Virgin Australia cuts jobs as it adjusts to virus

Virgin Australia plans to scale down its operations under new US owners and shed a third of its staff as the carrier adjusts to the pandemic, Australia's second-largest airline said on Wednesday.

The Brisbane-based company in April became the world's largest airline to seek bankruptcy protection after the coronavirus pandemic virtually grounded the aviation industry.

Virgin's administrator Deloitte's has entered into a binding agreement to sell the airline to the Boston-based investment firm Bain Capital.

The deal will go within weeks for final approval to a meeting of Virgin creditors who are owed 7 billion Australian dollars (5 billion US dollars).

The Virgin Australia Group chief executive and managing director Paul Scurrah announced plans to cut 3,000 jobs plus long-haul flights from Australia to Los Angeles and Tokyo to try to reset the business for lower global demand.

The domestic and short-haul international fleet would become all Boeing 737s, except for regional and charter aircraft. Boeing 777s and Airbus A330s would be shed.

Virgin's budget subsidiary Tigerair Australia would be discontinued, as would its Airbus A320s.

While the workforce would be slashed to 6,000, the airline hopes to build back up to 8,000 staff as the aviation market recovers.

Backed by Bain Capital, with more than 100 billion US dollar assets under management, Virgin Australia would have "a strong balance sheet to withstand material future shocks to the industry," Scurrah said.

Virgin Australia's major shareholders are Singapore Airlines and Etihad Airways and Chinese investment conglomerates Nanshan Group and HNA Group.

Its British billionaire founder Richard Branson holds a 10% stake.

The airline sought bankruptcy protection after the Australian government refused its request for a AU $1.4 billion (1 billion US dollars) loan.

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