokesman said: 'The whole scenario is complete fantasy.'
Sir Richard said BA had brought the matter on itself when chief executive Willie Walsh said that BA was in a 'fight for survival', and asked staff to work without pay for a month.
The Virgin boss said: 'Loss-making and inefficient airlines should be allowed to go the wall, no matter how big or prestigious they were. The government should not intervene to stop companies going bust. Big inefficient companies which have let their overheads grow should not necessarily survive for ever.
'If they do disappear it will allow new and more efficient companies to take their place... As old trees come down, new saplings start growing.'
Transport secretary Lord Adonis insisted there had been no contact with BA about a rescue.
And he was adamant that the government, which has its own problems managing the country's parlous finances, would not rescue ailing airlines.
He said: 'We are not in the business of giving bailouts. Nor would the public expect us to. We don't see any public interest to be served by giving public subsidy.'
The speculation took place as rumours emerged that BA (down 11.8p, or 8.6%, at 124.6p) has clashed with its pension trustees over a higher-risk investment strategy that it believes has hammered its final salary schemes.
BA's pension deficit is likely to have ballooned from £1.7bn to about £3bn, and the group has hinted it may have to close its final salary retirement schemes.
There has been concern about BA's financial stability since it reported a record annual loss of £401m last month. Walsh has added to the uncertainty by asking staff to work for free.
In the latest edition of in-house newspaper BA News, Walsh said its cash position would be an important factor in helping it through the downturn.
He said: 'Cash is king. Cash gives us time and time gives us options. If we run out of cash, we run out of time and we run out of options.'
BA had a cash balance of just under £1.4bn at the end of March, when it was burning through this at a rate of about £2.7m a day.
It is thought the rate of cash usage has slowed since then.
Karl West and Ray Massey, Daily Mail
23 June 2009, 7:54am
Virgin Atlantic supremo Sir Richard Branson gave the gloomiest warning yet about the state of the airline business, predicting that a major operator could soon go bust.
Branson: His comments provoked a fall in the BA share price yesterday.
His stark prediction comes just a day after he riled British Airways by saying the ailing flag-carrier should not be rescued by the Government.
BA insisted it has not asked for a bailout, and does not need one. A spokesman said: 'The whole scenario is complete fantasy.'
Sir Richard said BA had brought the matter on itself when chief executive Willie Walsh said that BA was in a 'fight for survival', and asked staff to work without pay for a month.
The Virgin boss said: 'Loss-making and inefficient airlines should be allowed to go the wall, no matter how big or prestigious they were. The government should not intervene to stop companies going bust. Big inefficient companies which have let their overheads grow should not necessarily survive for ever.
'If they do disappear it will allow new and more efficient companies to take their place... As old trees come down, new saplings start growing.'
Transport secretary Lord Adonis insisted there had been no contact with BA about a rescue.
And he was adamant that the government, which has its own problems managing the country's parlous finances, would not rescue ailing airlines.
He said: 'We are not in the business of giving bailouts. Nor would the public expect us to. We don't see any public interest to be served by giving public subsidy.'
The speculation took place as rumours emerged that BA (down 11.8p, or 8.6%, at 124.6p) has clashed with its pension trustees over a higher-risk investment strategy that it believes has hammered its final salary schemes.
BA's pension deficit is likely to have ballooned from £1.7bn to about £3bn, and the group has hinted it may have to close its final salary retirement schemes.
There has been concern about BA's financial stability since it reported a record annual loss of £401m last month. Walsh has added to the uncertainty by asking staff to work for free.
In the latest edition of in-house newspaper BA News, Walsh said its cash position would be an important factor in helping it through the downturn.
He said: 'Cash is king. Cash gives us time and time gives us options. If we run out of cash, we run out of time and we run out of options.'
BA had a cash balance of just under £1.4bn at the end of March, when it was burning through this at a rate of about £2.7m a day.
It is thought the rate of cash usage has slowed since then.
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