CEO Paul Scurrah hopes to rehire outgoing staff ‘when the market recovers’
Rebranding as a “value airline,” Virgin Australia will slash 3,000 jobs and discontinue Tigerair Australia as a result of the slowdown in air travel due to COVID-19.
US private equity firm Bain Capital agreed to buy the struggling carrier, but the firm now plans to cut the fleet by half. The retrenchment affects a third of the workforce, including ground and cabin crew members, engineers and office employees.
Virgin Australia CEO Paul Scurrah warned there could be more job cuts as the airline scales back international operations and pivots towards domestic and short-haul flights as part of its recovery.
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“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,” he said.
Despite the downturn, the CEO hopes to rehire retrenched staff once the company is ready for expansion. “Our intention is to secure approximately 6,000 jobs when the market recovers – with aspirations for up to 8,000 in the future,” Scurrah said.
“To those that leave the business, I want to thank them for the role they’ve played in making this a great airline,” he said, recalling Virgin employees’ “incredible resilience under tough circumstances”.
Virgin Australia is offering voluntary redundancy packages, and will provide terminated employees access to long-service and retiree benefits along with travel perks for up to two years.
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As a farewell gift, Virgin Australia’s billionaire co-founder Sir Richard Branson will reportedly send outgoing employees a personally signed photo of a Virgin Australia aircraft.
Michael Kaine, national secretary of the Transport Workers’ Union, pledged to support Virgin workers amid the job cuts.
“This has not been an easy process and Virgin workers have worked hard to ensure that instead of going down the route of a low-cost model where more jobs might have gone, Virgin will be able to retain its place in the market and hold onto the vital experience and skills of many of its workers,” Kaine said.
In April, the airline entered voluntary administration after the federal government turned down its requests for bailout.