Wednesday 28 August 2019

Virgin Australia to slash 750 jobs

                      VIRGIN AUSTRALIA                             File Photo

Virgin Australia has announced it is cutting 750 corporate and head office jobs as part of a restructuring plan forced on the struggling airline that will also include the axing of uneconomic routes. The airline is not only going to sack 750 office workers but it is preparing to axe routes from its network as its new boss looks to save money and pull the ailing airline out of its financial nosedive. Paul Scurrah, who took over as the airline's chief executive in late March, said "nothing will be off the table" in a review underway into where the airline flies, how frequently and in what aircraft. “We are focused on getting the business into profit as soon as possible, which will take some further tough decisions," Mr Scurrah said on Wednesday after handing down a $315 million full-year loss. "We do expect that we will make network changes on the back of that analysis. That could be a withdrawal from a market or a reduction in frequency or a combination of both." After posting a “disappointing” full-year loss of $349.1m on Wednesday, Virgin said the “challenging trading environment” had been compounded by headwinds such as increased fuel prices and the weak Australian dollar. “There is no doubt that we are operating in a tough economic climate with high fuel, a low Australian dollar and subdued trading conditions,” Virgin Australia chief executive Paul Scurrah said.

TIGERAIR A320-232 VH-XUH (CN 6749)             File Photo

The group, which includes the budget carrier Tigerair, will undergo what Scurrah called a “rightsizing” program which would see the jobs cut from the total of around 10,000 employees. The majority of job losses look set to be borne by staff at the airline’s headquarters in Brisbane. Although revenue for the 12 months to 30 June rose 7.5% to $5.83bn as it added passengers, it was not enough to prevent the group recording its seventh consecutive year of losses. Movements in the fuel price and the Australian dollar cost the company $158.8m. Its international business went into the red by $58.3m after heavy investment in new routes to New Zealand and Hong Kong.  The airline’s restructuring, which aims to save $75m a year, includes a shakeup of the top executive team involving the departure of the chief financial officer, chief operations officer and chief commercial officer. The boss of Tigerair, Merren McArthur, will also leave the company as her role will disappear under the changes. The airline’s three distinct parts – Virgin Australia, Virgin Australia Regional Airlines and Tigerair – will have their operations merged under the restructure, although the brands will survive.

Below is the break down of Virgin Australia owners
  • Nanshan Group (22.4%)
  • Etihad Airways (21%)
  • Singapore Airlines (19.8%)
  • HNA Group (13%)
  • Virgin Group (8%)

  • Part of this story was sourced from here

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