Virgin Australia: QLD workers face axe from state-owned airline

Despite taxpayers kicking in $200m to help resurrect it, Queensland workers won’t be protected from 3000 job cuts at Virgin, but the re-formed business has released a six-point survival plan in a bid to remain more competitive. SEE THE PLAN

VIRGIN Australia won’t guarantee the protection of hundreds of Queensland workers despite taxpayers investing $200m in the resurrected carrier.

Questions are now mounting about the State Government’s deal with Virgin’s new owner Bain Capital following Wednesday’s news that 3000 airline workers would lose their jobs as part of a major overhaul of the carrier.

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Job cuts will be made across Virgin’s corporate and operations roles as the airline moves to a Boeing 737-only fleet and dumps the tainted Tigerair brand.

Redundancy consultation with workers have started, but Virgin Australia managing director Paul Scurrah said he couldn’t “guarantee it’s going to be capped at 3000”.

“This is an industry that is in constant crisis at the moment,” he said.

“This is another very big and devastating decision.”

Mr Scurrah told The Courier-Mail the Queensland Government’s $200m stake in Virgin Australia had a “limited impact” on his decision to cut jobs and overhaul the carrier.

“In terms of the impact on our business plan, it was always going to follow what would make this a successful and profitable business in the future,” he said.

Treasurer Cameron Dick is yet to reveal what taxpayers will receive from the state’s investment in the airline but said the government was “working hard to save as many Queensland jobs as possible by keeping Virgin’s headquarters in Queensland”.

The government has an in-principle agreement with Bain Capital, however it won’t become legally binding until Bain takes ownership of the airline, now likely to be on September 4.

The uncertainty prompted LNP Deputy Leader Tim Mander to call on the Palaszczuk Government to “guarantee that no Queenslander will lose their job”.

“Annastacia Palaszczuk chose to gamble $200 million of taxpayers’ money when the government didn’t need to … Labor must prove the investment was worth it,” he said.

Virgin will continue operating a reduced domestic schedule, with long-haul international flights suspended and all lounges closed until demand returns.

It will remain a two-cabin carrier to prevent Qantas having “a monopoly” on Australia’s business class travel.

Mr Scurrah, however, said the airline would not return to the Virgin Blue days of “cracking jokes and rolling toilet paper down the aisle”.

Transport Workers’ Union National Secretary Michael Kaine welcomed Virgin’s decision to maintain a full-service airline and said the union would support workers.

VIRGIN’S SIX-POINT PLAN

Simplify everything

Virgin will only fly Boeing 737 aircraft, ditching its B777 and Airbus A330 and A320 fleet. Tigerair will be dumped and Virgin will consolidate its office space.

Customer value

Virgin aims to be the best value carrier in the market, not a low-cost carrier. It will keep business class cabins to prevent Qantas holding a monopoly on the market.

World-class data

Virgin will invest in improving its digital experience for customers, promising to upgrade outdated applications and online services

Harness culture

Management plan to build on work done in the past year to ‘unlock its culture and harness the spirit of its people’.

Strong cash sheet

Backed by Bain Capital, Virgin Australia will emerge from administration with a strong balance sheet and capital to grow.

Jobs and growth

3000 workers will leave the airline. Management hopes the cut will secure the remaining 6000 jobs, and allow it to grow back to 8000 when travel demand returns.