Under pressure airline Virgin Atlantic is preparing to axe 1,000 jobs, just days after finalising a £1.2billion rescue deal.
It comes less than four months after the Sir Richard Branson-founded airline cut 3,150 roles and announced the closure of its base at London’s Gatwick Airport.
The precise number of job reductions is so far unclear although aviation industry sources suggest it would be more than 1,000, reports MirrorOnline.
Virgin Atlantic’s £1.2billion bailout was approved this week, which the airline said was a “significant milestone in safeguarding its future”.
At a remote court hearing on Wednesday, Justice Snowden sanctioned the restructuring plan – a key step of the process for Virgin Atlantic to implement the rescue package.
The deal, first announced in July, involves only private funds, and includes a cash injection of £200 million from founder Sir Richard Branson’s Virgin Group.
Creditors are being asked to accept 20 per cent less than they are owed, and for repayments to be rescheduled.
The airline has previously insisted that without a “solvent recapitalisation” its directors would have “no choice” but to place it into administration, which would “result in a poor outcome for the company’s creditors”.
In a statement after the hearing, a Virgin Atlantic spokesperson said: “In order to complete the private-only, solvent recapitalisation of the airline, our restructuring plan has gone through a court-sanctioned process under Part 26A of the UK Companies Act 2006, to secure approval from certain creditors before implementation.
“Today, Virgin Atlantic attended an English High Court hearing where the restructuring plan was formally sanctioned.
“A US procedural hearing will follow tomorrow, 3 September, ensuring the restructuring plan is recognised in the US, paving the way for completion of the £1.2 billion private-only, solvent recapitalisation of Virgin Atlantic.
“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel.”
Virgin Atlantic has anticipated that demand for air travel will not return to pre-pandemic levels until 2023.
In May it revealed it reduce operations, including closing its Gatwick base and cutting 3,550 jobs.