As I predicted, the BA job losses were sadly just the start of cost-cutting within the travel industry. Hot on the heels of British Airways announcement of 12,000 job losses, earlier today Virgin announced that they would be cutting up to 3,150 staff, which is almost a third of its workforce. The cuts are expected to be across all roles within the company. Virgin are currently in consultation with the relevant trade unions.
The cuts are part of Virgin’s quest to find an investor or government loan to secure its future. Without more investment, Richard Branson is warning that the airlines will not survive. The UK government previously turned down Virgin as it has not done enough to secure private funding. Yet the same UK government was happy to bail out Wizzair who did not actually need a loan to survive at all. Virgin say talks with the government and potential investors are ongoing.
Virgin to leave London Gatwick
Virgin has also announced that they plan to leave Gatwick for the foreseeable future and will consolidate all their flights at Heathrow. BA recently hinted that they may do the same. Gatwick is also where Virgin’s headquarters are based and where they originally started their flights from in 1984.
Given the Virgin’s Gatwick operation is relatively small, this makes sense given the savings of only operating from one base. Virgin operated a range of leisure routes from Gatwick such as its Caribbean routes and Orlando. Virgin is planning to lease their slots at Gatwick to ensure that they can return when travel returns to normal levels.
For Virgin’s customers, this will improve the airport experience with Virgin’s lovely Heathrow Clubhouse lounge being available to Upper Class customers once things start to return to normal.
From today, Virgin Atlantic will no longer use all of its seven B747-400s, with four A330-200 aircraft retiring in early 2022 as planned. Virgin are due to receive further A350-1000 deliveries but as yet there is no mention of any change in this.
Virgin has not made any comment on plans for the delivery of its remaining Airbus A350-1000 aircraft, which were all due to be delivered by 2021.
Virgin Holidays to be rebranded
Virgin Holidays will become Virgin Atlantic Holidays and continue to focus on its partnership with Next and digital distribution, with 15% of the Virgin Atlantic Holidays shops closing in 2020.
Shai Weiss, CEO, Virgin Atlantic commented: “We have weathered many storms since our first flight 36 years ago, but none has been as devastating as Covid-19 and the associated loss of life and livelihood for so many.
“However, to safeguard our future and emerge a sustainably profitable business, now is the time for further action to reduce our costs, preserve cash and to protect as many jobs as possible. It is crucial that we return to profitability in 2021. This will mean taking steps to reshape and resize Virgin Atlantic in line with demand, while always keeping our people and customers at the heart of all we do.
“I wish it was not the case, but we will have to reduce the number of people we employ. The commitment of our people throughout this crisis has been nothing but amazing, and the embodiment of true Virgin spirit. As we have navigated the Covid-19 crisis, I have been humbled at every step by their solidarity. In times of adversity we must support each other so that ultimately, we can emerge a stronger and better Virgin Atlantic.
“After 9/11 and the Global Financial Crisis, we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years. Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time.”