British airline Virgin Atlantic is planning to shed 1,150 jobs and put around 600 cabin crew on extended furlough beyond October. The news comes in wake of a £1.2bn rescue plan signed off by a US court.
A Virgin Atlantic spokesperson told media that the development was heartbreaking but essential for the survival of the airline which is facing tough situation since the outbreak of coronavirus and international travel restrictions that saw its customer base dwindling. The airline had cut 3,150 jobs earlier this year in March.
Earlier this week the airline obtained court approval for its refinancing package with which it could run its operations for the next one-and-a-half year. The package includes a pledge of £200m from Sir Richard Branson’s Virgin Group, the airline’s biggest shareholder, and creditors agreeing to reduce and defer Virgin Atlantic’s debts.
The airline is gearing up for business; it will restart flights to Pakistan in a hope to make up for the losses in the US route which is largely blocked for international travellers.
Shai Weiss, Virgin Atlantic’s chief executive said that it was a mixed day as the company achieved what many thought impossible. The completion of the private-only, solvent recapitalization of Virgin Atlantic removes much of the uncertainty it faced and represented a major step forward in the fight for survival.
Virgin Atlantic will fund its own furlough scheme for the 600 crew members from October if the government’s job retention scheme is not extended.