Virgin Atlantic to retire all Boeing 747s "with immediate effect"

Virgin Atlantic will axe all of its Boeing 747 jumbo jets, abandon its London Gatwick hub and cut a third of its workforce to ride out the coronavirus crisis after struggling to secure a U.K. government bailout.

The carrier founded by billionaire Richard Branson said Tuesday it will focus on operating from its main London Heathrow base and Manchester. Routes from Gatwick, serving leisure markets including Orlando, Florida, and Barbados in the Caribbean, will now move to Heathrow.

“This is a devastating day for us,” Chief Executive Officer Shai Weiss said in an interview. “But we must be sustainably profitable to repay the financing we need, which means resizing and reshaping the business.”

As the global travel industry grinds to a halt because of the Covid-19 pandemic, carriers around the world are hacking back at staff levels, with some seeking multi-billion euro state bailouts.

Virgin’s arch rival British Airways is preparing to cut as many as 12,000 positions and is also looking at permanently exiting Gatwick, which attracts less business traffic than Heathrow.

Fewer planes, fewer flights

Virgin Atlantic will also slim its fleet from 45 planes to 36 as it braces for what may be a three-year slump in demand, CEO Weiss said.

This will begin with immediately and permanently grounding its seven Boeing 747 jumbo jets, with four Airbus A330s exiting in 2022 – by which time the fleet will have been pared to 36 newer Airbus A350 and Boeing 787 planes. Delivery schedules for eight A350 orders and 16 A330neo jets will be spaced out, though only two or three planes are due next year.

The Virgin Holidays division will also close 15% of its retail outlets and be rebranded as part of the airline. Weiss said the measures are necessary to deliver a return to profitability in 2021.

Discussions on potential funding with various parties, including Johnson’s government, are ongoing and have been constructive, according to the carrier, which continues to seek about £500 million pounds in support.

Virgin Atlantic plans to lease out its Gatwick takeoff and landing positions in the short term, and could initially bring back flights on a summer-only basis should demand permit. Frequencies will be reduced to some destinations but there are no plans to remove any from the network.