...but 1,000 jobs face the axe as part of Virgin Atlantic rescue deal
VIRGIN Atlantic Airways is expected to slash another 1,000 jobs today as part of its £1.2bn rescue deal, as the airline sector continues to reel from the coronavirus pandemic.
It comes as Ryanair last night sought to raise €400m (£360m) from investors to bolster its finances ahead of the traditionally loss-making winter months.
Sir Richard Branson’s Virgin Atlantic, which he founded in 1984, is battling with slower than expected demand for international travel, Sky News reported. The airline already axed 3,150 roles less than four months ago, as well as the closure of its Gatwick Airport base.
The fresh cuts would mean that Virgin Atlantic’s pre-pandemic workforce level of around 10,000 staff has now halved. Meanwhile, Ryanair, Europe’s biggest carrier, said it was going through the most challenging period in its history as the fallout of the pandemic continued to wreak havoc.
Ryanair will raise the cash from institutional investors. The money would allow the carrier to “capitalise on significant post-Covid-19 growth opportunities”, strengthen cash reserves and pay down debt, it said. As a major shareholder, Michael O’Leary, the chief executive, will invest roughly £16m into the airline he has worked for since 1988, the stock market filing indicates.
Ryanair said the new money would give it the financial fire power to take advantage of gaps in the market left by failing rivals. Further cash could be raised from bond markets, it added.
The placing came as airlines and airports urged the European Commission to extend a crucial waiver on take-off and landing slots. So-called “use-it-orlose-it” rules mean airlines must use 80pc of their airport slots each year or hand them back to a central pool.
Slots at capacity-constrained airports such as Heathrow are worth tens of millions of pounds. Without a waiver extension, carriers could be forced into running empty services in order to preserve vital footholds.