Australia markets open in 4 hours 3 minutes

Virgin Australia is slashing domestic flights by 90% and standing down 8,000 employees

Sharon Masige

Virgin Australia is standing down staff following flight reductions caused by the coronavirus outbreak.

The airline has cut domestic capacity from 50% to 90% and has suspended all Tigerair Australia domestic services, effective immediately.

With the state border closures happening around Australia, the airline will suspend most of its domestic flights – grounding 125 aircraft – from midnight Friday 27 March until June 14 2020.

Virgin will also temporarily stand down 8,000 of its 10,000 employees until at least the end of May. During this period, employees will be able to access accrued leave but for many, leave without pay "will be inevitable". The airline said it is working with more than 25 partners to find short and long term redeployment options.

"There has never been a travel environment in Australia as restricted as the one we see today and the extraordinary steps we've taken have been in response to the federal and state governments' latest travel advice," Virgin Australia CEO and Managing Director Paul Scurrah said in a statement.

"We are now facing what will be the biggest grounding of aircraft in this country's history."

Virgin's 90% reduction includes a temporary suspension of flights to 19 destinations in Australia from March 29 to 14 June 2020.

The airline, however, will continue operating near-daily services to 17 destinations around the country to transport essential services, critical freight and logistics.

The latest round of flight cuts comes after Virgin temporarily suspended international flights from March 30 to June 14 2020.

Scurrah added that the company is doing what it can to extend payments to staff for as long as it can.

"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," he said.

"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."

Last week, Qantas stood down roughly 20,000 employees and suspended all international flights from late March.

On Tuesday, Prime Minister Scott Morrison ramped up the initial "do not travel" advice to a total overseas travel ban.