Virgin Atlantic’s chief executive Shai Weiss will take a 20 per cent pay cut for the next four months as the airline attempts to save money in the face of a massive drop in demand according to an internal memo. Sources claim forward bookings are down by as much as 40-50 per cent as passengers shun air travel over fears of catching the COVID-19 coronavirus.
Earlier Wednesday, Virgin Atlantic introduced a flexible booking policy in an attempt to stimulate demand. The policy allows customers who book flights from today until March 31 to change their booking without penalty should their travel plans change because of the Coronavirus outbreak.
As well as Virgin Atlantic’s CEO taking a temporary pay cut, the airline’s entire senior leadership team has also agreed to take a 15 per cent pay cut for the same period of time. Other leaders are being encouraged to take a 10 per cent cut, although this is discretionary.
With load factors down, Virgin has also told staffers in an internal memo that it will start cutting the number of cabin crew operating on some flights by one crew member. All flights will still operate with at least the minimum required number required by UK and European air safety regulators.
Confirming the cost-cutting measures, a spokesperson for Virgin Atlantic said the airline was “feeling the impact of COVID-19” but that it was “taking appropriate measures and focusing efforts on ensuring that the airline is in a robust position to weather the storm”.
Other measures being implemented by Virgin Atlantic include:
- Ground staff have been asked to take between 1 – 2 weeks of unpaid leave
- The launch of a new service to Sao Paulo has been postponed until October 5
- Hong Kong flights will be reduced from daily to one every other day
- Rolling cancellations on New York services dependent on demand
- Retirement of Airbus A340-600 aircraft – because of the amount of fuel the four-engined jets use
Like other carriers, Virgin has suspended recruitment and is deferring all training courses until further notice. Unpaid leave will also be offered to employees across the business, although it’s not believed that this is yet mandatory.
For now, the airline says the negative effects of the Coronavirus outbreak could impact its business for the next three months – although, that is subject to change.
Earlier today, Lufthansa said it would ground 150 planes in its fleet – mostly short-haul aircraft – as it slashes capacity by as much as 25 per cent. Finnair will require employees to take as much as 30 days unpaid leave, while Etihad confirmed today that it had asked cabin crew to bring forward their paid annual leave plans to April.
“Virgin Atlantic has faced previous adversity and challenges over the years and through these sensible steps, we will ensure that we are in a stronger position once the impact of COVID-19 stabilises,” the statement from the airline continued.
