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Virgin Atlantic secures £1.2bn bailout, cuts 1,150 more jobs

written by Hannah Dowling | September 7, 2020
Boeing 747-400 Virgin Atlantic (Image supplied by Rob Finlayson).

Virgin Atlantic has said it will cut 1,150 more jobs, despite securing a £1.2 billion (US$1.59 billion) rescue fund, which was signed off by a US court on Thursday.

This brings total job cuts across the airline to over 4,300 since the beginning of the COVID-19 pandemic and subsequent global aviation downturn.

The airline said the cuts were “heartbreaking, but essential” to its ongoing survival.

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“Until travel returns in greater numbers, survival is predicated on reducing costs further and continuing to preserve cash,” Virgin Atlantic said.

“The outlook for trans-Atlantic flying, which is core to Virgin Atlantic’s business, remains uncertain with US-UK travel curtailed.”

Virgin Atlantic noted that the past six months had been “the most challenging in Virgin Atlantic’s history”, and that this latest round of redundancies would hopefully be its last.

The carrier said that a 45-day consultation with unions is now underway on the matter.

Pilots union BALPA said that it had hoped to avoid job losses

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“Every single job lost to this crisis is a tragedy and we are doing everything we can to mitigate job losses across the board,” said BALPA general secretary Brian Strutton. 

“Despite no help from government, their financing is now secure.”

On Thursday, Virgin Atlantic received both UK and US court approval for its £1.2 billion refinancing package, which it said should see it through the next 18 months.

The rescue package includes a £200 million pledge from Sir Richard Branson’s Virgin Group, the airline’s largest shareholder, as well as agreement from creditors to reduce and defer the airline’s debts.

Speaking of the deal, Virgin Atlantic chief executive Shai Weiss said, “Together, we have achieved what many thought impossible and that is down to the efforts and sacrifices of so many across the company.”

However, he also called for “urgent government action” to introduce passenger COVID-19 testing, in an effort to ease global travel restrictions, and save airlines.

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