Workers hit as Virgin cuts hundreds of jobs
VIRGIN Australia will cut 750 jobs and review each of its routes as the struggling airline posted its seventh consecutive year of losses.
Soft demand, high fuel costs and currency movements have resulted in a $315 million full-year loss for the airline, it announced this morning.
While the loss is down from $653.3 million the previous year, Virgin Australia chief executive Paul Scurrah said the results underscored the need for change.
The company will cut 750 roles from corporate and head office over the next 12 months in a move expected to deliver $75 million each year in savings.
Virgin Australia is headquartered at Bowen Hills and, as revealed by the Courier Mail last week, has started the long-term process to find a new office.
The company would not reveal how many jobs would be lost in Brisbane, which has a workforce of about 1000 people.
The cuts will represent a 30 per cent reduction in the corporate and head office workforce.
Virgin Australia staff were sent an email this morning notifying them of the company's plans.
Corporate roles, from general manager to entry-level positions, will be targeted.
Mr Scurrah said the business "needed to make some tough decisions".
Virgin has posted seven consecutive years of losses totalling $1.9 billion.
The company will review the feasibility of each of its routes and future fleet requirements.
This morning's announcement has concerned Queensland Tourism Minister Kate Jones.
"Obviously the new CEO of Virgin has a job to do but it's always disappointing to hear of any job losses particularly in the aviation industry here in Queensland," she said.
"I'm happy to sit down with the Virgin CEO and really understand what impact that means for Brisbane.
"As a government we have more money than ever before available to secure new flights to Queensland."
Ms Jones said she did not want to see the loss of flights in and out of Queensland.
"We know that by having direct flights, that you can actually increase visitation which means more tourism jobs," she said.
"I will undertake to meet with the Virgin company to talk through the impacts for Queensland and certainly our view would be that we would not want to see any loss of direct flights into Queensland because we know they're critical to the tourism industry."
Its low-cost carrier, Tigerair, also struggled with declining revenue and accelerated depreciation costs leading to an underlying EBIT loss of $45 million.
Tigerair is transitioning its fleet from A320 aircraft to B737s.
The company's sixth Boeing 737 plane is due to arrive in October.
Virgin Australia's loss comes as rival Qantas continues to post a profit amid difficult conditions.
Last week the flying kangaroo recorded a $1.3 billion underlying profit before tax for the year, down from a record $1.56 billion for 2018.
The company blamed high fuel costs for the moderate fall in profits.
Airline chief executive Alan Joyce said despite the headwinds Qantas remained "one of the best-performing airline groups in the world".