Virgin Atlantic to axe 3 000 workers
The crisis engulfing the airline industry deepened yesterday as Virgin Atlantic announced plans to lay off a third of its workers. Up to 3 150 staff will be made redundant in the coming weeks and the carrier will abandon its long-running base at Gatwick Airport, bosses have said.
They also announced plans to retire ten aircraft, including seven jumbo jets. Sir Richard Branson’s airline, which endured years of losses before the pandemic – is fighting for survival amid plummeting passenger numbers and global travel restrictions.
Bosses on Tuesday said they believe the aviation industry will not recover from the pandemic until 2023.
On Tusday night, distraught staff said they were "shocked by the scale" of the planned cuts, which were announced weeks after Sir Richard promised to "protect as many jobs as possible".
Some are questioning whether the tycoon, who is worth £4.7-billion and is based in a Caribbean tax haven, could have done more to protect worker’s jobs during the crisis.
About 80 percent of Virgin Atlantic’s staff have been furloughed under the British government’s job retention scheme.
However, chief executive Shai Weiss told staff the scheme is "not enough" to "safeguard Virgin’s future and emerge from this crisis a sustainably profitable business".
Tim Alderslade, of Airlines UK, said: "The furlough scheme has been hugely important... but the taxpayer cannot subsidise wages forever and we will therefore need further Government support as we enter the recovery stage to stimulate demand."
The crisis also threatens the future of airports.
Following the announcement, the Unite union said they have "grave concerns" for Gatwick – Virgin’s main operating base since its first flight in 1984. Virgin was Gatwick’s ninth-largest airline and one of its most popular carriers.
It comes after BA suggested it might abandon the airport entirely once the crisis is over.
Pressure is mounting on the Government to unveil a support package for the aviation industry, where 18 000 job losses have been announced in the last week alone.
Last month, Sir Richard warned Virgin Atlantic could collapse by the end of this month without a £500-million loan from the Treasury’s emergency coronavirus fund. He even suggested he would be use Necker Island – his private Caribbean bolthole estimated to be worth £80-million – as collateral for any taxpayer loan.
But ministers were said to have considered Virgin’s prediction of an imminent upswing in travel as overly optimistic. Passenger numbers are expected to stay low once lockdown restrictions ease.
Weiss said: "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."