Virgin staff brace for a hard landing amid turmoil

With the aviation landscape changing rapidly, Virgin Australia faced a mammoth task to respond to the avalanche of calls.

Virgin Australia CEO Paul Scurrah will bring up a year in the job on March 25. Picture: AAP

With the aviation landscape changing rapidly in the past week, Virgin Australia faced a mammoth task to respond to the avalanche of calls from customers caught up in the mayhem.

As call waiting times blew out, an appeal was made to staff outside the contact centre to lend a hand. The airline’s chief experience officer Danielle Keighery said the response was overwhelming.

“We had 450 people learn (computer system) Sabre, figure out how to do it, set it up at their desk and start helping, and we got down to 10-minutes (wait time) by the end of the day,” she said.

The performance of employees throughout the coronavirus crisis has won repeated praise from CEO Paul Scurrah, who will next week mark his first anniversary in the job.

But the bitter reality of the situation is that many roles are now surplus to requirements due to extensive cuts made to the airline’s flying schedule in an effort to keep Virgin Australia viable.

“It’s very, very hard on everyone involved. We’re in unprecedented times. It’s a crisis that’s affecting our entire industry and what makes it harder is that there is an impact on people and that’s inevitable,” Mr Scurrah said.

“The thing that I’m most proud of is the people across our brands have rolled up their sleeves and done some amazing things in these last couple of weeks.” A big impact on the 10,000-strong workforce was unavoidable given this week’s decision to suspend all international flights until mid-June and halve domestic travel.

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The move will see 53 aircraft grounded, including all of Virgin Australia’s wide-body aircraft, 34 Boeing 737s, six Airbus A320s and two ATR turboprops.

“We’d be lying if we said there wasn’t going to be an impact on people’s livelihoods and employment but we’re trying to manage that through leave without pay, through full-timers becoming part-timers potentially and number of other things,” said Mr Scurrah.

“I think everybody is taking the necessary precautions right now in case we see a prolonged crisis.

“Hopefully it isn’t and when the demand comes back, we’ll be well-positioned to handle that demand.”

He rejected the suggestion Virgin Australia would re-emerge as a domestic-only carrier after the coronavirus crisis, insisting the airline had an important role to play connecting Australians with the rest of the world.

Mr Scurrah was also hopeful Australians would continue to fly domestically and was grateful to hear the Prime Minister reaffirm the safety of domestic air travel.

If people make the decision to fly domestically, we will guarantee the highest levels of cleanliness, we will make sure we go further than we need to,” he said.

“We’re taking all precautions we need for people to be very safe from the virus when they’re travelling with us.”

Financial assistance in the form of relief from Airservices Australia fees, fuel excise and regional security charges was welcome but Mr Scurrah hinted more help would probably be required.

“I think the prudent thing for this industry to be doing now is to make sure that we know at certain points in the future that there are further levers that can be pulled to help the industry,” he said.

“I think it’s helpful to scenario plan with the government.” Qantas CEO Alan Joyce also welcomed a $715m airlines assistance package outlined late on Monday, which he described as a “great help”.

The national carrier is making its own drastic cuts to flying in the face of extensive travel restrictions that have reduced demand to almost zero.

But investment research company Citi suggested any fears of Qantas's demise were misplaced with financial modelling showing the airline could ground its whole fleet and survive for some time.

“We estimate that Qantas could withstand six to 11 months of no flying before having to reduce its cost base further, increase gearing or raise equity,” said Citi analyst Jacob Cakarnis.

Singapore Airlines increased its capacity cutbacks to 50 per cent of services on Wednesday as more countries imposed 14-day self-isolation periods on arrivals from overseas.

Despite the measures taken by airlines, share prices continued to slide with Qantas closing down 11.5 per cent at $2.53. Virgin Australia’s shares closed 6.4 per cent up at 6.7c.

Regional Express shares came out of a trading halt and slumped 14.4 per cent to finish the day at 71c, as executive chairman Kim Lim Hai withdrew the airline’s profit guidance for 2020.

Rex welcomed the assistance package, but warned it would have to take more steps to cut costs and conserve cash, including cutting its network capacity by about 40 per cent. It also warned some routes could be cut altogether.