ALEX BRUMMER: BA and Virgin need the green light to fly to America

As desirable as it may be for the UK’s no-frills carriers that holiday destinations to Europe turn green, it is even more important to IAG-owned British Airways and Virgin Atlantic that routes to America be reopened.

BA has long been the dominant carrier across the Atlantic and the closure of the United States is an immense drain on resources.

British carriers BA and Virgin Atlantic, in contrast to US and EU rivals, have received no government subvention other than access to lending and furlough.

Grounded: British Airways has long been the dominant carrier across the Atlantic and the closure of the United States is an immense drain on resource

Grounded: British Airways has long been the dominant carrier across the Atlantic and the closure of the United States is an immense drain on resource

In the first three months of the year IAG losses hit £896million. New fissures also opened in Virgin Atlantic’s finances and it raised £160million of extra cash in March.

This week’s G7 summit in Cornwall has much to deal with including the new global taxation regime, vaccine manufacture and distribution, Cop-26 and relationships with autocratic regimes in China and Russia.

However, if it is fine for world leaders and their huge entourages (the US Secret Service contingent is 400 alone) to resume long-haul travel then it ought to be possible for transatlantic routes to be opened to commercial and consumer travel. 

Ahead of his eight-day sojourn in Europe, US President Joe Biden offered a chink of light with the creation of an Atlantic Taskforce.

He has set up groups to advise on loosening restrictions on arrivals from the UK, the EU, Canada and Mexico. 

Former president Donald Trump imposed travel bans in 2020 to limit the spread of Covid-19.  He dropped the rules before leaving office. Biden immediately reimposed them.

With the rapid vaccine rollout among the Western democracies, Biden’s team have recognised the importance of opening up global travel. 

Britain, with its close finance and commercial ties to the US, is particularly harmed by the strict rules.

It will be no surprise if Boris Johnson uses the G7 as an opportunity to put some jet fuel behind the idea of a trans-Atlantic corridor. 

The meeting of G7 leaders is of enormous significance. It comes as the US Senate has approved legislation designed to boost the capability of US technology to compete with China.

For Britain’s gasping global airlines, a big victory would be a green light from Washington on opening up airspace.

Whether the Covid-shy members of the Government think that is a good idea is a whole different ball of wax.

Soft Shu shuffle

The slump in Deliveroo shares has been terrible both for investors and for London’s reputation as a great place to float.

Founder and chief executive Will Shu made a huge strategic error. He insisted on exploiting Lord Hill’s backing for two classes of shareholders, enabling him to stay in the driving seat. He reasoned this would allow it to repel any takeovers.

But in so doing he alienated potential British long investors and should have adjusted to this by lowering the ambition of the float price.

The IPO proved catastrophic, with the shares falling 25 per cent from a lowered target of 390p and currently trading at just 249.6p.

This is a blow to private investors who bought into the Deliveroo brand, as well as institutions who backed the float.

Even though turnover remains strong, as the pandemic retreats, big battalion investors are displeased.

High-profile communications boss Thea Rogers is blamed for a flawed strategy when it came to defending the employment terms of riders. As seriously, investors are concerned that Shu wields too much power.

They are insisting that if confidence is to be restored, he needs to bring in a powerful chief operations officer who can inspire market confidence. 

There is no free lunch for the boss of a public company, even one protected by super-voting shares.

Trading stamp

Where would we be without eclectic London fund manager Gary Channon?

His mix of investments includes funeral director Dignity, toy maker Hornby and the high priests of stamp collecting, Stanley Gibbons. 

A loan from Channon’s Phoenix Asset Management allowed Gibbons, which makes a loss, to snaffle up the 1856 One-Cent Magenta from British Guiana, (now Guyana) for a cool £6million. It is, in effect, an option on the collectables market.

But also a great draw designed to bring philatelists to the holy of holies – the Gibbons emporium on the Strand in London.

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