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Virgin to cut 750 jobs on full-year loss



News

By Loren Webb

Virgin Australia will cut 750 jobs as part of a restructure after announcing a full-year loss of $349.1 million that left the airline in the red for the seventh year in a row.

Revenue for the 12 months to June 30 rose 7.5 per cent to $5.83 billion despite a “challenging trading environment” in the second half of the financial year.

Virgin Australia, which on Wednesday announced its seventh straight annual loss, said the corporate and head office job cuts were aimed at saving $75 million by the end of the 2020 financial year.

The company said it would more closely integrate the functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia.

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

“Decisions which have a direct impact on people’s livelihoods are never made lightly and I regret the need to reduce the size of our workforce so quickly.

“However, today’s financial results tell us loud and clear that we need to reduce costs.”

A strategic review would consider changes to its fleet, routes and agreements with airports to further reduce costs.

“The group intends to further reduce flying across elements of its short-haul international and domestic network to meet demand and maximise route profitability, and expects H1 FY20 capacity growth to be negative,” it said.

The company on Wednesday also announced the appointment of Keith Neate as its new chief financial officer, starting on September 2.

Virgin, which did not declare a final dividend, noted there had been a “continuation of softer conditions” at the start of July.

Virgin shares were down 6.06 per cent to 15.5 cents at 1335 AEST on Wednesday.

VIRGIN RECORDS ANOTHER FY LOSS

  • Full-year net loss of $349.1m from $681.0m loss in previous corresponding period
  • Revenue up 7.5pct to $5.827b
  • No dividend declared
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