Virgin Atlantic Airways is expected to slash another 1,000 jobs today as part of its £1.2bn rescue deal, as the airline sector continues to reel from the coronavirus pandemic.
It comes as Ryanair last night sought to raise €400m (£360m) from investors to bolster its finances ahead of the traditionally loss-making winter months.
Sir Richard Branson’s Virgin Atlantic, which he founded in 1984, is battling with slower-than-expected demand for international travel, Sky News reported.
The airline already axed 3,150 roles less than four months ago, as well as the closure of its Gatwick Airport base. The fresh cuts would mean that Virgin Atlantic’s pre-pandemic workforce level of around 10,000 staff has now halved.
Meanwhile, Ryanair, Europe’s biggest carrier said it was going through the most challenging period in its history as the fallout of the pandemic continued to wreak havoc.
Ryanair will raise the cash from institutional investors. The money would allow the carrier to “capitalise on significant post-Covid-19 growth opportunities”, strengthen cash reserves and pay down debt, it said.
As a major shareholder, Michael O’Leary, the chief executive, will invest roughly £16m into the airline he has worked for since 1988, the stock market filing indicates.
Ryanair’s equity raise follows similar moves from major peers. In June, easyJet launched a £450m rights issue. British Airways parent IAG announced in July plans to tap investors for up to £2.5bn.
The aviation sector is among the hardest hit by the pandemic. With all but a handful of flights grounded as the virus swept across Europe earlier this year, hopes of a relaxation of travel restrictions over the summer months have been dashed by rolling quarantines amid fears of a spike in infections.
Ryanair said the new money would give it the financial fire power to take advantage of gaps in the market left by failing rivals. Further cash could be raised from bond markets, it added.
The placing came as airlines and airports urged the European Commission to extend a crucial waiver on take-off and landing slots in the face of concerns they will soon be forced to fly “ghost planes”. So-called “use-it-or-lose-it” rules mean airlines must use 80pc of their airport slots each year or hand them back to a central pool.
Slots at capacity-constrained airports such as Heathrow are worth tens of millions of pounds.
Without a waiver extension, carriers could be forced into running empty services in order to hold on to vital footholds.
Olivier Jankovec, boss of trade body ACI Europe, said: "Decisions must be made now to enable the timely return of slots for the winter season once the waiver is granted. This will give airports and airlines certainty in planning their schedules and operations and ensure that passengers know what to expect in the tough months ahead. Further delays will paralyse the winter planning process and add millions in costs for all parties."
Rafael Schvartzman, of airlines body IATA, added: “Only a full-season slots waiver will ensure that the flying of empty planes is avoided and enable flights to be operated in the most sustainable way possible.”