Economy

Virgin Atlantic Plans 1,150 More Job Cuts After Completing Rescue Deal

Virgin Atlantic Plans 1,150 More Job Cuts After Completing Rescue Deal”

"Today (Virgin Atlantic) is announcing further downsizing across the business, with a planned reduction of 1,150 jobs across all functions", the company said Friday in a statement that also confirmed completion of the rescue.

Virgin Atlantic said it was cutting another 1,150 jobs and putting 600 staff on furlough despite the struggling airline receiving approval for its privately-financed £1.2bn rescue plan. Talks had started with the pilots union BALPA and Unite, which represents ground and air crew, the company said on Friday. Under the deal USA hedge fund Davidson Kempner Capital Management will pump in £170m, with founder Richard Branson putting contributing £200m after selling shares in his space travel company Virgin Galactic.

Announced on July 14, the restructuring hinges on a new five-year business plan endorsed by Virgin Group and 49-percent shareholder Delta Air Lines, along with new private investors and the existing creditors.

The recapitalization centers on a refinancing package worth £1.2 billion ($1.59 billion) over the next 18 months and "self-help" measures already taken, including cost savings of £280 million per year and an £880 million re-phasing and financing of aircraft deliveries over the next five years. Virgin Group owns the remaining shares.

Virgin Atlantic does not foresee a return to pre-crisis levels of flying until 2023.

More news: Now, Airtel launches unlimited offer on Xstream

Transatlantic flying is 70% of Virgin Atlantic's network, and the airline called on Britain to introduce virus tests at airports to replace its policy of travellers having to quarantine for 14 days from some countries, such as the United States.

As the airline increases passenger operations, it argued the opening of USA borders and removal of quarantine is imperative to recovery.

Travel restrictions on British nationals going to the United States have been in place longer than expected, Virgin Atlantic said, adding the outlook for transatlantic routes was that current skeleton operations would not be expanded until 2021.

"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", the company said in a statement.



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