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Virgin Atlantic Airways is drawing up plans for a fresh £400m funding injection as prospects fade for an initial public offering (IPO) of Sir Richard Branson’s flagship company.

Sky News has learnt that the transatlantic carrier is in talks with its shareholders and other financial stakeholders about raising additional capital to see it through the traditionally quieter winter months.

City sources said the amount being sought by Virgin Atlantic’s management was still being finalised, but would inevitably involve Sir Richard contributing another chunk of his fortune to the pandemic-battered airline.

It is expected to be announced by the end of the year.

This week, the Virgin Group tycoon sold $300m of stock in New York-listed Virgin Galactic – bringing the total he has raised from selling shares in the space tourism business during the pandemic to more than $1bn.

Virgin Atlantic has been helped by the recent resumption of flights between the UK and US – the most profitable part of its business – but is braced for a difficult winter amid oil price volatility and other inflationary pressures.

Synchronised flights leave Heathrow
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The double take-off from Heathrow

Earlier this month, it staged a joint take-off from Heathrow with British Airways, a rare sign of collaboration between the bitter rivals, to mark the restart of flights to New York’s John F Kennedy airport.

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Virgin Atlantic lost more than £650m last year as the COVID-19 crisis decimated the global aviation industry, and it expects to have made a further substantial loss in 2021.

Sky News revealed in August that Sir Richard was plotting a surprise listing on the London Stock Exchange as it pinned its hopes on a glut of demand for transatlantic travel.

However, despite positive talks with institutional investors, the need to return to normalised trading patterns has prompted them to shelve the plan indefinitely.

A significant improvement in the airline’s financial performance could yet pave the way for it to be revived, although that is unlikely for at least a year, according to one fund manager who held discussions with the company.

An IPO would have marked the first time since Virgin Atlantic’s launch in 1984 that it has sold shares to the public – and would almost certainly see Sir Richard relinquish overall control of the business.

Virgin Atlantic has sought several rounds of funding since the start of the pandemic, the most notable of which was a £1.2bn solvent rescue package in September last year which included £200m from Sir Richard, a loan from the American hedge fund Davidson Kempner Capital Management, and substantial contributions from creditors.

It has also landed hundreds of millions of pounds more – in multiple instalments – from the sale of several Dreamliner aircraft and a further loan from Virgin Group.

The latest financial injection includes payment deferrals and other creditor assistance as well as cash, according to a City source.

Virgin Atlantic, which is majority-owned by Sir Richard’s Virgin Group, was forced to place administrators on standby last year as the pandemic-induced crisis deepened.

Delta Air Lines owns the remaining 49%, with the company having scrapped a deal in late 2019 that would have seen Air France-KLM acquiring a 31% shareholding from Sir Richard.

Virgin Atlantic has nearly halved its workforce since the start of the pandemic – a move that has helped to drive significant longer-term cost savings.

A Virgin Atlantic Boeing 747-400, with Tail Number G-VROC, lands at San Francisco International Airport, San Francisco
A Virgin Atlantic Boeing 747-400, with Tail Number G-VROC, lands at San Francisco International Airport, San Francisco, California, April 16, 2015. REUTERS/Louis Nastro
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The company has been cushioned by Virgin Galactic’s stock price

The airline is not the only part of Sir Richard’s business empire which has felt the pressure of the pandemic.

The UK arm of Virgin Active also came close to collapse after putting a restructuring deal to landlords, lenders and shareholders.

His Virgin Voyages cruise operation finally embarked on its maiden journey during the summer after more than a year of setbacks.

Nevertheless, the billionaire tycoon has been cushioned by Virgin Galactic’s stock price.

A Virgin Group spokesperson said this week that the latest sale would allow him to support his “portfolio of global leisure, holiday and travel businesses that continue to be affected by the impact of the COVID-19 pandemic, in addition to supporting the development and growth of new and existing businesses”.

In July, Sir Richard flew aboard a Virgin Galactic trip to the edge of space, days before his even-wealthier rival, the Amazon founder Jeff Bezos, did the same on a Blue Origin vehicle.

Sir Richard is now taking Virgin Orbit – the commercial satellite launch group – public through a merger with a US-listed special purpose acquisition company (SPAC).

A Virgin Atlantic spokesman said the airline did not comment on speculation.

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Millions urged to read energy meters this weekend to avoid overpaying as price cap falls again

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Millions urged to read energy meters this weekend to avoid overpaying as price cap falls again

Millions of people are being urged to send meter readings to their energy supplier this weekend to ensure they don’t overpay.

The regulator’s price cap drops 12.3% on Monday 1 April, from a typical £1,928 per year for a dual-fuel household to £1,690 – an average saving of about £20 per month.

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People without a smart meter who are on a standard variable tariff (SVT) should send readings so their company has an up-to-date record when the prices change.

“If you delay submitting your readings, some of your energy usage could end up being charged under the higher rates we’re currently facing,” said Ben Gallizzi, energy spokesman for comparison site Uswitch.

This could happen as firms will estimate usage if they don’t have recent readings.

However, if you have a smart meter you shouldn’t have to worry as it’s set up to automatically ensure you are billed correctly.

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Uswitch says a week of energy at the current rates is £4.65 more expensive for the average household than the incoming rates.

About 10 million customers are thought to be on a SVT without a smart meter.

The combination of the cheaper rates and warmer weather is estimated to mean the average household will spend £127 on gas and electricity in April, compared with £205 in March.

Nearly a fifth of people without a smart meter have not submitted a reading in the last three months and 4% haven’t done it for a year, according to a Uswitch survey of 2,000 people.

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What is the price cap and how does it work?

Twelve percent of these customers said they didn’t know where their meter was, while 14% didn’t know how to take a reading.

People without a smart meter are advised to read their meter every month to improve the accuracy of their bills.

The price cap is set by energy regulator Ofgem and is being cut again from the extreme highs of recent years – when it reached over £4,000 – thanks to a drop in wholesale prices,

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Ofgem also launched a consultation on the energy price cap this week, floating options such as a cap based on vulnerability and when energy is used.

The cap, which affects England, Scotland and Wales, was introduced in January 2019 to prevent people on variable tariffs being ripped off.

Initially it was changed a couple of times a year but since 2022 it has been updated every three months.

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‘Modest’ £63 rise in statutory sick pay is overdue, MPs say

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'Modest' £63 rise in statutory sick pay is overdue, MPs say

A “modest” increase in statutory sick pay (SSP) is overdue, according to a committee of MPs who say it must strike a balance between workers’ needs and what employers can afford.

The Work and Pensions Committee recommended a rate in line with the flat rate of Statutory Maternity Pay.

That would see SSP rise from the current weekly level of £109.40 to £172.48 per week.

The MPs also wanted to see SSP paid in combination with usual wages, in order to encourage phased returns to work.

The cross-party committee argued too that all workers should be eligible for SSP, not just those earning above the lower earnings limit of £123.

The government responded to the report by saying that a 6.7% increase would take effect next month.

In making their case, the MPs said they understood that the COVID pandemic and its immediate aftermath were not the right times to be placing additional financial burdens on employers.

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But they noted that a record 185.6 million working days had been lost to sickness or injury in 2022 – a time when the cost of living crisis was gathering pace.

Committee chair Sir Stephen Timms said it was clear the time had come to significantly bolster the support that many people depended on when they were unable to work.

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“Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness,” he wrote.

“With the country continuing to face high rates of sickness absence, the government can no longer afford to keep kicking the can down the road on reform.

“The committee’s proposals strike the right balance between widening and strengthening support and not placing excessive burdens on business.

“A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are they are no worse off financially during periods of sickness than employees on SSP.”

Companies, while sympathising with staff generally over sickness, have long complained about rising costs including for business rates and minimum pay rules.

Lobby groups have warned that the burden already risks being passed on in the form of higher prices, placing the rate of inflation under strain.

A Department for Work and Pensions spokesperson said of the report: “Statutory Sick Pay will increase by 6.7% from April.

“Our £2.5bn Back to Work Plan is tackling sickness absence and getting people back working, while we are expanding access to mental health services and supporting those at risk of long-term unemployment.”

TUC general secretary Paul Nowak responded: “The COVID-19 pandemic showed that our sick pay system is in desperate need of reform.

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“It beggars belief that ministers have done nothing to fix sick pay since.

“It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick.

“The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay.

“Wider reform is also needed to remove the three days people must wait before they get any sick pay at all.”

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Boohoo, ASOS and Asda sign new agreement as CMA urges fashion industry to review ‘green’ claims and practices

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Boohoo, ASOS  and Asda sign new agreement as CMA urges fashion industry to review 'green' claims and practices

The competition regulator has urged UK fashion businesses to give accurate information about how environmentally friendly their clothes are after three fast-fashion firms signed a new agreement.

The Competition and Markets Authority (CMA) had initiated an investigation into Boohoo, ASOS and George by Asda over concerns about the way products were marketed as eco-friendly.

Its initial review of the fashion sector had identified concerns of possible greenwashing – making items appear environmentally friendly when they are not.

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What’s changed?

But the firms have pledged to provide clear, prominent and transparent information about any environmental claims made about products, such as using terms like organic or recycled, rather than ambiguous ones like eco, responsible, or sustainable, with no further explanation.

Use of natural imagery such as green leaves or logos to suggest non-existent environmental benefits will also be avoided by the brands.

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Environmental information must be expressed in plain language, be easy to read, and clearly visible to shoppers.

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Any statements about fabric composition must be similarly clear and specific: the percentage of recycled or organic fibres must be clearly displayed.

If a brand has a specific range of clothes, designed to have less of a negative environmental impact than other products, then companies must provide detail on minimum requirements for items to be included in the collection.

Minimum percentages of recycled material, for example, should be made clear.

Any environmental targets set by fashion businesses must be supported by a clear and verifiable strategy with customers able to access more details about the goals.

Information must be provided on what the target is aiming to achieve, the date by which it is to be met, and how the company will reach it.

“A turning point for the industry”

These pledges “set a benchmark for the industry”, the CMA chief executive Sarah Cardell said, and build on already established marketing regulations.

In an open letter, the CMA called on fashion businesses to familiarise themselves with the new undertakings.

“This also marks a turning point for the industry… we expect the sector as a whole – from high street to designer brands – to take note and review their own practices,” Ms Cardell said.

More guidance for the fashion industry is to be published by the CMA, it said.

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