Virgin Atlantic shares steps to secure future

Virgin Atlantic Boeing 787-9 Dreamliner
Image from Virgin Atlantic
Headshot of Greg Rose
by Greg Rose
3 September 2020

Virgin Atlantic has announced the completion of the £1.2bn private-only solvent recapitalisation of its airline and holiday business, a major step forward in securing its future.

The Restructuring Plan has been sanctioned by the English High Court and formally recognised in the US court. This final step in the legal process paves the way for the company to continue its efforts to emerge from the COVID-19 crisis a sustainably profitable airline.

Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel. The airline will implement its Restructuring Plan with the support of Virgin Group and Delta, existing creditors and new private investors, keeping Virgin Atlantic flying and providing essential competition and connectivity to customers.

However, the devastating impact of Covid-19 on global aviation continues unabated and the airline must take further steps to ensure survival. The last six months have been the most challenging in Virgin Atlantic’s history. Even in the toughest times, the people of Virgin Atlantic are what sets it apart and they have made tremendous sacrifices. Unfortunately, despite actions already taken to reshape and resize the business, regrettably the airline must go further one last time with changes at scale, to ensure it emerges from this crisis.

a Virgin Atlantic A350
Image from Virgin Atlantic

Today it is announcing further downsizing across the business, with a planned reduction of 1,150 jobs across all functions. Working closely with unions Unite and BALPA, a company-wide consultation period of 45 days begins today. To mitigate as many cabin crew redundancies as possible, additionally, 600 crew will have the option of a voluntary, Company led and financed furlough scheme when HM Government’s Coronavirus Job Retention Scheme ends at the end of October. Should HM Government extend its Scheme, the airline intends to use it for as long as possible.

Shai Weiss, Virgin Atlantic CEO, commented:  “Together, we have achieved what many thought impossible and that is down to the efforts and sacrifices of so many across the Company. The completion of the privateonly, solvent recapitalisation of Virgin Atlantic removes much of the uncertainty we faced and represents a major step forward in our fight for survival. We greatly appreciate the support of our shareholders, creditors and new private investors and together, we will ensure that the airline continues to provide vital connectivity and competition. 

“Now we must focus our efforts on securing our long-term future, by ensuring that Virgin Atlantic not only survives but thrives as passenger demand returns. It’s clear that the introduction of passenger testing is the only way to enable the removal of travel restrictions and open up flying to key markets, while protecting public health. We will continue to work with our industry partners to press for urgent government action. 

“After the sacrifices so many of our people have made, further reducing the number of people we employ is heart-breaking but essential for survival. I truly hope that as demand returns, we will see many members of our team returning to us. The unique spirit of our people, the passion we have for our customers and each other, and the drive to do things better has been tested but not broken. There will be a recovery, the timing and speed of which is uncertain. When our customers return to the skies we will be there to welcome them onboard with belief in our future. It is then that we will appreciate that everything we have done, painful to so many, was worth it.” 

On the back of the continued success of Virgin Atlantic Cargo operations, the restart of skeleton passenger operations has been an important milestone to achieve. Flights to New York JFK, Los Angeles, Hong Kong, Barbados, Shanghai, Miami and Delhi have restarted so far, with Tel Aviv restarting on Sunday and Atlanta, Mumbai and Lagos following during September. As countries around the world start to relax travel restrictions, additional routes will added throughout 2020 followed by a further, gradual recovery through 2021 in line with customer demand.

Head over to Virgin Atlantic to find out more about routes and book a flight.