Virgin Australia to cut 3,000 jobs under new owner
SYDNEY (BLOOMBERG) - Virgin Australia Holdings will cut a third of its workforce under the ownership of Bain Capital as the buyout firm attempts to resurrect the airline during the industry's worst-ever crisis.. Read more at straitstimes.com.
Virgin said on Wednesday (Aug 5) the 3,000 jobs would go as the carrier offloads its fleets of Boeing 777s, Airbus A330s and ATR turboprops, as well as low-cost brand Tigerair Australia and its A320s."Our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10-million-member strong Velocity Frequent Flyer programme, continuing to offer an extensive network of destinations, a domestic lounge network and value for money for customers," chief executive Paul Scurrah said in a statement.
The coronavirus pandemic was the final straw for Australia's second biggest airline, which had been unprofitable for seven consecutive years.Larger rival Qantas Airways has also announced plans to cut at least 20 per cent of its workforce due to the decline in demand caused by the pandemic and associated travel restrictions.
Administrators fast-tracked an auction before Virgin Australia's cash ran dry and agreed to sell the airline to Bain in June. Virgin Australia was almost entirely owned by four foreign aviation groups - Singapore Airlines, Etihad Airways, HNA Group and Nanshan Group - that each held 20 per cent stakes. headtopics.com
Creditors, who are owed A$6.8 billion (S$6.7 billion) are due to vote on the sale by early next month. Unsecured bondholders have said they will propose an alternative debt-to-equity swap, which would also be put to a vote at the meeting.A deal would need the approval of at least 50 per cent of creditors by both value and number. Employees rank as the largest creditors by number at around 9,000, followed by around 6,000 bondholders.
Mr Scurrah said under Bain's ownership Virgin would have a strong balance sheet worth of an investment-grade rating, which it had lacked before entering administration.Bain said it was backing Mr Scurrah to remain in his role in the future. Read more: The Straits Times »
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