Virgin Atlantic announces pay freeze after heavy losses

Fears of job cuts at Virgin Atlantic were raised after it announced today it would freeze pay increases for thousands of staff this year as it was faced with heavy annual losses.

According to an internal memo sent by the transatlantic carrier's new chief executive Craig Kreeger, performance had been 'well behind where we anticipated', with a significant loss in the year to February.

The Sunday Times, which had accessed a copy of the memo, said the latest draft of the full-year results showed a deficit running at £135 million.

Ballooning fuel costs and increased competition on transatlantic services have been blamed by Kreeger for the losses.

Imposing an immediate pay freeze across the whole business, Kreeger has initiated a broad-based cost-cutting plan, according to the memo, which paper had seen.

Without mentioning specific figures, the video said the latest draft of the full-year results showed a deficit of £135 million, sources close to the airline told the paper.