Virgin Australia slashes 3000 staff and resets a new flightpath

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August 05, 2020
Virgin Australia
Happier times at Virgin Australia.

Virgin Australia is to make redundant 3000 staff, suspend international operations but retain its regional and charter division.

The airline has outlined the new Virgin Australia model to the Australian Stock Exchange.

It said it is reducing its cost base to meet uncertainty and COVID-19 market conditions but securing approximately 6,000 jobs when the market recovers with 3,000 roles impacted.

The airline will simplify its fleet to an all-Boeing 737 mainline fleet with the retention of the regional and charter fleet based in WA.

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The airline’s Boeing 777, Airbus A330, ATR turboprops, and Tigerair Airbus A320 aircraft types will go.

However, the fate of the A320s based in Western Australia as part of the charter fleet is unclear.

Virgin Australia said the airline’s long-haul international flying is an important part of the long term plan but is suspended until global travel market recovers.

Virgin Australia Group CEO and Managing Director Paul Scurrah said together with Bain Capital, the plan will help to re-establish Virgin Australia as an iconic Australian airline, bringing strong competition for travelers while securing approximately 6,000 direct jobs and indirect employment for more than 30,000 Australians.

“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than three percent of last year and ongoing changes to government travel restrictions,” said Mr. Scurrah.

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“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world.

“In a country as big as Australia, strong competitive airlines are critical in helping restore the economy, which is why in the face of the worst crisis our industry has ever seen, a well-capitalized Virgin Australia Group with a solid and sustainable future is a great outcome for Australians and the nation’s economy.

He warned that “even when we do see a return to pre-COVID-19 levels of travel, successful airlines will be influenced by demand and look very different than the way they did previously, requiring long-term capital, a lower cost base and be more focused on providing exceptional experiences through a combination of great people and world-class technologies.”

“Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market. We believe that over time we can set the foundations to grow Virgin Australia again and re-employ many of the highly skilled Virgin Australia teams.

Mr. Scurrah added that “our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10-million-member strong Velocity Frequent Flyer program, continuing to offer an extensive network of destinations, a domestic lounge network, and value for money for customers.”

Virgin Australia will provide customers with the value of their travel credits post-administration. To preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023. Further information about the use of credits will be provided to customers in due course.

Customers and travel agents will be notified directly of any flight cancellations associated with the announcements made today. Tigerair Australia customers and those affected by any cancellations will be provided a travel credit for use on Virgin Australia operated services.