Virgin Atlantic’s future looks to be a lot smaller than it currently is, with fewer people in post, twos less type of aircraft to be operated and one less hub.
COVID-19 as we all know is damaging the aviation industry at all angles and Virgin Atlantic is no exception, with expected capacity shrinks. Combined with the uncertainty around when “normal” flying will resume, and with unprecedented market conditions brought on by the pandemic – it hasn’t helped the revenues of the airline
The airline has taken steps to preserve cash, but its time for the airline to make more cuts.
Firstly, the people. And it’s going to be brutal cut, with 3150 posts on the line across all functions in the airline. They plan to work with unions BALPA and Unite, and the company-wide consultation period of 45 days commences today.
In terms of network, Virgin Atlantic will move its network at Gatwick Airport to London Heathrow – leaving only Heathrow and Manchester as its hubs. The airline intends to retaining its slot portfolio at London Gatwick, so it can return in line with customer demand.
In terms of fleet, the Boeing 747-400 will exit the fleet (as of today) with seven aircraft being grounded.
In addition, four A330-200 aircraft retiring in early 2022 as planned (the aircraft originally came from airBerlin after that airline collapsed to provide extra capacity during the Boeing 787 Rolls Royce Engine issues)
It will also rebrand Virgin Holidays as Virgin Atlantic Holidays with plans to close 15% of the Virgin Atlantic Holidays retail estate in 2020.
Meanwhile, Virgin Atlantic Cargo will continue to provide essential services during this crisis and beyond,
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.
A much smaller Virgin Atlantic
Virgin Atlantic planned shrink will see it loose 11 aircraft in total, leaving it with 10 Airbus A330-300, 4 delivered Airbus A350-100 and 12 Boeing 787-9. However, it will be missing something that makes up the heart of the airline – 3150 people who put themselves forward to deliver a unique passenger experience.
Whilst Shai Weiss’s words may offer some reassurance in the longer term – in the short term, there is a lot of pain ahead for the carrier.
How it will come out of this pain… we can only wait.
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