Virgin Australia restructures after reporting $315.4 million loss.
Virgin Australia has today reported a statutory after-tax loss of $315.4 million for the year to 30 June, with the figure including a non-cash writedown of the value of Tigerair and the VA International business units.
The underlying loss before tax was $71.2 million, down $135.6 million on the previous corresponding period, due to adverse market conditions, new route investments and almost $160 million in “fuel and foreign exchange headwinds”.
CEO Paul Scurrah said the carrier was responding to the challenges with a series of immediate improvement initiatives to streamline operations and reduce costs, including a simpler organisational structure, a fleet and capacity review, supplier contract review and “organisational rightsizing program”.
The corporate, operational and commercial functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia will be integrated into single functions and points of accountability, while the restructure will also target a reduction of 750 roles, largely focused on corporate and head office positions to save an estimate $75 million per annum.
A new Executive Leadership Team will include John Macleod, who has been named as Chief Commercial Officer, joining Virgin Australia from his most recent role as Vice President Global Sales and Alliances at Air Canada. Danielle Keighery has been appointed to the newly created Chief Experience Officer, to create a single point of accountability for the customer experience across all brands.
Merren McArthur has advised she intends to leave the Virgin Australia Group, but will lead Tigerair on an interim basis as it transitions to the new structure in the coming months. Keith Neate will join VA as Chief Financial Officer, while Geoff Smith has “decided to depart the business to explore new opportunities,” Scurrah said.
The Virgin Australia CEO said the business needed to “make some tough decisions in order to ensure a strong future for the Group”.
More details in today’s issue of Travel Daily.