Virgin Australia Airline has announced to cut 3000 jobs, the cut would mean a cut of third of airline’s 9,000 workforce. The airline announced a sweeping restructuring plan Wednesday as it works to reduce costs amid the COVID-19 pandemic.
The company’s new owner, the US private equity group Bain Capital, plans to cut the Virgin Australia airline’s fleet in half and run only domestic flights for the foreseeable future but has stopped short of turning the company into a budget operator by keeping two classes of travel and maintaining its airport lounges.
Virgin Australia, the country’s second biggest airline, has had a tumultuous year. It was snapped up by Bain Capital in June after failing to receive the government support it had asked for and filing for voluntary administration.
The Airline said “Making these changes now will secure approximately 6,000 jobs once market demand recovers, with potential to increase to 8,000 jobs in the future.”
It will “discontinue” the Tigerair Australia brand but maintain its air operator certificate and the necessary support to provide the option of relaunching ultra-low-cost operations when the market recovers.
The airline also plans to cut office space, including by moving its Brisbane headquarters from Bowen Hills to Southbank, where it will co-locate with the travel agent Flight Centre.
Virgin Australia CEO Paul Scurrah said, “Even when the industry recovers, the company believes airlines will “look very different than the way they did previously.”
“Our aviation and tourism sectors face continued uncertainty in the face of Covid-19, with many Australian airports recording passenger numbers less than 3% of last year,” he added.
After crumbling in April under Aus$6.8 billion ($4.9 billion) in borrowings, Virgin Australia will also get rid of all its long-distance Boeing Co. 777 and Airbus SE A330 jets and fly only Boeing 737s on short-haul routes.
CEO Paul said, “full recovery for the industry is unlikely before 2024, a year later than previously anticipated, the International Air Transport Association has warned. And even that might be optimistic”.
The airline started as a low-cost domestic carrier in 2000. When it went under, Virgin Australia operated 144 aircraft. It had pushed back delivery of Boeing Co. 737 Max jets to July 2021, when it expected to receive the first of the 48 it had on order.
(Source: The Finance Post)