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Coronavirus: Virgin Atlantic to axe a further 1,150 jobs in restructuring

·Finance and news reporter
·2-min read

Virgin Atlantic said on Friday that a further 1,150 jobs at the airline are set to be axed as part of the sweeping restructuring plan approved by the High Court this week.

The fresh job cuts come on top of the 3,500 roles that the company slashed in June — leaving the embattled airline with fewer than half the number of employees it had prior to the pandemic.

“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.

“I truly hope that as demand returns, we will see many members of our team returning to us.”

Virgin Atlantic said it would work closely with unions as it begins a 45-day consultation period with employees.

Virgin Atlantic Airline planes are pictured at the apron at Manchester Airport in north-west England, on June 8, 2020, as the UK government's planned 14-day quarantine for international arrivals to limit the spread of the novel coronavirus begins. (Photo by Oli SCARFF / AFP) (Photo by OLI SCARFF/AFP via Getty Images)
The job cuts come after the High Court approved a restructuring plan for Virgin Atlantic earlier this week. Photo: Oli Scarff/AFP via Getty Images

READ MORE: Virgin Atlantic creditors approve £1.2bn rescue plan

The airline also announced the launch of its own furlough scheme for an additional 600 crew members, which would come into effect when the government’s wage-subsidy scheme is wound down at the end of October.

This would reduce the number of cabin crew redundancies, it said.

The High Court on Wednesday approved a £1.2bn ($1.6bn) rescue package for the embattled airline.

That rubber stamp came after the plan last month received the “overwhelming support” of all four of the airline’s creditor classes.

Around 170 of Virgin Atlantic’s creditors had been asked to accept a 20% reduction in the money that they are owed.

The airline had warned that it could collapse into administration if the package was not sanctioned by the court, and said that it could “run out of money altogether” by the end of September.

Airlines are confronting an unprecedented crisis in coronavirus, and the airline said on Friday that the impact of the pandemic on global aviation continued “unabated,” necessitating “further steps to ensure survival.”

READ MORE: Heathrow says jobs 'guaranteed' but demands staff take pay cuts

“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel,” the airline said on Friday.

The package, known as a solvent recapitalisation plan, will involve an injection of funds and significant debt reductions for the airline.

As part of the deal, shareholders will provide around £600m in support, which includes a £200m investment from Richard Branson’s Virgin Group, which owns 51% of the airline.

Investment management firm Davidson Kempner Capital is also providing £170m of secured financing, while creditors also approved more than £450m in payment deferrals.

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