Sir Richard Branson’s Virgin Group is to fund Australian budget airline Virgin Blue through its financial woes. The carrier has admitted to fears of full-year losses
The Virgin Group, who own 25.5 per cent of Virgin Blue, has committed to buying 305 million further shares in the company. Branson aims to inject £40m to help out the carrier, which is predicting losses of over £80m for this financial year.
Whilst Virgin Blue, Australia’s second-largest airline, continues to make profits from its short-haul flights, where their market share has increased to 30 per cent, their long-haul wing, V Australia has been hit hard by the recession, making massive losses.
In an attempt to raise capital, the airline has also released heavily discounted shares, raising $133 million (AUD) so far from institutional investors, with an additional $98 million expected from retail investors.
