Richard Branson predicts failure of major US airline

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Sir Richard Branson, founder of Virgin Atlantic Airlines, is warning that a major US airline could fail this year due to the impact of the recession.

He has called this year “the worst in the history of aviation”, owing to the combined effect of high oil prices and the global economic downturn.

Branson noted that Virgin Atlantic would not be seeing a repeat of last year’s pre-tax profits of over £60 million this year, stressing that trading in the business travel sector was especially difficult.

“We are having to batten down the hatches but relatively we will do better than most,” Sir Richard said to TravelMole recently, in comments prior to the 25th anniversary of the airline later this month.

He remains “absolutely confident” that Virgin Atlantic will still be around for a 50th anniversary celebration, provided regulators provide protection against mergers on transatlantic routes such as that proposed by American Airlines and British Airways.

Sir Richard noted that some of the large US carriers are currently “weak”, predicting: “Within 12 months, I would not be surprised if a big American carrier didn’t go.”

Branson added: “Oil prices have suddenly doubled – that’s a massive burden on the industry. In a recession you would normally have low oil prices; that is not the case this time.”

Thanks to www.travelmole.com for the above quotes, for more information on this article please visit their website.

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