Please ensure Javascript is enabled for purposes of website accessibility

Virgin Atlantic to Layoff Thousands In Order to Survive Coronavirus Demand Collapse

By Howard Smith - May 5, 2020 at 10:35AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The airline announces plans to reposition the company as it expects it will be three years before business returns to pre-crisis levels.

British airline Virgin Atlantic has announced actions to "reshape and resize" itself as it aims to continue to successfully operate in the post-pandemic world. The airline, which is 51% owned by Sir Richard Branson with the balance held by Delta Air Lines (DAL -0.97%), said it plans to cut 3,150 jobs across the business, among other plans, "in order for the airline to emerge from the crisis."

Virgin's announcement compares the current COVID-19 pandemic to other crises in its operating history, such as 9/11 and the Great Recession of a decade ago, saying it expects it could take up to three years for travelers to return to pre-pandemic levels. 

Airplane taking off with sunset behind it

Image source: Getty Images.

Virgin Atlantic CEO Shai Weiss commented, "We have weathered many storms since our first flight 36 years ago, but none has been as devastating as COVID-19 and the associated loss of life and livelihood for so many."

With the aim to return to profitability in 2021, Weiss said that now is the time for Virgin to cut costs and preserve cash while maintaining as many jobs as possible. The airline continues to have discussions seeking external funding, including with stakeholders and the British government. 

CEO Weiss expressed hope that lost jobs would eventually return. He commented, "after 9/11 and the Global Financial Crisis, we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years. Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$29.53 (-0.97%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.