Virgin Australia, which has the largest fleet size of the Virgin brand, has announced its decision to cut 3,000 jobs and to close down Tigerair Australia in a move the company claims will eventually secure 6,000 jobs when the market recovers.
The 3,000 affected workers will be offered unlimited standby travel for two years.
There were some clues as to what transpired ahead of the Tigerair announcement, with Interstate travel mostly banned by the Australian government since April, when 14 of Tigerair’s domestic planes were grounded.
The decision to axe Tigerair therefore is a result over time of insufficient customer numbers due to the pandemic.
However, the “discontinuance” as it is being termed might not be the end of Tigerair altogether.
There is still a suggestion that Tigerair might return to the sky in the future.
In related news, Virgin Australia is also suspending all international flights and offloading some planes, to focus on its domestic and short-haul flight market.
“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, (and in reality this) could be longer.” Paul Scurrah, CEO of Virgin Australia, said in his announcement to the Australia Stock Exchange.
The truth is, Virgin Australia was already suffering before the impact of the pandemic hit.
It has not turned a profit for years, and debts are now approaching AUS$7 billion.
Things are also problematic on the Virgin Airlines side of the business with London based Virgin Atlantic warning it could run out of cash next month after the company entered voluntary administration in April.