Hot on the heels of a US$1.6 billion rescue package, Virgin Atlantic Airways is looking to cut an additional 1,000 jobs after previously downsizing its workforce by 35%. The airline is attributing this latest move to a collapse in transatlantic travel and continuing depressed demand across its network.
A report by Mark Kleinman from SkyNews earlier this evening says the jobs could go within hours. He cites an aviation industry source who says Virgin Atlantic could keep some redundant staff on call to stand up if demand returns unexpectedly.
Virgin Atlantic will see its workforce nearly halved
Virgin Atlantic cut its 10,000 strong workforce by 35% in May. With this round of impending cuts, the airline’s workforce will have been cut by 45% this year alone. Heathrow-based competitor, British Airways, is letting more than 10,000 employees go.
This news follows Virgin Atlantic’s rescue package getting the tick of approval from the UK courts earlier this week. Private-equity firm Davidson Kempner Capital Management stepped in with a US$1.6 billion loan after the British Government refused state aid.
The airline’s founder, Richard Branson, also kicked in US$266 million of his own money. He raised the money through the sale of shares in Virgin Galactic Holdings.
Rescue package comes just in time
That rescue package came in the nick of time. For months Virgin Atlantic has teetered on the edge of collapse amid a financial crisis caused by the downturn in demand for travel. In April, the airline temporarily suspended flying altogether. It has since resumed some services. But stringent border restrictions on both sides of the Atlantic have seen the all-important transatlantic travel market collapse. Virgin Atlantic was a key player on transatlantic routes.
Virgin Atlantic is now back flying to New York, Los Angeles, and Miami. That’s well down on the ten United States destinations it flew to in 2019.
Pundits say that with this week’s rescue package, Virgin Atlantic is safe until the next northern spring, assuming it can haul in its weekly cash burn. Further trimming the workforce is a step in that direction.
Virgin Atlantic sends its planes in new directions
With severely curtailed transatlantic traffic, Virgin Atlantic is sending some of its planes elsewhere. Flights to Delhi, Tel Aviv, Atlanta, Mumbai, and Lagos are resuming this month. The airline is also heading to Pakistan for the first time.
Last week, Tom Boon in Simple Flying reported Virgin Atlantic is launching three new routes into Pakistan in December. Islamabad will see Virgin Atlantic jets come in from both London Heathrow and Manchester. Lahore will get direct services from Heathrow.
“Pakistan is an extremely exciting opportunity for us – it boasts one of the largest foreign-born populations in both the UK and the US,” said Juha Jarvinen, Chief Commercial Officer at Virgin Atlantic.
But the ability of Virgin Atlantic to keep flying was in doubt until the courts cleared this week’s rescue package. Despite this, as the latest news out of the Virgin Atlantic bunker suggests, it’s not going to be smooth sailing at the airline.
There is no word on which sections of the airline’s workforce will get targeted in this latest round of job cuts at Virgin Atlantic. However, further announcements concerning the job cuts are expected shortly.
