Virgin Atlantic to cut another 1,150 jobs after £1.2bn rescue deal
Virgin Atlantic is cutting a further 1,150 jobs as part of a radical restructuring plan following its £1.2bn rescue deal.
The airline, founded by Sir Richard Branson in 1984, said the cuts were a result of the “devastating” impact of the coronavirus crisis.
It comes less than four months after Virgin said it was axing 3,150 roles and closing its base at Gatwick Airport.
The latest round of cuts means the company’s workforce has almost halved from its pre-pandemic level of 10,000.
“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,” said chief executive Shai Weiss.
Virgin’s £1.2bn rescue package, which was approved by the High Court yesterday, has all but secured the company’s continued survival.
The deal includes £600m of support from shareholders Virgin Group and Delta, including £200m of new cash from Branson’s company.
Davidson Kempner Capital Management, a global institutional investment management firm, is providing £170m of secured financing and the airline’s largest creditors and suppliers are contributing an additional £450m.
Virgin hailed a “significant milestone”, saying the package put it in a position to rebuild its balance sheet.
But the new cuts show the extent of the damage to the aviation sector caused by the pandemic, with demand for international air travel recovering at an even slower rate.
Last night Ryanair raised €400m (£360m) from shareholders in a bid to bolster its balance sheet in the wake of the coronavirus lockdown.
The budget airline’s passenger numbers were down by more than half in August as the UK’s quarantine rules wreaked havoc for travellers.
But Ryanair has been less badly affected than many of its rivals due to its relatively low level of debt and lack of exposure to the long-haul and business class markets.