LGWClosedAgain

I don't really like Mr. Branson or his businesses/brands.

Having said that, what someone is 'worth' and the amount of money they actually have or have access to is usually worlds apart.

To put it in layman's terms, someone earning a normal wage in London who purchased their house in the 90's and has paid their mortgage off now has a 'worth' of £1.3M. How much cash do they have access to? Probably no more than £100K.

Mr. Branson putting in £200M out of his £4B 'worth' is not a small amount of cash and at a time like this, it would be very difficult to get credit on a lot of what his 'worth' is tied up in. There is going to be a huge debt problem moving forwards and lenders aren't going to give cents on the dollar for much of the assets he owns.

BA or bust

Minor point (from someone who currently has too much time on their hands... ). Pooh is a small bear and Poo is... well I think you were referring to something smelly perhaps?

AJA_

if IAG does indeed have the resources to avoid a bailout then it should not take any government cash. I recall neither HSBC nor Barclays Bank took government funds in the 2008 financial crisis despite being offered the safety net.

Given the reluctance to refund cash and forcing people to take vouchers for cancelled flights and disabling the ability to get a cash refund online makes me think BA /IAG is not in as good a position as they would have us believe.

Remembering that 99.9% of the time we pay in advance for our flights what BA's actions have shown is that cash received for future flights is not set aside to fund the flight we actually fly. It is used to fund current operations and future bookings by other passengers pay for our actual flight. If that were not the case then BA would have a bank balance equal to all the future flights booked plus current reserves. That should be a very large figure.

It is for this reason that credit card suppliers withhold a large chunk of airline ticket sales from the airlines as a provision against their joint liability to the customer for airline failure to provide the promised service.(s75 of the UK Consumer Credit Act).

13901

My only worry for IAG not wanting help from the government is that it might in whatever way, shape or form prevent employees from getting a helping hand from the taxpayer. I'm pretty damn sure that, in IAG or BA, this is seen as an opportunity. If I was a Worldwide/EF crew, an A6 (or higher) airport employee, a Technician (the grade that sits between Mech and LAE) or anyone on a "legacy" contract I'd have a bullseye on my back. My concern is that BA/IAG don't want help from the taxpayer to, effectively, cull most if not all legacy staff and pocket the savings.

krispy84

Im not sure if the above is what you thought happened or if you’re using it as an example for others, but it is a gross misstatement of how a large corporate manages their cash flow. In the same vein, my parents NI contributions from 40 years ago weren’t kept in a ring-fenced account to pay their state pension today.

FlyerTalker39574

Big business continually looks at cutting its labour costs, if there’s an opportunity they’ll take it, irrespective of the circumstances.

Tiger_lily

Having read his autobiography a few years ago, I seem to recall that Mike Oldfield’s Tubular Bells pretty much bankrolled Virgin for many years right up to the start of the airline.

I really rather doubt that SRB has £4bn in any sort of form that he could liquidise within days.

southlondonphil

Part of his calculated net worth is, of course, based upon the perceived market value of his stake in the airline.

milkyway88

Based on this the question will be, is IAG strong enough to survive on it's own (HSBC style) or does it need to do the Barclays route of taking some middle eastern money?

jonas123

it all depends on how long this lasts for. If people start booking again in 3 months time, it can probably ride it out with the cash it has. However if it goes on for a protracted period of time, I don't think any airline could survive with the level of fixed costs they have.

Schemes like the government's job retention scheme should help, as they could in theory shift the majority of cabin crew wages and others onto the government for a couple of months.

jonas123

A few years late, but maybe WW was right...(however I think WW would shed a tear to see an adversary fail in this way)

https://www.theguardian.com/business...-walsh-on-hold

southlondonphil

Fixed that for you

IAG's largest shareholder is QR

jonas123

I don't think IAG have taken any money directly from QR or am i mistaken?

QR bought their shares on the open market, so you could argue QR have taken money from IAG through dividends

Confus

Mike Oldfield’s Tubular Bells have bankrolled the entire Virgin empire right up to the present day... none of it would have happened without them.

Tiger_lily

And no doubt the perceived value of Necker Island