Virgin Atlantic has announced it is planning to cut a
further 1,150 jobs across the company and offer a furlough scheme for cabin
crew as part of a restructuring plan as it completes a £1.2 billion
recapitalisation deal.
The airline’s plan was formally approved by courts in the UK
and US this week, putting it in a position “to rebuild its balance sheet,
restore customer confidence and welcome passengers back to the skies”,
according to the company. The deal includes £400 million in new cash, £200
million of which will be provided by Sir Richard Branson’s Virgin Group.
As part of the recapitalisation, Virgin Atlantic will now
implement a restructuring plan with the support of majority owners Virgin Group
and Delta.
However, with travel restrictions continuing for
transatlantic journeys, the airline said it is planning for a scenario in which
operations between the UK and US do not extend beyond “current skeleton
operations” until 2021. In this scenario, Q4 capacity across the network would
be around 25 per cent of 2019 levels, with 2021 revenue potentially only
hitting 50 per cent of what the airline achieved in 2019.
As such, Virgin Atlantic said it will begin formal
consultations with the Unite and BALPA unions over a further 1,150 job cuts in
addition to the more than 3,500 redundancies it has already made as a result of
the coronavirus crisis.
To mitigate as many cabin crew redundancies as possible, the
airline said it will offer a voluntary, company-led and financed furlough
scheme for an additional 600 crew when the UK government-funded Coronavirus Job
Retention Scheme ends in October. However, should the government extend its own
scheme, the airline will continue to use it.
Virgin Atlantic CEO Shai Weiss said: “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 our
survival.
“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.
“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. I truly hope that as demand returns, we will see many members of
our team returning to us… There will be a recovery, the timing and speed of
which is uncertain.”
Weiss also repeated the airline’s support of airport
coronavirus testing as a way to open up transatlantic flying, a key market for Virgin
Atlantic accounting for 70 per cent of its network.