Virgin Atlantic’s refinancing deal was a “major milestone” for the airline and “paves the way to return to profitability, according to its sales chief.
Speaking on a Travel Weekly webcast, global vice-president of sales Lee Haslett said: “For everybody, the past six months have been incredibly challenging; it’s been incredibly challenging for the aviation sector and I think you’ve seen that globally. But the finance restructuring plan that we announced was a major milestone towards us securing our future.
“It’s a five-year business plan and it has the support of our shareholders – Virgin Group and Delta, and new private investors, and also support of our existing creditors. And it really does pave the way for the airline to rebuild its balance sheet and return to profitability in 2022.”
Asked how he could be so confident of returning to profitability within just two years, Haslett said: “From an industry perspective, we think it will be three or even three-and-a-half years until we get back to 2019’s capacity. But through the very decisive action that we’ve taken, some of the difficult decisions we’ve made to restructure the business, we think we can [return to profitability].
He explained: “Within our five-year plan, we have all those scenarios in there of less capacity and fewer travellers; we know that there’s going to be some impact from a business and leisure perspective.
“But through the decisions we’ve made from a fleet and aircraft type perspective, through the decisions that we’ve made with our Gatwick base and Heathrow base, and then also, some of the right-sizing of our of our teams and network, this has resulted in the fact our ongoing operating costs will reduce.
“We have a strong plan; there’s lots of scenarios within that plan and we really believe that will deliver to that plan.”
Haslett stressed that the cuts Virgin Atlantic has made should not impact customers.
“From a service perspective, we’ve retired our 747s but the positive point from that is we have our new A350s. We’re deferring some of the deliveries of those, but the A350s will arrive and we’ve taken some of those into the fleet already,” he said: “And then there’s also our 787s. So we’re going to have one of the youngest, greenest fleets, which is great from a sustainability perspective, but also from a customer experience perspective having a brand new product, it’s good.”
Haslett added: “One of the things that’s really encouraging is that we are still flying to all of those destinations that we know our customers love. So the Gatwick destinations will still be flown from Heathrow, so you’ll see the likes of Barbados and Orlando and so forth will move across.
“We’re very committed to London and Heathrow and also continuing our services from Manchester. And we will continue to serve Orlando from Belfast and Glasgow, seasonally.”.
Asked if Virgin Atlantic would ever go back to Gatwick, Haslett said: “Never say never. We may well review it as and when, and if there’s demand, and also if it’s cash positive, then we may look at it.
“Everyone’s had to make some difficult decisions. Gatwick was a difficult one. It’s where Virgin Atlantic started. We’ve had to make some really difficult and decisive decisions through this period to protect our survival and protect the future of the airline. And that was one of those difficult decisions we had to make.”