(TAN): The Virgin Australia Group has announced a plan for a more profitable and competitive business as it prepares to exit voluntary administration under the ownership of Bain Capital. However, the group also announced the changes would impact 3,000 current roles.
“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than three per cent of last year and ongoing changes to government travel restrictions. Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world,” said Paul Scurrah, Virgin Australia Group CEO and Managing Director.
[ALSO READ: Radisson Group Opens Its First Resort In The Maldives]
“Loyal customers will be provided the value of their travel credits post administration with validity significantly extended to ensure they have plenty of opportunity to book tickets to their favourite destinations. While these changes are important to manage the impact of COVID-19, they involve some very tough decisions. We expect approximately 3,000 roles will be impacted as a result of the changes. However, our intention is to secure approximately 6,000 jobs when the market recovers with aspirations for up to 8,000 in the future,” Scurrah added.
The group announced that all team members who leave the business will receive their full entitlements and that the group is working with over 100 partners to identify short and long-term redeployment opportunities.
The Key Points:
- Plan for a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration.
- Focus on delivering exceptional experiences at great value with Virgin Australia’s core domestic and short-haul international business.
- Virgin Australia to provide customers with the value of travel credits post administration with validity dates extended for bookings made prior to administration.
- Resetting Virgin Australia to meet lower global and Australian demand. This includes: Reduction in cost base to meet sector uncertainty and COVID-19 market conditions; Securing approximately 6,000 jobs when the market recovers; Simplified all-Boeing 737 mainline fleet and the retention of regional and charter fleet, but removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types; Tigerair Australia brand discontinued with Air Operator Certificate (AOC) retained to provide option for ultra-low-cost operations when market recovers; Continued commitment to regional and charter flying.
[ALSO READ: No COVID-19 Cases Among Visitors Since Egypt Reopened]
“Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market. Our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10-million-member strong Velocity Frequent Flyer program, continuing to offer an extensive network of destinations, a domestic lounge network and value for money for customers,” Scurrah said.
Virgin Australia will provide customers with the value of their travel credits post administration. To preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023.
Customers and travel agents will be notified directly of any flight cancellations associated with the announcements made. Tigerair Australia customers and those affected by any cancellations will be provided a travel credit for use on Virgin Australia operated services.
