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Virgin Atlantic axing 1,150 more jobs despite ok for £1.2bn rescue deal

Fri, 4th Sep 2020 13:03

(Sharecast News) - 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.
The carrier had already cut more than 3,500 jobs out of the 10,000 employees it had before the coronavirus outbreak grounded fleets around the world.

It had previously indicated that no more staff would be axed after the bailout package. Talks had started with the pilots union BALPA and Unite, which represents ground and air crew, the company said on Friday.

The last six months had been the "most challenging in Virgin Atlantic's history", it added and warned the outlook for transatlantic flying, core to business, remained uncertain with US-UK travel curtailed,

"Unfortunately, despite actions already taken to reshape and resize the business, regrettably the airline must go further one last time with changes at scale, to ensure it emerges from this crisis."

"Until travel returns in greater numbers, survival is predicated on reducing costs further and continuing to preserve cash."

UK and US courts agreed rubber-stamped the package this week. Under the deal US hedge fund Davidson Kempner Capital Management will pump in £170m in fresh cash, with founder Richard Branson putting contributing £200m after selling shares in his space travel company Virgin Galatic.

There would also be £450m in debt relief from co-owners Delta Air Lines and Branson's Virgin Group, along with jet-leasing firms, granting concessions on payment terms.

The recapitalisation is expected to help Virgin survive the next 18 months as the aviation industry, battered by lockdowns and quarantines, emerges from the crisis in a much leaner form.

Virgin added that it was is introducing a voluntary, company-financed furlough scheme for an additional 600 crew when the government's coronavirus job retention scheme ends on October 31 "to mitigate as many cabin crew redundancies as possible".

"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 said on Friday.

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