Virgin Atlantic asks staff to take eight weeks of unpaid leave due to coronavirus | Business News

Virgin Atlantic staff will be asked to take eight weeks of unpaid leave over the next three months, to help the airline cope during the coronavirus pandemic.

The airline is one of many to have brought in drastic measures to cope with a fall in passenger demand, due to global travel restrictions and the reluctance to travel due to the disease.

Bosses said the cost would be spread over six months’ salary to “drastically reduce costs without job losses”.

Also on Monday:

  • Virgin Atlantic to reduce daily flights by 80% by 26 March and the London Heathrow to Newark route to be axed immediately
  • Tui cancels “vast majority” of its holidays, saying: “In this rapidly changing environment the safety and welfare of our guests and employees worldwide remains of paramount importance and thus Tui Group has decided, in line with government guidelines, to suspend the vast majority of all travel operations until further notice, including package travel, cruises and hotel operations”
  • easyJet warns most of its fleet could be grounded, saying it will continue to operate rescue flights for short periods “where we can” to repatriate passengers, but more cuts are expected
  • easyJet chief executive Johan Lundgren: “European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over”
  • Ryanair expects majority of its European fleet to be grounded over next seven to 10 days. In countries where they are not grounded, growing restrictions could make flying “impractical if not impossible”
  • Ryainair chief executive Michael O’Leary said “extraordinary and unprecedented travel restrictions” imposed by governments had come “in many cases with minimal or zero notice”. He said the group is “resilient”, with “substantial cash liquidity” and will survive with “appropriate and timely action”
  • British Airways owner IAG says travel restrictions are “having a significant and increasingly negative impact” on demand on almost all of its routes
  • IAG to reduce capacity by 75% in April and May, compared to same period last year
  • IAG staff to be offered voluntary leave options, recruitment to be frozen, and working hours reduced
  • IAG chief executive Willie Walsh: “We have seen a substantial decline in bookings across our airlines and global network over the past few weeks and we expect demand to remain weak until well into the summer…We will continue to monitor demand levels and we have the flexibility to make further cuts if necessary”
In this picture taken on February 14, 2020, a Malaysia Airlines hostess (R) wearing a protective face mask checks the temperature of Chinese passengers before they board a flight to Beijing at the Kuala Lumpur International Airport in Kuala Lumpur
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Countries are increasing restrictions on travellers – if they are letting them come in at all

Shares in IAG were down 28% and easyJet’s shares were down more than 20% just before 10am. Shares in Tui AG fell by more than 29% and Ryanair was down more than 18%.

It comes after a major aviation consultancy warned that most of the world’s airlines could be bankrupt by the end of May without help from the government and industry.

The warning came from CAPA Centre for Aviation, an airline analysis and consulting firm based in Australia, as airlines worldwide cut schedules and staff due to the COVID-19 pandemic.

“Demand is drying up in ways that are completely unprecedented,” CAPA said in a report. “Normality is not yet on the horizon.”

Many countries have closed borders to arrivals or have announced compulsory self-isolation, leading to a sharp fall in demand for air travel.

The US has banned all flights from Europe, including the UK, while countries including Israel, Australia and New Zealand have said all arrivals will have to spend 14 days in isolation on arrival.

On Sunday, Sky News reported that Britain’s airline industry needs emergency government support worth up to £7.5bn to avert a catastrophe that would wipe out tens of thousands of jobs.

Transport Secretary Grant Shapps told Sky News he will meet transport sector chiefs this week.

He said: “We understand this is a crisis like we haven’t seen before, where businesses which are otherwise sustainable, otherwise good businesses, of course should be able to survive through this situation.

“That’s what we’re going to try and put in place for all businesses and individuals in this country, as we join this great national effort to defeat this virus.”

When asked if the government was minded to bail out airlines, he was non-committal but said “discussions with the sector are ongoing”.

Members of the Thai Airways crew disinfect the cabin of an aircraft of the national carrier during a procedure to prevent the spread of the coronavirus at Bangkok's Suvarnabhumi International Airport
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This week could be one of the worst for the aviation industry as the effects of the virus become clearer

In other coronavirus-related aviation news:

  • United Airlines will cut capacity by 50% in April and May. March brought $1.5bn (£1.2bn) less revenue than the same time last year
  • United warns many of its planes could fly empty well into the summer months and corporate salaries will be cut in half
  • Association of Flight Attendants-CWA, representing 50,000 US flight attendants, calls on Congress to “take all measures available to protect the health and payroll of American workers”
  • Germany’s Tui AG and Scandinavian airline SAS will suspend most operations and apply for government help
  • Icelandair Group says will cut capacity and reduce its salary cost “significantly”
  • Air New Zealand will cut jobs, reduce long haul capacity by 85%. Chief executive Greg Foran says: “We are accepting that for the coming months at least, Air New Zealand will be a smaller airline requiring fewer resources, including fewer people”
  • Australia’s Qantas will add further cuts to the 25% reduction announced last week
SAS is the carrier of Denmark, Norway and Sweden
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SAS is among those cutting capacity due to the fall in demand

The World Travel and Tourism Council last week warned that up to 50 million jobs globally were at risk in the sector due to the COVID-19 pandemic.

Nigel Frith, a senior market analyst at AskTraders, said the virus outbreak had caused the “biggest crisis to hit the industry, worse than 9/11”.

He added: “This is no longer just the smaller players like Flybe who are being affected. Industry big shots such as British Airways is even warning over its survival. It wouldn’t be surprising if governments are forced to step in to prop up some airlines.

“The big questions here are how quickly will the virus pandemic last? how quickly will countries re-open borders? And how willing to travel will the public be? The answers to these questions are unknown but will ultimately decide the fate of the airline industry.”

Source: http://news.sky.com/story/most-world-airlines-could-be-bankrupt-by-end-of-may-aviation-consultancy-11958150

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