Covid-19: Virgin Atlantic to cut 3,000 jobs and shut down Gatwick operations
Date added: 5 May, 2020
Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick airport, due to the collapse in air travel demand because of the Covid-19 pandemic. This comes soon after rival British Airways said it could not rule out closing its Gatwick operation. Virgin was Gatwick’s 9th largest airline, while British Airways was the 2nd largest, after EasyJet, which is largest – Norwegian is 3rd largest. Virgin Atlantic said it will move its flying programme from Gatwick to Heathrow, but it intends to keep its slots at Gatwick “so it can return in line with customer demand”. The job losses amount to about 30% of the total (the job losses at BA are 28%). Virgin Atlantic also plans to reduce the size of its aircraft fleet from 45 to 35 by the summer of 2022. Even the lobby group, Airlines UK admits that “Airlines are having to adapt to a sector that will be smaller and leaner in future, with no guarantees as to when we will return to pre-crisis levels.” When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and thousands of job losses. The area around Gatwick was too dependent on the airport for jobs etc.
Coronavirus: Virgin Atlantic to cut 3,000 jobs and quit Gatwick
5.5.2020 (BBC)
Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick airport.
The shock announcement comes after rival British Airways said it could not rule out closing its Gatwick operation. Pilots’ union Balpa described it as “devastating”.
Many airlines have been struggling as the coronavirus pandemic has brought global travel to a virtual standstill.
The airline currently employs a total of about 10,000 people.
Virgin Atlantic, which is in the process of applying for emergency loans from the government, said that jobs will be lost across the board.
“We have weathered many storms since our first flight 36 years ago but none has been as devastating as Covid-19 and the associated loss of life and livelihood for so many,” said Virgin Atlantic chief executive Shai Weiss.
‘Dire situation’
Balpa the union said: “This is another terrible blow for the industry and is evidence of the dire situation facing UK aviation.
Balpa general secretary, Brian Strutton, said: “Our members and all staff in Virgin Atlantic will be shocked by the scale of this bombshell. We will be challenging Virgin very hard to justify this.”
Virgin Atlantic also said it will move its flying programme from Gatwick to Heathrow. It said it intended to keep its slots at Gatwick “so it can return in line with customer demand”.
However, Mr Weiss said there was no certainty when the air travel industry would recover from the coronavirus crisis.
“After 9/11 and the global financial crisis, we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years.
“Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time.”
Gatwick said the company was “very saddened” to hear of Virgin Atlantic’s plans.
The airline has flown from the airport since 1984, and Gatwick said: “Virgin Atlantic will always be welcome at Gatwick and we will continue our efforts to explore ways to restart the airline’s operations as soon as possible, in the knowledge that they intend to retain their slot portfolio at Gatwick for when demand returns.”
Tim Alderslade, chief executive of aviation industry group Airlines UK, said: “The challenges facing UK aviation cannot be overstated. There is currently close to zero passenger demand and many airlines have ceased operations altogether.
“We do not know when countries will start to reopen their borders, or whether restrictions will remain in place for some time.
“Airlines are having to adapt to a sector that will be smaller and leaner in future, with no guarantees as to when we will return to pre-crisis levels.”
It was 28% at British Airways. Now 30% of jobs will be lost at Virgin Atlantic.
The UK’s aviation sector is shrinking in size. No airline or airport is immune.
Virgin Atlantic was Gatwick’s ninth-largest airline, so it’s a blow, but not a knock-out punch.
However, British Airways, which is Gatwick’s second-biggest customer, has indicated that it also might not restart its Gatwick operation.
If BA does pull out, it would carry deeper ramifications.
Just a few weeks ago, several UK airports had elaborate, expensive and very controversial expansion plans in the pipeline. The big ones were operating at or very near capacity.
But the whole aviation sector is living a new reality.
When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and sadly thousands of cabin crew, pilots and ground staff will have lost their jobs.
And the consensus is that it will take years for the aviation sector to bounce back to where it was before the pandemic.
Commenting on its own future, Gatwick said: “We remain very optimistic about the long-term prospects of Gatwick Airport and our resilience as a business, and having remained open throughout this pandemic we are in a strong position to extend our current operations quickly to meet demand.”
Other airlines have already announced that they intend to cut jobs because of the collapse in demand for travel due to the coronavirus pandemic.
Last week, British Airways said it was set to cut up to 12,000 jobs from its 42,000-strong workforce. It also told staff that its Gatwick airport operation might not reopen after the pandemic passes.
Ryanair has also said it will cut 3,000 jobs – 15% of its workforce – with boss Michael O’Leary saying the move was “the minimum that we need just to survive the next 12 months”.
Virgin Atlantic said it had begun a 45-day consultation period on the job losses with unions Balpa and Unite.
Virgin Atlantic also plans to reduce the size of its fleet of aircraft from 45 to 35 by the summer of 2022.
It hopes to restore about 60% of its pre-pandemic flying capacity by the end of 2020.
Meanwhile, the airline industry has said it must be ready with a series of measures to prevent the spread of coronavirus before air travel can resume.
The International Air Transport Association (IATA) said it recommended mandatory face-coverings for passengers and masks for crew, as one of several actions to reduce what it called “the already low risk of contracting Covid-19 on board aircraft”. [Claims that the risk of infection on a plane are very dubious. Loganair’s chief executive, Jonathan Hinkles, today said social distancing on board was impossible, due to: 1. The economic cost. 2). The air conditioning systems on aircraft that recycle air in the cabin, which defeated the purpose of social distancing. See link https://www.bbc.co.uk/news/uk-northern-ireland-52539141 ]
Virgin Atlantic plans to cut more than 3,000 jobs and shut its operations at Gatwick airport in the latest sign of the chaos caused in the airline industry by the coronavirus.
The 3,150 planned redundancies represent almost one in three of Virgin Atlantic’s workforce of 10,000, prompting calls from unions and Labour for the government to step in to save the jobs.
Airlines across the world have been rocked by the grounding of flights as a result of the pandemic lockdowns, which have put their business models in jeopardy.
Virgin Atlantic’s job cuts are the latest blow to the UK and Irish aviation industries, with tens of thousands of redundancies planned. International Airlines Group plans to cut 12,000 jobs at British Airways and 900 at Aer Lingus. Irish budget carrier Ryanair has also announced 3,000 job losses, while aerospace manufacturer Rolls-Royce is considering as many as 8,000 redundancies.
At the time of the lockdown, according to flight schedules data research by Cirium, the airline was operating 422 flights per week and carrying more than 100,000 passengers. In February Virgin accounted for 19% of the capacity crossing the Atlantic, with 258 weekly flights – second only to British Airways
Sir Richard Branson, the airline’s founder, has asked for a bailout but the UK government is unwilling to provide a separate package for airlines beyond the help offered to all businesses.
However, the Labour party called on the government to step in to protect the jobs of Virgin Atlantic employees.
“The government is failing workers by not stepping in and protecting these jobs,” said Jim McMahon, the shadow transport secretary. “Labour has consistently argued for a sector-specific deal for aviation, and the government must do more to ensure airlines and airports can operate safely when the time is right to transition out of the lockdown.”
Virgin Atlantic’s efforts to secure a bailout were thought to be hindered by the fact that US airline Delta Air Lines, which owns 49% of the company, had not injected more money.
Activists have expressed concerns that government funds should not be used to bail out Virgin because majority owner Branson is a billionaire who is not resident in the UK for tax purposes.
Branson last month pledged to mortgage his Caribbean island to help raise money for his stricken Virgin Group, promising to inject $250m into the company mostly to help the airline.
Campaigners have also raised concerns that a bailout of polluting airlines would impede progress on fighting the climate crisis.
European airlines have so far received pledges of more than €26bn of government support.
Union representatives said the Virgin job cuts represented “another devastating blow” for UK aviation, adding that cuts were premature while the government was still paying 80% of furloughed workers’ wages.
The announcement also added to concerns about the future of jobs at Gatwick airport. British Airways has cut back Gatwick operations and warned it could pull out altogether, while Norwegian Air Shuttle, the airport’s third-largest carrier, narrowly avoided bankruptcy after investors and creditors agreed a plan that will allow it to access state aid.
Diana Holland, the assistant general secretary of the Unite union, said she had “grave concerns about the impact on Gatwick airport”.
A Gatwick spokesman said the airport remained “very optimistic about the long-term prospects of Gatwick airport and our resilience as a business.”. He added that Virgin Atlantic would retain its flight slots at the airport so could return when demand recovers. The airline flies mostly to holiday destinations, including St Lucia, Barnados and Orlando, from Gatwick.
Alongside the job cuts, subject to consultation, Virgin will significantly restructure its operations. It will immediately retire its seven 747 jumbo jets, and move Gatwick flights to London Heathrow, while retaining its base in Manchester.
Shai Weiss, Virgin Atlantic’s chief executive, said: “To safeguard our future and emerge a sustainably profitable business, now is the time for further action to reduce our costs, preserve cash and to protect as many jobs as possible. It is crucial that we return to profitability in 2021.
“After 9/11 and the global financial crisis we took similar painful measures, but fortunately many members of our team were back flying with us within a couple of years.
“Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time.”
The Department for Transport has been approached for comment.
Chancellor tells airlines that the government will not bail them out, due to Covid-19 crisis
March 26, 2020
Rishi Sunak, the chancellor, has written to the airlines and airports, warning that there would be no sector-wide rescue to prevent companies going out of business because of coronavirus. He insisted that further taxpayer support for the sector would only be possible once they had “exhausted other options” including raising money from shareholders, investors and banks. Companies have been told to access funding already announced last week, including monthly payments of up to £2,500 for every employee temporarily laid off because of the crisis. In his letter he said that airlines and airports could only seek “bespoke” support from the Treasury as a “last resort”, with no guarantee of further help. The comments follow criticism levelled at Easyjet after it paid shareholders £174 million in dividends last week, despite appealing for taxpayer support. Sir Richard Branson, has also been attacked after the airline told staff to take 8 weeks of unpaid leave. He has since promised to invest £215 million to support his Virgin Group business. Many airlines may go bankrupt due to the virus crisis. Some of the smaller airports may close, and larger airports partly close temporarily.
