Virgin Atlantic plots further cuts after finalising rescue

Announcing the formal completion of its GBP1.2 billion pound (USD1.6 billion) solvent recapitalisation, Virgin Atlantic (VS, London Heathrow) said that it would reduce its staff by a further 1,150 workers. The carrier said that it would commence the 45-day mandatory consultative period with unions BALPA and Unite immediately. The cuts would affect all divisions of the company. In addition, Virgin launched a voluntary programme of company-financed furlough scheme for 600 cabin crew starting at the end of October, when the current government-funded programme is scheduled to end. The airline said that if the government extends its support, it will continue to benefit from it. “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,” Chief Executive Shai Weiss said. The airline said that while the giant rescue plan, backed by shareholders Virgin Group and Delta Air Lines (DL, Atlanta Hartsfield Jackson), Davidson Kempner Capital Management, and other creditors and suppliers of Virgin Atlantic, was “a major step forward in securing the future of Virgin Atlantic”, the continuing uncertainty affecting the transatlantic market remained a challenge. Transatlantic flying represented 70% of Virgin Atlantic’s business pre-pandemic. “It’s clear that the introduction of passenger testing is the only way to enable the removal of travel restrictions and open up flying to key markets, while protecting public health. We will continue to work with our industry partners to press for urgent government action,” Weiss said.