Virgin Atlantic announced on Monday that the company is taking drastic measures to safeguard the carrier’s future due to government travel restrictions and declining demand resulting from the global COVID-19 pandemic.
Today, Virgin Atlantic announced that they are taking further austerity measures to safeguard their financial future due to increasing travel restrictions and diminishing demand resulting from the global COVID-19 pandemic. With countries closing their borders and the US recently banning travel from the European Schengen Area countries, the UK and Ireland, demand continues to drop precipitously. Therefore, Virgin Atlantic is taking drastic cash preservation and cost controlling measures. The European Union has suspended the 80/20 ‘use it or lose it’ slot rules until June 30, 2020, thereby enabling the carrier to consolidate scheduled and ground aircraft immediately. In Monday’s announcement, a Virgin Atlantic spokesperson commented,
“The aviation industry is facing unprecedented pressure. We are appealing to the Government emissions for clear, decisive and unwavering support. Our industry needs emergency credit facilities to a value of £5-7 billion, to bolster confidence and to prevent credit card processors from withholding customer payments. We also need slot alleviation for the full summer 2020 season, so we can match supply to demand – reducing costs and preventing unviable flying and corresponding CO2 emissions. With this support, airlines including Virgin Atlantic, can weather this storm and emerge in a position to assist the nation’s economic recovery and provide the passenger and cargo connectivity that business and people across the country rely on.”
Starting Tuesday, March 17, 2020, Virgin Atlantic will prioritize core routes based on demand, and ultimately reduce capacity by 80% by March 26, 2020. The carrier will therefore park around 75% of their fleet by March 26th, increasing to 85% by April. The airline has also permanently terminated their London-Heathrow (LHR) to New York-Newark (EWR) route effective immediately. Because of the current restriction on international travel, the carrier is also asking staff to take eight weeks of unpaid leave over the next three months, with the cost spread over six month’s salary to help the company reduce costs without cutting jobs. Additionally, pay increases will be deferred until further review in January 2021 and employer pension contributions will be reduced for a year. Virgin Atlantic will continue to offer an enhanced sick pay policy, but benefits have been reduced to 12 weeks of full pay.
Adding to austerity measures announced on March 4, 2020, the carrier has also implemented a company-wide recruitment freeze, a restriction has been placed on non-essential travel and training and is proposing a deferral of annual pay increases from March until August, for reassessment.
Source: Virgin Atlantic
Editor's Note: We stand by the entire Virgin Atlantic team and all airlines during this difficult period as the entire world fights to limit the transmission of, and ultimately recover from, the global COVID-19 pandemic. Once it has been defeated, we look forward to the emergence of an even stronger and more robust global commercial airline industry.