Covid-19 coronavirus: Virgin Australia moves to close NZ operations

Virgin Australia employs about 200 pilots and 260 cabin crew in New Zealand. Photo / 123RF

Virgin Australia is moving to close its New Zealand operations as it grounds nearly all its planes.

The airline will temporarily stand down approximately 8000 of the company's 10,000 strong workforce until at least the end of May.

In an announcement to the ASX, the company said it will commence consultation on a proposal to close its New Zealand cabin crew and pilot base. It employs about 200 pilots and 260 cabin crew here.

The airline is also moving to close its Tigerair Australia Melbourne pilot base.

During the stand down, staff will be able to access accrued leave entitlements, but for many team members, leave without pay will be inevitable.

The Virgin group is working with more than twenty-five partners to identify short and long-term redeployment options.

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As part of its battle plan:

• Group domestic capacity reduction of 90 per cent and temporary grounding of 125 aircraft.
• 10 per cent domestic capacity retained for transportation of essential services, critical freight and logistics.
• Suspension of Tigerair Australia flying effective immediately.
• Approximately 80 per cent of workforce to be temporarily stood down.
• Covid-19 impacts to cost base has prompted a consolidation of our domestic and short-haul international businesses and put a pause on some supplier agreements. 25 March 2020:

The airline said that state border closures escalating across Australia, the group had needed to take further action that will see the suspension of most of its domestic flying from midnight this Friday until June 14.

Most airlines are ceasing international operations and in this region Virgin Australia was in the most vulnerable going into the crisis compared to Air New Zealand and Qantas.

The moves were in addition to the group's decision to temporarily suspend international flying from March 30 to June 14 and close all Virgin Australia operated lounges across the network.

''Despite the dramatic steps taken to respond to market conditions, we recognise our role as a key part of the nation's travel industry and will work with government to maintain vital domestic routes for the transportation of essential services, critical freight and logistics operations.''

Virgin Australia chief executive and managing director Paul Scurrah said there had never been a travel environment in Australia as restricted as the one today and the extraordinary steps taken have been in response to the federal and state governments' latest travel advice.

"We are now facing what will be the biggest grounding of aircraft in this country's history. From the end of this week, we will begin repositioning and grounding more than 125 aircraft in our fleet, suspending almost all our domestic and international flying until at least the middle of June,'' he said.

"I know our people have been working tirelessly to help guests get home ahead of the various state travel restrictions and their efforts should be applauded as they adapt to a rapidly changing environment.''

The company planned to return Tigerair Australia and Virgin Australia to the skies as soon as its viable to do so.

''However I am mindful that how we operate today may look different when we get to the other side of this crisis,'' said Scurrah.

"I am only too aware of how much our people are hurting at the moment and these very tough decisions have weighed heavily on me and my leadership team. We are talking to our teams and we are working hard to do what we can to protect jobs and extend payments for as long as possible."

Virgin has been in Australia since 2000 and launched as a new brand Virgin Australia, in May 2011.

It first started in New Zealand as Pacific Blue in 2007.

• Covid19.govt.nz: The Government's official Covid-19 advisory website