Virgin Australia has announced plans to sack 3,000 of its 9,000 workers as part of a restructuring developed by its new owner, Bain Capital. Chief executive Paul Scurrah admitted he could not guarantee there would be no further redundancies.
The airline will reduce its aircraft fleet by half, from around 130 planes to between 60 and 80 Boeing 737s, and will discontinue the Tigerair Australia brand, although it will retain the operating certificate to potentially relaunch ultra-low-cost services later. For now, Virgin will focus on domestic flights, keeping two classes of travel and airport lounges.
The company will cut office space, moving its Brisbane headquarters from Bowen Hills to Southbank to co-locate with Flight Centre. The Velocity frequent flyer scheme will continue, and customers with credits for cancelled flights can use them after Bain takes full control next month, but credits cannot be redeemed for cash, said administrator Vaughan Strawbridge.
Unions criticised the job losses, calling for direct government support for aviation, but Transport Workers' Union national secretary Michael Kaine described the restart plan as a “glimmer of hope”. Scurrah said domestic air travel may take three years to recover to pre-pandemic levels, with international travel returning “very slowly”.
He noted that talks with Boeing over the order for 48 737 MAX planes were ongoing, and the aircraft remain grounded after two fatal crashes. Scurrah declined to specify the airline's cash reserves but said Bain would keep debt low.
Former Jetstar boss Jayne Hrdlicka, who advised Bain, will not take an executive role at the new Virgin Australia, Scurrah confirmed. Creditors are due to vote on the restructuring on 5 September.
