Virgin axes further 1,150 jobs after rescue deal confirmed

Virgin Atlantic’s workforce now numbers half of its pre-pandemic capacity

Virgin Atlantic's solvent recapitalisation confirmed as a 'major step forward in securing the future of Virgin Atlantic' (istock)

Virgin Atlantic has confirmed plans to cut 1,150 jobs today, despite the recent approval of a £1.2bn rescue deal.

The latest round of cuts follows the axing of 3,150 roles in May, comprising one third of the airline’s workforce, and the recent announcement that it would run out of money by the end of September if creditors did not agree on a bailout package.

A company-wide consultation period of 45 days begins today in conjunction with unions, including the British Airlines Pilots’ Association (BALPA), it announced in a statement.

Virgin has also announced a company-funded furlough scheme for 600 crew if, as is expected, the government’s coronavirus Job Retention Scheme comes to an end in October.

The new cuts mean that the number of staff working for the carrier will be half of the pre-pandemic figure.

Shai Weiss, Virgin Atlantic’s CEO, said: “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.”

The airline, which was founded by Sir Richard Branson in 1984, recently announced the closure of its base at London’s Gatwick Airport and the withdrawal of its Boeing 747 aircraft, reducing its fleet from 43 to 36 planes.

At the end of August, it secured the “overwhelming support” of its 170 creditors, the majority of whom agreed to a complex restructuring plan.

Virgin Atlantic has now confirmed the completion of its solvent recapitalisation, a move it described as “a major step forward in securing the future of Virgin Atlantic.”

“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel,” a statement read.

In response to the news, Brian Strutton, BALPA general secretary said: “Hardly a day now goes by without more tough news from the aviation industry. This announcement from Virgin is the latest.

“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.

He added: "I am confident that Virgin Atlantic will get through this coronavirus crisis and will emerge in a strong position."

The news is the latest blow to a travel industry struggling to cope with the grounding of flights around the world as a consequence of the coronavirus pandemic.

On Thursday, Ryanair sought to raise £360m from investors to boost its finances ahead of the winter months, during what it called “the most challenging period in its history”.

Elsewhere, British Airways has already cut more than 6,000 staff through voluntary redundancy and mothballed its £200m Heathrow base; easyJet has announced that it will close its bases at London Stansted, London Southend and Newcastle airports from 1 September, as well as slashing 30 per cent of jobs; and Jet2 is making 102 pilots redundant.