Virgin Australia announces a financial loss. Means job cuts, cost reductions, revised routes and frequencies not far away.
Despite an increase in revenue by 7.5 per cent to AU$5.83 billion in what are widely acknowledged to be difficult conditions, Virgin Australia recorded its 7th loss in a row. The full-year loss was AU$349.1 million.
As a result, it will cut 750 corporate and head office positions in an organisational restructure expected to save AU$75 million by the end of FY2020.
Sounds like all that brand differentiation might be out the window, as it prepares to more closely integrate the functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia.
“There is no doubt that we are operating in a tough economic climate with high fuel, a low Australian dollar and subdued trading conditions,”Virgin Australia CEO Paul Scurrah
Needless to say, no dividend was declared.
“However, today’s financial results tell us loud and clear that we need to reduce costs.”
The expansionary days of John Borghetti would appear to be over. Paul Scurrah, probably knew he was taking on a challenge when he came over to take the CEO position. The question is, will this be slash and burn, or a more creative and possibly more subtle solution. At the moment it is sounding more slash and burn, and that is rarely good for the service and quality of an airline.