Virgin Atlantic staff asked to take eight weeks unpaid leave as coronavirus grips world
16 March 2020, 15:47
Virgin Atlantic plans to cut its flight capacity by up to 80 per cent and has asked staff to take eight weeks unpaid leave to reduce costs amid the coronavirus pandemic.
The airline said it will temporarily prioritise "core routes based on customer demand," which has reduced since the Covid-19 outbreak.
The company is majority-owned by multi-billionaire Richard Branson who Forbes estimates has a net worth of $4 billion.
It has asked staff to take unpaid leave in order to reduce short-term costs but so that in the long-term fewer jobs will be lost. The cost of the leave would be spread over six months' salary.
The flight company also announced it will be "permanently" terminating its route between London Heathrow and Newark, New Jersey.
A Virgin Atlantic statement read: "This change amounts (to an) approximately 80 per cent reduction in flights per day by 26 March. As a direct consequence we will be parking approximately 75 per cent of our fleet by 26 March and at points in April will go up to 85 per cent.
"Owing to restrictions to international travel, the airline is reducing services to focus on core routes, depending on customer demand. This will be subject to constant review as the situation evolves.
"Our London Heathrow-Newark route will be permanently terminated with immediate effect."
In response to the announcement, Shadow Education Secretary Angela Rayner demanded Mr Branson sells his private island in the Caribbean in order to cover the cost for employees.
She tweeted: "Richard flog your private island and pay your staff, we are in unprecedented times here. Now is the time your staff need support after making mountains of cash for the company."
Elsewhere, EasyJet confirmed it will introduce "further significant cancellations" as a result of travel restrictions caused by the coronavirus pandemic.
The airline said in a statement: "Due to the unprecedented level of travel restrictions being imposed by governments in response to the coronavirus pandemic and significantly reduced levels of customer demand, easyJet has undertaken further significant cancellations.
"These actions will continue on a rolling basis for the foreseeable future and could result in the grounding of the majority of the easyJet fleet.
"EasyJet will continue to operate rescue flights for short periods where we can, in order to repatriate customers."
British Airways' parent company IAG also announced plans to reduce capacity and "implement voluntary leave options."
It said in a statement: "IAG is implementing further initiatives in response to this challenging market environment.
"Capacity, in terms of available seat kilometres, in the first quarter of 2020 is now expected to be reduced by around 7.5 per cent compared to last year.
"For April and May, the group plans to reduce capacity by at least 75 per cent compared to the same period in 2019.
"IAG is also taking actions to reduce operating expenses and improve cash flow. These include grounding surplus aircraft, reducing and deferring capital spending, cutting non-essential and non-cyber related IT spend, freezing recruitment and discretionary spending, implementing voluntary leave options, temporarily suspending employment contracts and reducing working hours."
Ryanair will also cut its flight schedules due to travel bans imposed by several countries and will implement "significant reductions to working hours."
A statement read: "Ryanair expects the result of these restrictions will be the grounding of the majority of its aircraft fleet across Europe over the next seven to 10 days.
"In those countries where the fleet is not grounded, social distancing restrictions may make flying to all intents and purposes impractical, if not impossible.
"For April and May, Ryanair now expects to reduce its seat capacity by up to 80 per cent, and a full grounding of the fleet cannot be ruled out.
"Ryanair is taking immediate action to reduce operating expenses, and improve cash flows. This will involve grounding surplus aircraft, deferring all capex and share buybacks, freezing recruitment and discretionary spending, and implementing a series of voluntary leave options, temporarily suspending employment contracts, and significant reductions to working hours and payments."
Travel company will also "suspend the vast majority of travel operations until further notice" in order to ensure the safety and welfare of its guests and employees.
This will include package travel, cruises and hotel operations.