Virgin Atlantic is leaving Gatwick, cutting over 3000 jobs and retiring its 747 fleet.
In an attempt to survive the airline has had to accept these previously unthinkable cuts.
Branson’s Virgin Australia has already had to go into voluntary administration, meaning it has had to cease trading as it cannot meet its debts.
Finances
Virgin Atlantic is 51% owned by Richard Branson and 49% owned by Delta Airlines. The airline has been losing money for many years. With the coronavirus crisis it is now burning through incredible amounts of cash with very little income.
The airline is currently being bailed out by the UK taxpayer via the furlough scheme.
Virgin finances have always been controversial. The ultimate owner, Richard Branson, is a billionaire who lives on a Caribbean island and pays no UK income tax. The tax affairs of his Virgin Group ultimately end up in the Caribbean.
There is little sympathy for Branson, but huge amounts for the excellent staff of the airline.
The airline needs £500 million of direct funding to see it through. Branson could just give the £500 million himself or even get a loan from Virgin Money.
Virgin is being supported by the UK tax payer by the government’s Job Retention Scheme.
Leaving Gatwick
Virgin Atlantic is cutting all flights from Gatwick. This is especially painful for airline and airport as Virgin made its maiden flight from Gatwick in 1984.
The airline now plans to operate only from Heathrow but says it intends to retain the slot portfolio at Gatwick for when demand returns.
No mention of how that works. But could be music to British Airways ears!
Job cuts
Virgin proposes to cut 3,150 jobs, a third of its workforce. Of the 3,150 proposed redundancies, 2,000 are pilots and cabin crew. This is despite Virgin using the UK government furlough scheme.
In the last week British Airways, Ryanair and now Virgin Atlantic have collectively announced plans to lay off 18,000 staff, also despite having used the government’s Job Retention Scheme.
Fleet retirements
Virgin Atlantic will permanently ground its fleet of seven Boeing 747 as of now.
4 Airbus A330s will leave in 2022. The fleet will then consist of 36 twin-engine aircraft.
End result
Branson will probably get away with it. He is a smart operator and will surely find some deal that will enable him to keep the airline flying with someone else paying.
Thousands of jobs lost, lives ruined and a billionaire back on his Caribbean paradise.
We can only hope that the UK government makes Branson pay personally from his estimated FOUR BILLION pounds fortune.
And please make him give that island forever for holidays for cancer and kidney patients from the UK. And free flights on Virgin Atlantic.
N.B. Image credit: Virgin Atlantic
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