Virgin Australia Holdings Ltd. will cut a third of its workforce and scale back its fleet under the ownership of Bain Capital as the buyout firm attempts to resurrect the airline during the industry’s worst-ever crisis.
Under a plan announced Wednesday, 3,000 of the airline’s 9,000 jobs will go and long-haul international flights will remain suspended. After crumbling in April under A$6.8 billion ($4.9 billion) in borrowings, Virgin Australia will also get rid of all its long-distance Boeing Co. 777 and Airbus SE A330 jets and fly only Boeing 737s on short-haul routes.
The proposals are the first glimpse of Bain’s plan to revive Virgin Australia in a market that shows little sign of recovery. Corporate aviation casualties are mounting up — including Virgin Atlantic Airways Ltd. this week — as carriers from Thailand to the Americas collapse or seek bankruptcy protection.
“I applaud the courage of Bain to save an airline in the middle of a pandemic,” the airline’s Chief Executive Officer Paul Scurrah said Wednesday.
A full recovery for the industry is unlikely before 2024, a year later than previously anticipated, the International Air Transport Association has warned. And even that might be optimistic, according to Scurrah.