Virgin Atlantic is to axe up to 500 staff in an attempt to keep the airline’s rocky finances on track.
Sir Richard Branson’s airline said it would be “structuring the business in a simpler, more efficient way” by cutting 500 jobs in support and managerial roles, through redeployment and redundancies, by the end of the year.
The airline returned to profit this year after three years of heavy losses, and chief executive Craig Kreeger has pledged to restore sustained record profits by 2018.
Kreeger said: “To truly position Virgin Atlantic for long-term and sustained success, we need to be a more efficient and agile organisation that has the ability to invest even more in the areas that make Virgin Atlantic’s customer experience unique.
“As a people oriented business, these are extremely tough decisions to take, but we know they are necessary to secure our future. We are committed to supporting our people as we deliver against these plans.”
Kreeger added that the airline had “delivered against a successful recovery programme and now it is time to realise our full potential”.
Virgin said it would continue to invest in its fleet and airport lounges, including bringing Wi-Fi and better food on board all of its planes, and newer, fuel-efficient aircraft coming. Five of its 17 Boeing 787 Dreamliners on order are now in service.
The airline that was founded in 1984 by Branson has retrenched considerably from more exotic global destinations over the last two years and focused its efforts on lucrative transatlantic routes, in a tie-up with US carrier Delta.
Singapore Airlines sold its 49% stake to Delta as Virgin created a partnership to challenge rival British Airways in its tie-up with American Airlines.
The joint venture, giving Virgin a much greater reach within the US, has helped underpin its recovery. It recently launched direct routes to Atlanta and Detroit from London.
The airline recorded a £14.4m pre-tax profit for 2014, after three years of losses totalling £230m.
Despite Kreeger’s ambitions for the airline to break £100m profit annually by 2018, the current margin remains only 0.5%. Efforts to run a domestic service, Little Red, between Scotland and Heathrow to feed into its longhaul network foundered, and the domestic airline will cease operations in September. Even with lower fuel costs, Virgin has struggled to translate its brand into solid airline profits, and Kreeger has concluded jobs must go.
This article was written by Gwyn Topham, for theguardian.com on Tuesday 30th June 2015 19.32 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010