Virgin Atlantic Unveils Radical Restructuring

Virgin Atlantic has outlined plans for a radical restructuring as it seeks to secure Government support.

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Virgin Atlantic Boeing 747 Aircraft
Virgin Atlantic Boeing 747 Aircraft (Image Credit: Virgin Atlantic)

Virgin Atlantic has unveiled plans for a radical restructuring as it seeks to secure Government support for a state backed loan.

The airline is in consultation with its trade unions on job cuts of up to 3,150 staff, which is almost a third of its workforce.

Virgin Leaves London Gatwick

Virgin will consolidate its London operations at London Heathrow for the foreseeable future.

The airline has already temporarily transferred operations from Gatwick, where it used to operate routes such as Antigua, Barbados, Grenada, Montego Bay and Orlando, to Heathrow.

The airline had already planned to transfer its service to Havana to Heathrow in June. St Lucia was also due to be suspended in June.

Virgin was due to reinstate a service New York JFK at Gatwick this summer, which will now not happen. Passengers with bookings from Gatwick will be contacted in the coming days with their new flight details.

Virgin plans to lease its slots at Gatwick to enable a return to the airport. Though, with Norwegian also temporarily leaving the airport until 2021 and uncertainty over BA’s presence at the airport, it will be difficult to find airlines willing to operate them.

The departure of Virgin Atlantic from Gatwick is symbolic as it was of course where it launched its first flight to Newark in 1984.

At Heathrow, where the airline has temporarily transferred flights to Terminal 2, Virgin has suspended Newark and cancelled plans to launch Sao Paulo. At present, a planned winter seasonal service to Cape Town is still due to go ahead.

Fleet

Virgin Atlantic will immediately retire its last seven remaining Boeing 747 aircraft.

It will also retire four Airbus A330-200 aircraft by early 2022. Virgin accelerated the retirement of its last three Airbus A340 aircraft earlier this year.

Virgin has not made any comment on plans for the delivery of its remaining Airbus A350-1000 aircraft, which were all due to be delivered by 2021.

The airline remains in discussions with the UK government about state support which could include a loan and a credit guarantee to prevent credit companies from withholding funds. Virgin is also in discussion with third party investors to secure additional finance. Delta, which owns 49% of the airline, says it is unable to provide any financial support.

According to leaked comments from the Treasury, it did not consider Virgin Atlantic’s business plans for the next 2-5 years to be realistic. These deep capacity cuts, along with some form of contribution from its two shareholders, should assist in making a case for state support.

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