MIAMI — Virgin Atlantic has announced a plethora of changes to its operation in the post-COVID-19 climate, including the closure of its London Gatwick (LGW) base, the early retirement of the Boeing 747-400, and the reduction of 3,150 jobs.
While efforts to raise additional funding are ongoing, including talks with the government, Virgin Atlantic is also taking action to reduce its costs across all its operating sectors.
Shai Weiss, the airline’s CEO, explained that “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, he said.
“It is crucial that we return to profitability in 2021. This will mean taking steps to reshape and resize Virgin Atlantic in line with demand, while always keeping our people and customers at the heart of all we do.”
Currently, the airline expects the recovery to pre-crisis traffic to take up to three years.
Virgin Atlantic will be consolidating its London area operation to a single base at London-Heathrow (LHR).
“Like British Airways’ recent announcement, the news from Virgin Atlantic today is sad but unsurprising,” said Nick Wyatt, Head of R&A and Travel & Tourism at GlobalData, a leading data and analytics company.
“It is also eerily similar in terms of the detail: warning of job losses and possible cessation of operations at Gatwick. There is a clear point of commonality: becoming smaller, and this mirrors noises coming from major US carriers American Airlines and Delta,” he added.
Despite this move, the airline intends to retain all its slot portfolio at LGW, allowing them to return once the demand is there again.
There is no news on their Manchester base, nor their Scottish bases.
Effective May 5, Virgin Atlantic will no longer use the seven Boeing 747-400 aircraft that remain in its fleet, officially retiring the Queen of the Skies after a very long and successful venture.
In the longer term, the Airbus A330-200 planes that joined Virgin Atlantic from Air Berlin when the German carrier folded will also be retired in early 2022, as planned.
These retirements will leave Virgin Atlantic with 36 twin-engined aircraft, comprised of Airbus A350-1000, A330-300 and Boeing 787-8/787-9.
The airline is keen to point out that the revised fleet will reduce CO2/RTK emissions by an estimated further 10%, building on the 18% efficiency already achieved between 2007-2019.
Staff reduction and redundancies
Regrettably, with troubling financial times come staff reductions. Virgin Atlantic has revealed a plan to reduce 3,150 jobs from across the company.
Throughout the 45-day consultation period beginning May 5, Virgin Atlantic will work closely with the British Airline Pilots’ Association and Unite unions to determine whether more or fewer jobs will be placed under scrutiny.
“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,” Weiss continued.
“I wish it was not the case, but we will have to reduce the number of people we employ. The commitment of our people throughout this crisis has been nothing but amazing, and the embodiment of true Virgin spirit,” he said.
“As we have navigated the COVID-19 crisis, I have been humbled at every step by their solidarity. In times of adversity we must support each other so that ultimately, we can emerge a stronger and better Virgin Atlantic.”
To build a consistent brand across Virgin Atlantic, Virgin Holidays will become Virgin Atlantic Holidays. The brand’s primary focus will continue to be on its partnership with Next and the digital distribution of holidays. About 15% of Virgin Atlantic Holidays retail locations will close in 2020.
Virgin Atlantic Cargo remains unchanged. While its currently supporting global supply chains, particularly around bringing medical supplies and Personal Protective Equipment to the UK throughout the pandemic, the division will continue to provide their services in life after COVID-19.
“Our vision for Virgin Atlantic remains the same – to become the most loved travel company, for our people and our customers. Once the crisis stabilizes, Virgin Atlantic has an important role to play in contributing to the UK’s economic recovery, providing essential connectivity and competition,” Weiss concluded.
Gatwick’s Response to Virgin Atlantic’s plans to leave LGW
In a press relesase, a Gatwick spokesperson said, “We are very saddened to hear the news today about Virgin Atlantic’s plans. We have had a long, close and successful relationship with the airline since it made its maiden flight from Gatwick back in 1984.”
The spokesperson added that Virgin Atlantic would always be welcomed at Gatwick, which will continue its 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.”
“This news will be devastating for its staff and the many local businesses that supply and support the airline at the airport and its HQ in Crawley, however we will continue to work with Virgin Atlantic to get them flying again from Gatwick.”
According to the press release, Gatwick remains confident that the industry will recover as air travel demand returns, and it is very optimistic about the long-term prospects of Gatwick Airport and its resilience as a business.
In addition, the the relase assures that having remained open throughout this pandemic, Gatwick is in a strong position to extend its current operations quickly to meet demand.
Gatwick airport ended its press release on a positive note:
“We will continue to work closely with our other airline partners, including easyJet, the IAG Group, Wizz, TUI and Ryanair to strengthen our business for the future. We also welcome the recent news that another of our major airline partners – Norwegian Airways – has taken important steps forward to secure its future at Gatwick.”
“We look forward to all our airlines flying again soon.”