VIRGIN Australia Group will be “reset”, with Tigerair Australia and one third of its workforce to be cut as it comes out of voluntary administration under its new owner Bain Capital.
The company revealed its plans this morning (TD breaking news), which will see it overhaul and simplify its cost base and aim to be “the best value carrier in the market, not a low-cost carrier”.
Its initial focus will be on domestic and short-haul international operations and it will serve business travellers, including corporates, and customers travelling for a holiday and to visit family.
The Tigerair Australia brand will cease to operate in the Australian market, “as there is not sufficient demand to support two brands at this time,” the group said.
The door will be left open to operate an ultra-low-cost-carrier in the future when the domestic market can sustain it, with TT’s Air Operating Certificate (AOC) and necessary resources to maintain the AOC to be retained.
Tigerair customers affected will retain their travel credit to be used on Virgin Australia services.
Virgin Australia Group will reduce its workforce by 3,000 people, primarily from the operation functions and corporate roles.
CEO Paul Scurrah outlined plans to retain 6,000 jobs “when the market recovers” and an aspiration to grow the workforce to 8,000 in the future.
However, he also flagged expectations that it may take at least three years until demand for domestic and short-haul international travel returns to pre-COVID-19 levels, with “the real chance it could be longer”.
Scurrah said departing staff would be “closely supported through our alumni program, have all their entitlements honoured and be provided with a two-year extension of employee travel benefits and early access to retiree and long-service benefits”.
Those who remain stood down are on leave without pay and will continue to receive JobKeeper until it expires in Mar.
As part of its efforts towards cost efficiency and simplifying its fleet, VA will move to an all-Boeing 737 mainline fleet for domestic and short-haul operations, removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types.
The regional and charter fleet will remain, while options at Virgin Australia Regional Airlines (VARA) are assessed, including different operating models.
Long-haul int’l ops will remain suspended & the group will take on a supplier contract review.
VA will also maintain a network of lounges in key domestic locations, with plans to reopen when demand returns.
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Source: traveldaily