Virgin Atlantic Cuts More Than 3,000 Jobs, Shutters Operations At Gatwick

Virgin Atlantic, the beleaguered British airliner partly owned by Sir Richard Branson, said it plans to cut 3.150 jobs and move all of its London operations to Heathrow Airport while shuttering its activities at Gatwick Airport.

Gatwick, which is located south of London, had been Virgin Atlantic’s home base for 35 years. However, Virgin Atlantic said it will retain its landing slots at Gatwick in the event air travel demand returns.

Virgin Atlantic, which is seeking emergency loans from the British government, currently has about 10,000 employees.

"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," said Virgin Atlantic chief executive Shai Weiss. “To safeguard our future and emerge [as] 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. It is crucial that we return to profitability in 2021.”

Weiss added: "After 9/11 and the global financial crisis [of 2008], we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years. Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time."

Virgin Atlantic also said it plans to reduce the size of its fleet to 36 from 43 by the summer of 2022 through the retirement of its Boeing 747 aircraft.

The British Airline Pilots’ Association union, or BALPA, said the job losses are “devastating.”

“BALPA is doing all it can to support members affected,” the union stated. “There are 426 pilots at risk. This is another terrible blow for the industry and is evidence of the dire situation facing U.K. aviation. Without immediate action by the government we will see the once world leading industry decimated and that will have an effect throughout the U.K. economy and to all the other industries that rely on aviation.”

BALPA General Secretary Brian Strutton said: “Our members and all staff in Virgin Atlantic will be shocked by the scale of this bombshell. We will be challenging Virgin very hard to justify this.”

Strutton also criticized the British government for failing to provide Virgin Atlantic a financial lifeline.

“Why is the government sitting on its hands while aviation plunges further towards a death spiral? Government should call a moratorium on job losses in aviation and lead a planned recovery,” he added.

British Airways recently cut 12,000 jobs, while Ryanair slashed 3,000 from its payroll.

Tom Burridge, the transportation analyst at BBC News, wrote: “The U.K.'s aviation sector is shrinking in size. No airline or airport is immune. Virgin Atlantic was Gatwick's ninth-largest airline, so it's a blow, but not a knock-out punch. However, British Airways, which is Gatwick's second-biggest customer, has indicated that it also might not restart its Gatwick operation. If BA does pull out, it would carry deeper ramifications.”

Burridge added: “When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and sadly thousands of cabin crew, pilots and ground staff will have lost their jobs. And the consensus is that it will take years for the aviation sector to bounce back to where it was before the pandemic.”

It remains unclear if Virgin Atlantic will receive financial aid from the UK government, which has already said some companies should first seek help from deep-pocketed shareholders before coming to the state as a last resort. Branson has been pleading for a commercial loan from the government, even offering his private Caribbean island home as collateral.

Moreover, Virgin Atlantic is also partly-owned by Delta Airlines (DAL) which will receive a bailout from the U.S. government.

Jim McMahon, a Member of Parliament and Labour’s Shadow Transport Secretary, has asked the British government to rescue the airline industry.

“This terrible news is heartbreaking for Virgin Atlantic staff and their families, and another major blow for the aviation industry,” he said. “The government is failing workers by not stepping in and protecting these jobs. Labour has consistently argued for a sector-specific deal for aviation, and the government must do more to ensure airlines and airports can operate safely when the time is right to transition out of the lockdown.”

Last month, John Harrison, general counsel and U.K. chairman of Airbus, warned that if Virgin Atlantic collapsed it could have an “extremely negative impact” on its A330 aircraft manufacturing program.

"All wings for these aircraft are designed and manufactured in the U.K., and orders from airlines like Virgin are vital for the continuation of our business," Harrison said.