Virgin Atlantic cuts 500 jobs. But what happens next?

The big aviation story today has of course been the release of the Airports Commission report on the expansion of airport runway capacity in London and the South East.

A cynic might therefore wonder whether it was no coincidence that Virgin Atlantic chose to announce in the past 24 hours that it is to cut 500 jobs, all of which will be from back office roles.

A company choosing to make itself more efficient through reducing management and administrative posts isn’t in itself that noteworthy. Indeed, it’s been a fact of corporate life for many decades.

However, in the context of Virgin Atlantic a reduction of 500 posts is significant.

According to Virgin’s last published financial statements (to December 2014) it employs just over 8,000 people with approximately 1,000 employees occupying management and administration roles.

Virgin Atlantic is now 49% owned by Delta Airlines. We have already seen the influence of Delta with Virgin suspending routes to Cape Town, Mumbai, Tokyo and Vancouver in favour of increased flying to the United States. Virgin has also announced the closure of its Little Red domestic operation.

We can’t help but wonder whether this latest move presages more integration between Virgin and Delta with (and we emphasise this is pure speculation) Delta taking on more back office tasks such as IT, revenue management, and loyalty programmes from Virgin Atlantic.

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