(Bloomberg) -- Virgin Australia Holdings Ltd., the airline backed by China's HNA Group Co., announced 750 job cuts and a wide-ranging operational review after reporting a seventh consecutive annual loss. The shares fell to a decade-low.
The job losses, which affect almost 8% of the airline's total workforce, will shrink corporate and head office staff, Virgin Australia said in a statement Wednesday. It plans to review its fleet and routes, and will cut some international and domestic flights. All contracts with suppliers are also being reassessed.
Click here for a breakdown of the annual loss
The shakeup is new Chief Executive Officer Paul Scurrah's attempt to make the airline commercially viable. Virgin Australia has already pushed back delivery of its first Boeing Co. 737 Max jet by almost two years. Scurrah's mission is further complicated by a slowing domestic economy, rising fuel costs and a weaker Australian dollar.
Virgin Australia stock lost as much as 1.5 Australian cents, or 9.1%, to 15 cents at 10:24 a.m. in Sydney. That's the lowest level since 2009. Virgin Australia is among the most thinly traded of the publicly listed airlines, with a free float of less than 10%.
The airline's A$349.1 million ($236 million) loss for the year ended June was “disappointing and underscored the need for change,” Scurrah said in the statement. “We must improve our financial performance.”
Virgin Australia's ownership structure is almost unheard of among modern-day airlines. HNA, Nanshan Group, Etihad and Singapore Airlines Ltd. each own about 20% of the carrier and no single investor has ultimate control. Virgin Australia in February finally ditched the idea of a privatization to end years of speculation that shareholders would attempt a buyout.
To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Chris Bourke, Garfield Reynolds
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