Tuesday, 5 May 2020

3150 jobs to go as Virgin Atlantic slims down for life after COVID-19

Photo Virgin Atlantic

Without a buyer coming forward and no sign of the massive government bailout it asked for, one of the UK's leading airlines, Virgin Atlantic has announced shock plans for a much slimmed down airline to survive in a post-COVID-19 world.

Over 3000 jobs axed

The airline has served notice on Tuesday to 3150 staff from a wide variety of roles within the Sussex based airline.  The shock news has devastated staff from across the south-east, many greeting the news with tears and bewilderment. Virgin Atlantic said it was working with the unions BALPA and Unite, over the job cuts with the legal minimum 45 days consultation period rushed forward to start today, although Unite disputed that, saying Virgin had not yet told them officially of the mass job losses.

Oliver Richardson from the Unite union said "The decision to make 3,150 staff redundant across Virgin’s holiday and airline businesses is another devastating blow to the UK’s beleaguered aviation industry," said Unite national officer for civil air transport - It is also premature as the government’s job retention scheme is still up and running and being fully utilised by the company. The company as yet have not formally notified us of the detail of their proposals, and we urge them not to act in haste whilst the job retention scheme is in operation.”

BALPA General Secretary Brian Strutton said: "Our members and all staff in Virgin Atlantic will be shocked by the scale of this bombshell. We will be challenging Virgin very hard to justify this. My letter to the Chancellor yesterday is all the more significant - why is the government sitting on its hands while aviation plunges further towards a death spiral? The government should call a moratorium on job losses in aviation and lead a planned recovery."

Fleet reduction 

From today, Virgin Atlantic will no longer use all of its seven Boeing 747-400s, four Airbus A330-200 aircraft will be retiring in the spring of 2022 as previously planned.  Then the carrier will fly just a small fleet of 36 twin-engine aircraft on a much-reduced schedule.

Farewell Tinker Belle (G-VBIG), Ladybird(G-VAST), Ruby Tuesday (G-VXLG), English Rose (G-VROS), Hot Lips (G-VLIP), Barbarella (G-VROM), Pretty Woman (G-VROY) and Jersey Girl (G-VGAL), you served Virgin Atlantic well. 

Photo Gatwick Airport 

Ending Gatwick operations.

Virgin also confirmed today that it will be moving its flying programme from London Gatwick to London Heathrow as soon as possible, with the intention of just operating from Heathrow and Manchester. 

This is a massive body blow for the Sussex airport, already reeling from the news that British Airways will almost certainly be closing down its operations at the airport and budget carrier Norwegian will be greatly reducing its route network at the airport as part of its own battle of survival. 

Unite assistant general secretary Diana Holland said: “We have grave concerns about the impact on Gatwick airport and the local economy following this latest blow. The Virgin announcement that it is pulling out of Gatwick follows Norwegian and BA indicating they are reducing operations [at] Gatwick. There have been 18,000 job losses announced in the UK aviation sector in the last week alone, and this makes the case even more strongly that the aviation industry-specific package Unite has consistently called for, and the government has promised, must now be delivered."

Virgin has said that it intends to keep its slots at Gatwick and might one day return to the airport, once demand picks up, however it may seem more plausible for the airline to retain the slots for the time being and offer them for sale when the market picks up again in the post-COVID-19 world. 

It is understood the management of Gatwick Airport had little notice from Virgin about the sudden announcement. A Gatwick spokesperson said: "We are very saddened to hear the news today about Virgin Atlantic’s plans.  We have had a long, close and successful relationship with the airline since it made its maiden flight from Gatwick back in 1984.  Virgin Atlantic will always be welcome at Gatwick and we will continue our efforts to explore ways to restart the airline’s operations as soon as possible, in the knowledge that they intend to retain their slot portfolio at Gatwick for when demand returns. This news will be devastating for its staff and the many local businesses that supply and support the airline at the airport and its HQ in Crawley, however, we will continue to work with Virgin Atlantic to get them flying again from Gatwick.

We remain very optimistic about the long-term prospects of Gatwick Airport and our resilience as a business and having remained open throughout this pandemic we are in a strong position to extend our current operations quickly to meet demand.   We will continue to work closely with our other airline partners, including easyJet, the IAG Group, Wizz, TUI and Ryanair to strengthen our business for the future.  We also welcome the recent news that another of our major airline partners – Norwegian Airways – has taken important steps forward to secure its future at Gatwick. 

“We look forward to all our airlines flying again soon.”

Virgin Holidays to be rebranded Virgin Atlantic Holidays and stores closed.

Virgin Holidays will become Virgin Atlantic Holidays, with the idea it will be one "powerful brand" while simplifying the brands for customers. Virgin Atlantic Holidays will continue to focus on its partnership with Next and digital distribution, with 15% of the Virgin Atlantic Holidays retail estate 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.

“Our vision for Virgin Atlantic remains the same - to become the most loved travel company, for our people and our customers. Once the crisis stabilises, Virgin Atlantic has an important role to play in contributing to the UK’s economic recovery, providing essential connectivity and competition.”

Photo Virgin Atlantic
The airline had started to move its Boeing 747 aircraft up from London to Manchester yesterday in preparation for today's announcement and Virgin Atlantic said it would continue to 'explore all available options to obtain additional external funding'. Discussions with the government and other stakeholders would continue while the firm continues to benefit from shareholder support. 

The bottom line is the future,  will Virgin Atlantic fulfil its aim to become the most loved travel company and the sustainability leader in our industry. To emerge from this crisis and make a significant contribution to the UK’s economic recovery by providing essential connectivity and competition. or will it fail to regain its strength, its passion and the comradery of the once dedicated workforce which will leave it floundering in the lower leagues of the 'small airlines' table?  Already there are many that doubt, even with the drastic measures announced by the firm today, that the Virgin Atlantic brand will still be flying this time next year.   

These are uncertain times, the aviation industry is in turmoil and predicting the future is less like a science and more like a fool's errand, yet one can't help but feel deep sympathy for those hard-working and dedicated professionals that work for Virgin Atlantic and now find themselves in a very unsettling and unsavoury position. I wanted to end on a positive note,  a cheery message of hope, yet light at the end of this particular tunnel, there is none. 

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