KEY POINTS

  • These cuts will reduce the airline’s workforce to about 6,000
  • The company’s low-cost Tigerair brand will also be discontinued
  • Bain Capital said it will keep Scurrah as the airline’s CEO

Virgin Australia airlines, which is controlled by U.S. private equity firm Bain Capital, said Wednesday it will slash 3,000 jobs due to “a depressed and uncertain revenue outlook.”

The cuts will reduce the airline’s workforce to about 6,000.

“Formal consultation with unions and employee groups has commenced today, and all options including voluntary redundancy, redeployment, leave without pay and flexible work arrangements will be explored to retain as many jobs as possible,” the airline said.

The carrier will also transition to an all-Boeing 737 mainline fleet for domestic and short-haul operations, eliminating ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft from its fleet.

The company’s low-cost Tigerair brand also will be discontinued.

Virgin Australia went into bankruptcy in April after the federal government refused to provide a bailout.

“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than 3% of last year and ongoing changes to government travel restrictions,” Virgin Australia Group CEO and Managing Director Paul Scurrah said. “Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes.”

Scurrah also warned that even when the aviation industry returns to pre-pandemic levels of activity, “successful airlines will be influenced by demand and look very different than the way they did previously, requiring long-term capital, a lower cost base.”

The Australian Broadcasting Corp. reported that Michael Kaine, national secretary of the Transport Workers' Union, was relieved that Virgin Australia will remain a "full service" airline.

"This has not been an easy process and Virgin workers have worked hard to ensure that instead of going down the route of a low-cost model where more jobs might have gone, Virgin will be able to retain its place in the market and hold onto the vital experience and skills of many of its workers," he said.

Kaine added: "[Unions] have made the case for the maximum number of jobs at the airline and to ensure that it retains the elements that make it competitive and an important option for the travelling public, such as its maximizing jobs.”

Linda White, the assistant national secretary of the Australian Services Union, called the job losses “staggering.”

“Ultimately the company’s plan still sees a staggering number of job losses and cripples the [airline] industry – it’s shattering for workers and will be a huge skill drain for aviation,” she said.

Both union leaders Kaine and White criticized the government of Prime Minister Scott Morrison for failing to bail out Virgin Australia.

“The [prime minister] has seen what the industry will do unassisted – now it needs to get off the bench and save jobs,” White said.

The Guardian reported some voices within Bain Capital had pushed for more job cuts, but was rebuffed by unions.

Bain Capital also said it will keep Scurrah as the airline’s CEO.

"Virgin has a great management team led by Paul Scurrah. We reaffirm that we are backing Paul to successfully lead Virgin through the current turbulence and into the future," Mike Murphy, Bain's managing director, said.