Overseas flights axed
Virgin grounds international fleet
VIRGIN Australia has grounded its entire international fleet until at least June 14 as Prime Minister Scott Morrison concedes the aviation industry has been the “hardest hit” by the pandemic.
Virgin will effectively ground 53 aircraft, with half its domestic flights also suspended.
The move comes after Qantas axed 90 per cent of its international flights and 60 per cent of its domestic flights.
Virgin Australia chief executive Paul Scurrah said: “We have entered an unprecedented time in the global aviation industry, which has required us to take significant action to responsibly manage our business while balancing traveller demands and supporting the wellbeing of Australians.
“We have responded by making tough decisions which include reducing our domestic capacity and phasing in the temporary suspension of international flying for a period of two-and-a-half months.”
Mr Scurrah said the airline was trying to avoid staff redundancies by “fast-tracking measures such as the use of accrued leave, leave without pay and redeployment”.
Even before the announcement, Virgin’s shares had gone into a tailspin after credit-rating agency S & P cut its debt to CCC+ because it could not implement changes fast enough to keep up with deteriorating operating conditions.
Mr Morrison yesterday upgraded the international travel ban to level four for the first time and told Australians “do not go overseas”. He conceded the aviation industry had been “the hardest hit” by the pandemic.
On Tuesday Transport Minister Michael McCormack unveiled a $715 million bailout package for airlines, temporarily cutting security charges, aviation fuel taxes and navigation and firefighting costs.
That followed a letter from Regional Express chief operating officer Neville Howell warning that it and perhaps a larger national carrier could collapse without the Government underwriting lines of credit.
The airline crisis in Australia has been mirrored around the world, with Singapore Airlines the latest to axe half its flights yesterday.
Singapore chief executive Goh Choon Phong said: “We have lost a large amount of our traffic in a very short time, and it will not be viable for us to maintain our current network.
“Make no mistake — we expect the pace of this deterioration to accelerate. The SIA Group must be prepared for a prolonged period of difficulty.”