Job cuts ‘essential for survival’, says Virgin despite £1.2bn bail out package

Virgin Atlantic has confirmed plans to cut a further 1,150 jobs in a move it insists is essential for its survival.

A 45-day consultation has begun with staff and unions with the cuts coming across the airline.

Chief Executive Shai Weiss stressed that while the £1.2bn recapitalisation of the airline had been completed and secured the airline’s future, tough decisions were still required.

The airline predicted transatlantic flying from the UK is unlikely to extend beyond current skeleton operations until the beginning of 2021.

"After the sacrifices so many of our people have made, further reducing the number of people we employ is heart-breaking but essential for survival," he said.

"Together, we have achieved what many thought impossible and that is down to the efforts and sacrifices of so many across the company.

"The completion of the private only, solvent recapitalisation of Virgin Atlantic removes much of the uncertainty we faced and represents a major step forward in our fight for survival.

"We greatly appreciate the support of our shareholders, creditors and new private investors and together, we will ensure that the airline continues to provide vital connectivity and competition.

"Now we must focus our efforts on securing our long-term future, by ensuring that Virgin Atlantic not only survives but thrives as passenger demand returns."

He said the carrier is introducing a voluntary, company- financed furlough scheme for an additional 600 crew when the Job Retention Scheme ends at the end of October. The move is intended to mitigate cabin crew redundancies, the airline said.

Brian Strutton, General Secretary of pilot union BALPA, said a day doesn’t pass ‘without more tough news from the aviation industry’.

"This announcement from Virgin is the latest," he said. "Our reps are meeting with Virgin next week and I am hopeful that we will find a way through to avoid any further pilot redundancies.

"Every single job lost to this crisis is a tragedy and we are doing everything we can to mitigate job losses across the board.
 
"Despite no help from Government, their financing is now secure. I am confident that Virgin Atlantic will get through this Coronavirus crisis and will emerge in a strong position."

Weiss called on the government to introduce Covid testing to open up flying to key markets and to kick start the industry.

"We will continue to work with our industry partners to press for urgent government action," he said.

The opening of US borders and removal of quarantine is ‘imperative to recovery’, he added.

The five-year refinancing plan includes £600m in financial support from shareholders Virgin Group and Delta, £280m in cost savings per year and an £880m reduction in fleet expenditure.

The airline said the outlook for transatlantic flying, which is 70% of Virgin Atlantic’s business, remains uncertain.

Until travel returns in greater numbers, survival is ‘predicated on reducing costs further and continuing to preserve cash’, it said.

"Since 16 March it has not been possible for many British nationals to enter the US upon arrival from the UK, Ireland and the Schengen Area.

"These travel restrictions impact on Virgin Atlantic disproportionally given its long-haul operations focussed on the transatlantic."

Virgin said Q4 capacity would be only around 25% of 2019 levels while revenues in 2021 will be half those of last year.