Virgin Australia will, under the pending ownership of Bain Capital, cut its workforce from 9000 to 6000, eliminate low cost carrier Tigerair Australia, move to an all-Boeing 737 mainline fleet and shift to a new technology platform, CEO Paul Scurrah announced today.
Scurrah said the failed airline, currently in administration, needed to reset for an uncertain future characterised by lower demand.
“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID levels, with a 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.
“These changes involve some very tough decisions. We expect approximately 3000 roles will be impacted, however our intention is to secure approximately 6000 jobs when the market recovers with aspirations for up to 8000 in the future.
All Boeing 737 Fleet
“To build a successful airline, the Group will align costs with a depressed and uncertain revenue outlook, simplifying its fleet to realise cost efficiencies and remove operational complexity.
“The Group will move to an all-Boeing 737 mainline fleet for domestic and short haul operations, which will see the removal of ATR, Boeing 777, Airbus 330 and Tigerair Airbus A320 aircraft. The Group’s regional and charter fleet will remain.
Tigerair axed but option for new LCC open
“The Tigerair brand will be discontinued (however) Tigerair’s Air Operator’s Certificate and the resources necessary to support the AOC will be retained to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.
“Virgin Australia aims to be the best value carrier in the market, not a low cost carrier. The airline will serve business travellers, including corporates, customers travelling for a holiday, and maintain a two-class cabin offering.
“Backed by Bain Capital, Virgin Australia will have a strong balance sheet to withstand material future shocks to the industry.”
Change of ownership
A Deed of Company Arrangement to be proposed by Bain Capital will be put to a vote at the second creditor’s meeting, which is set for August 26.