As the coronavirus pandemic continues to devastate the global travel industry, British billionaire Richard Branson‘s Virgin Group, whose business sprawls across cruises, hotels, airlines and trains, is being devastated from all angles. Increasingly, its long-shot space tourism and hyperloop businesses represent its last shreds of hope.
Last week, Virgin’s flagship airline, Virgin Atlantic, filed for bankruptcy protection in the U.S. as the company raced to secure a $1.5 billion restructuring plan to maintain solvency. The airline has resumed passenger flight after months of service suspension due to COVID-19, but it doesn’t expect to turn a profit again until 2022.
Three months earlier, Virgin Atlantic’s sister company, Virgin Australia, declared insolvency in Australia. The airline is currently undergoing a restructuring under its new private equity owner, Bain Capital.
Altogether, the two airlines have laid off more than 6,500 employees since the coronavirus’ financial impact set in. Virgin Atlantic has closed its base at London’s Gatwick airport. And Virgin Australia is shutting down its low-cost carrier, Tigerair Australia.
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This past weekend, Virgin Group’s U.S. train deal, which seeks to splash the Virgin logo on to Florida rail operator Brightline Trains, fell apart after Brightline announced that its rail lines in California and Florida would not be rebranded Virgin Trains USA, without citing any reasons. Brightline operates a 70-mile rail line between Miami and West Palm Beach. The company has multiple extensions and groundbreaking projects underway in Florida, California and Nevada, but existing passenger service has been suspended since March because of COVID-19.
The last Virgin business standing? Its two prototype-stage startups: space tourism company Virgin Galactic (SPCE) and high-speed tunnel company Virgin Hyperloop One.
Virgin Galactic, publicly traded under its own name, is in the final countdown to flying the first customer into suborbital space. Its stock has, by and large, been a success since its IPO last October. The company has secured 600 reservations for its $250,000 per seat space ride, which represents over $150 million in potential revenue. Sensing rising demand, the company plans to raise the price for future tickets.
Virgin Hyperloop One’s financial situation is less clear due to its private status. For the past three years, the company has been testing its high-speed “tube” transportation system in the desert in Nevada. Last month, the U.S. Department of Transportation issued a guidance document to establish regulations for hyperloop, making it the first government agency in the world to draw up regulations for such systems.
