Virgin Australia to merge units, cut jobs as it swings to FY loss
Virgin Australia Holdings said on Wednesday it would merge three of its business divisions and cut 750 jobs, in a turnaround bid after swinging to an annual underlying loss.
Virgin Australia Holdings said on Wednesday it would merge three of its business divisions and cut 750 jobs, in a turnaround bid after swinging to an annual underlying loss due to higher fuel prices and a weaker currency. The company, which also appointed a new finance chief, said it will integrate the corporate, operational and commercial functions of Virgin Australia Airlines, Virgin Australia Regional Airlines and Tigerair Australia into "single functions and points of accountability".
Virgin said it expects A$75 million in cost savings by the end of fiscal 2020 from the reduction of 750 corporate and head office roles.
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"Today’s financial results tell us loud and clear that we need to reduce costs," Chief Executive Officer Paul Scurrah said in a statement.
The company reported an underlying pretax loss, its most closely watched measure, of A$71.2 million ($48.09 million) for the year ended June 30, compared with a A$64.4 million profit last year.
Virgin in May provided guidance for an underlying loss before tax of at least A$35.6 million.
An average estimate of three analysts expected the company to post an underlying pretax loss of A$82.5 million, according to Refinitiv data.
Virgin appointed Keith Neate, a former executive vice- president and chief financial officer of Aurizon Holdings, as its new CFO. The company also named John MacLeod, a former Air Canada executive, as its chief commercial officer.
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