Virgin in a tailspin over latest losses

VIRGIN Australia will cut 750 jobs, shake up its executive ranks and reduce flight numbers after posting its seventh consecutive full-year loss.

Shares in the tightly-held airline plunged by as much as 9 per cent to a 10-year low in intraday trade yesterday after it booked a net loss of $315.4 million for the year to June.

While the bottom line again landed deep in the red, it was an improvement from the $653.3 million loss posted in the previous year.

Chief executive Paul Scurrah said Virgin had been buffeted by subdued trading conditions in the first six months of this year, as well as higher fuel costs and foreign exchange headwinds.

The result was disappointing and underscored the need for change, Mr Scurrah said.

“Today’s financial results tell us loud and clear that we need to reduce costs.

“Decisions which have a direct impact on people’s livelihoods are never made lightly, and I regret the need to reduce the size of our workforce so quickly.”

The job cuts, which will target head office functions in Brisbane, aim to save $75 million in annual costs by the end of the2020 financial year.

The airline aims to save another $50 million a year by renegotiating key supplier contracts, including aircraft and airport leases and maintenance. A review of flight routes and its fleet will result in fewer flights, and the functions of Virgin Australia Airlines, VirginAustralia Regional Airlines and Tigerair Australia will be more closely integrated.

“The group intends to further reduce flying across elements of its short-haul international and domestic network to meet demand and maximise route profitability,” it said.

Virgin Australia CEO Paul Scurrah in Sydney yesterday.