Weakened by the health crisis, the airline Virgin Australia announced Wednesday that it was going to close one of its subsidiaries and cut 3,000 jobs.
“As a company, we must make changes to ensure the success of the Virgin Australia group in this new world,” said Paul Scurrah, CEO of the company founded by Briton Richard Branson, in a statement.
The group will therefore close its low-cost subsidiary Tigerair Australia and reduce its workforce by a third, thereby eliminating 3,000 jobs.
In debt to the tune of five billion Australian dollars (3.2 billion dollars, 2.95 billion euros), Virgin Australia was already in bad shape financially before the epidemic of coronavirus, which shook the world aviation sector.
With the arrival of the virus and Australia’s closure of borders to non-residents, the company was forced to suspend all international flights before announcing in April that it was voluntarily suspending payments.
“It will take at least three years to return to the level of pre-Covid-19 demand for domestic and international short-haul travel,” added Paul Scurrah.
The announcements come as private equity firm Bain Capital, which made an offer to take over Virgin Australia, accepted in late June, is due for approval in August.