How One Airline’s Pandemic Hurt Becomes Everyone’s Pain

After more than a decade working at Manchester Airport in the northwest of England, Tracey Moore finally got the job she wanted — at Virgin Atlantic’s passenger check-in desk. Then, at 3:30 p.m. on Oct. 22, after about a year on the job and months on furlough, she returned to the airport and handed in…

One Airline Pandemic Hurt
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ands of people let go at Swissport, an international company that provides ground handling services for airlines, including passenger check-in and loading and unloading baggage.

From check-in through takeoff and landing, travelers with Virgin Atlantic end up interacting with hundreds of other companies the airline has hired to provide the services and goods that make up a smooth flying experience. It is the same with most big airlines. Virgin doesn't cook the in-flight food, or print the menus, or build the business-class seats, or de-ice the wings, or unload the baggage at the airport, or return your luggage when it gets lost; it hires companies to do these and many more tasks.

But eight months after governments closed their borders and imposed travel restrictions to stop the spread of the coronavirus, lockdown restrictions have only partially eased and a second wave of the pandemic has besieged Europe, stamping out tourism.

Virgin Atlantic, which relies heavily on long-haul routes and trans-Atlantic travel, has had almost no opportunity to recover. The airline has laid off 4,700 employees, nearly half of its staff.

The companies contracted by Virgin, with names like Gogo (a provider of in-flight internet), ESP Colour (printing services) and Eagles Couriers, have also been knocked down by the pandemic's crushing blow on air travel, in some cases cutting staff and closing facilities.

Tracey Moore worked for Swissport checking in Virgin Atlantic passengers a role she had long coveted. After travelers vanished, she took a buyout.Credit...Elena Heatherwick for The New York Times

Information about these companies rarely comes to light. But this summer, when Virgin feared it would run out of cash in the fall, it worked out an intricate $1.6 billion private rescue deal. It included about $226 million from a hedge fund; capital raised in share sales from Virgin Galactic, Richard Branson's space venture; and agreements to defer debt payments.

As part of the plan, 162 companies around the world to whom Virgin owed about $69 million were essentially offered a choice: Get paid 20 percent less, with the balance paid in installments until September 2022, according to court documents, or risk Virgin Atlantic falling into bankruptcy, and perhaps getting little back. Most voted for the offer on the table, and so it applied to all of them.

The organizations, which include a charity, large hotel chains and consultancy firms, provides a map of the domino effect that economists have feared since the start of the pandemic: That the companies hurt most directly aviation, hotels and restaurants would kick start

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Read original at The New York Times | World

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