Virgin Australia has revealed plans to make about a third of its workforce redundant, with approximately 3,000 jobs expected to go under new owners Bain Capital, while 6,000 staff remain.
The private equity firm’s plan for the airline sees the end of the Tiger Australia brand, although Virgin Australia said it would retain the air operator certificate so it could revive a low-cost carrier when the domestic holiday travel market fully recovered.
A key part of the plan is to operate an all Boeing 737 mainline fleet, with other aircraft types restricted to regional routes and charters.
This will mean removing ATRs, Boeing 777s, Airbus A330s and Tiger’s Airbus A320s from the airline’s fleet.
Virgin Australia chief executive Paul Scurrah said the airline had no choice but to shrink to survive amid the COVID-19 pandemic.
“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 in a statement.
“Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market.
“We believe that over time we can set the foundations to grow Virgin Australia again and re-employ many of the highly skilled Virgin Australia team.”
Mr Scurrah said the airline plans to employ around 6,000 people “when the market recovers, with aspirations for up to 8,000 in the future”.
Virgin Australia said redundant staff would have their entitlements honoured and receive a two-year extension of employee travel benefits.
More to come.