Aviation

Virgin Australia flags 750 job cuts following another full-year loss

Huntley Mitchell

Huntley Mitchell

Virgin Australia has announced it will axe 750 jobs after posting a seventh consecutive full-year loss.

The group posted a loss of $315.4 million for the 12 months to 30 June 2019 – admittedly an improvement from its $653.3 million loss in FY18, but still not good news.

Virgin Australia’s earnings before interest, taxes, depreciation and amortisation fell 17 per cent last financial year to $460.8 million, while overall revenue rose eight per cent to $5.8 billion.

Profit attributable to Virgin’s domestic operations fell 10 per cent to $437 million, while earnings from international operations swung from a $10.1 million profit in FY18 to a $58.3 million loss in FY19.

Tigerair recorded a $4.8 million loss in earnings, down from $10.9 million in FY18, while its Velocity Frequent Flyer business – which is set to lose co-investor Affinity Equity Partners – saw 13 per cent earnings growth to $132.4 million.

Virgin Australia group has announced it will cut 750 roles, largely corporate and head office positions, to combat its financial woes.

The company hopes the reduction in workforce will deliver cost savings of $75 million per annum, and it’s anticipated that the majority of affected team members will leave the business by the end of the next financial year.

The new group organisational structure will integrate the corporate, operational and commercial functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia into single functions and points of accountability.

As a result of the restructure, Keith Neate has been appointed as Virgin Australia’s chief financial officer, Stuart Aggs has been named as the permanent chief operations officer after acting in the role since May, and John MacLeod has come onboard as chief commercial officer.

The group is also looking to fill the newly-created role of chief strategy and technology officer.

Virgin Australia group CEO Paul Scurrah said the results were disappointing and underscored the need for change.

“There is no doubt that we are operating in a tough operating climate with high fuel, a low Australian dollar and subdued trading conditions,” he said.

“However, today’s results show that we must improve our financial performance.

“While we have continued to grow revenue and have a strong, loyal customer base, we need to make changes to our costs to ensure we see financial benefit from the growth in our business.

“Today, we have announced a number of changes to help drive business improvement. This includes a restructure of our leadership team to take in groupwide accountability across all brands, a reduction of 750 roles from our workforce, a review of all supplier contracts and agreements, and a fleet and network review which will see a tight focus on capacity management going forward.

Scurrah noted that Virgin had already addressed a number of other business priorities, including the restructure of its Boeing 737 MAX order, which he said deferred a significant amount of capital expenditure.

The airline CEO also said he was “acutely aware” of the impact that the job cuts will have on Virgin’s team.

“However, if we are to position this business for the future, create new opportunities, improve competitiveness, and continue to deliver for our customers, we need to make tough but important decisions that are in the long-term interests of the group,” Scurrah said.

“These are just some of the strategic decisions that have been made to help in the short term. However, there’s more work we need to do on the long-term focus and the positioning of the business.

“We will be focused on being the best value airline for both the corporate and leisure traveller, offering the strong and unique Virgin experience and proposition that we know will appeal to all market segments.

“As I’ve said previously, [the] key to our success is ensuring we strike the right balance between the interest of our team members, customers and our shareholders. We’ll be focused on delivering for all three groups.”

SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

WATCH: Transport Workers’ Union stages ‘alternative’ Qantas AGM, complete with fake Alan Joyce

And by fake Alan Joyce, we mean an unidentified man putting on a very thick Irish accent and coming up with any excuse to say “tink” instead of “think”.

Share

CommentComments

Cruise

Carnival cruise ship rescues 24 people off the coast of Florida

Just because most of the world’s cruise ships are currently out of action doesn’t mean they can’t perform a good deed every now and again.

Share

CommentComments

Wholesalers

Wendy Wu Tours is slinging free flights to Japan!

Who doesn’t love free airfares? Seriously though, point them out to us – we’d like to have a chat with them and find out what their problem is.

Share

CommentComments

Events

Travel DAZE 2020 is just around the corner! Have you registered?

Is your diary looking pretty empty in the first week of November? Well, consider it full now thanks to the only industry event of its scale in Australia this year: Travel DAZE 2020!

Share

CommentComments

Aviation

Air Canada’s longstanding president and CEO to depart, successor revealed

The changing of the guard at airlines continues apace, with Air Canada’s boss the latest to signal their exit.

Share

CommentComments

Travel Agents

AFTA’s Resilient Mind Program yields huge results

It appears alcohol-free days, cold showers and a digital detox are just what the doctor ordered for agents across Australia.

Share

CommentComments

Destinations

Queensland brewing company creates ‘The Big Slab’ attraction to boost state’s tourism industry

This bizarre new attraction has already drawn the likes of surfing legend Mick Fanning and his baby boy, and we have photographic evidence to prove it.

Share

CommentComments

Hotels

Club Med gets into the gift card game

This Christmas, your clients can treat friends and family with the gift of a much-needed holiday AND give you a tidy commission in one go!

Share

CommentComments

Aviation

Bombshells emerge over Western Sydney Airport land deal, as AFP investigates

The stench around the ‘Leppington Triangle’ deal, which saw taxpayers fork out 10 times what the land was valued as, is getting worse by the day.

Share

CommentComments

Technology

Australia’s incoming passenger cards to get the chop

Are you one of those people who never seems to have a pen handy to fill out the incoming passenger card post-flight? Rejoice here.

Share

CommentComments

Aviation

Airline embroiled in website scam duping travellers with fake tickets

Have you purchased some too-good-to-be-true-airfares for your clients recently? You might want to read this.

Share

CommentComments

Destinations

Tourism Fiji’s CEO to exit

After four-and-a-half years at the helm, Matt Stoeckel is saying ‘ni sa moce’ to Tourism Fiji.

Share

CommentComments