Virgin Atlantic is planning to cut a further 1,150 jobs across the company and offer a furlough scheme for cabin crew as part of a restructuring plan as it completes a £1.2 billion recapitalization deal, the carrier announced.
The airline's plan formally was approved this week by courts in the U.K. and U.S., putting it in a position "to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies," according to the company. The deal includes £400 million in new cash, £200 million of which will be provided by Sir Richard Branson's Virgin Group.
As part of the recapitalization, Virgin Atlantic will implement a restructuring plan with the support of majority owners Virgin Group and Delta Air Lines.
However, with travel restrictions continuing for transatlantic journeys, the airline said it is planning for a scenario in which operations between the U.K. and U.S. do not extend beyond "current skeleton operations" until 2021. In this scenario, Q4 capacity across the network would be around 25 percent of 2019 levels, with 2021 revenue potentially only hitting 50 percent of what the airline achieved in 2019.
As such, Virgin Atlantic said it will begin formal consultations with the Unite and BALPA unions over a further 1,150 job cuts in addition to the more than 3,500 redundancies it already has made as a result of the coronavirus crisis.
To mitigate as many cabin crew redundancies as possible, the airline said it will offer a voluntary, company-led and financed furlough scheme for an additional 600 crew when the U.K. government-funded Coronavirus Job Retention Scheme ends in October. However, should the government extend its own scheme, the airline will continue to use it.
Virgin Atlantic CEO Shai Weiss said: "The completion of the private-only, solvent recapitalization of Virgin Atlantic removes much of the uncertainty we faced and represents a major step forward in our fight for our survival.
"Now we must focus our efforts on securing our long-term future, by ensuring that Virgin Atlantic not only survives but thrives as passenger demand returns.
"After the sacrifices so many of our people have made, further reducing the number of people we employ is heartbreaking but essential for survival. I truly hope that as demand returns, we will see many members of our team returning to us. … There will be a recovery, the timing and speed of which is uncertain."
Weiss also repeated the airline's support of airport coronavirus testing as a way to open up transatlantic flying, a key market for Virgin Atlantic accounting for 70 percent of its network.
Originally published by BTN Europe.