Category Archives: Virgin Australia Airlines

Virgin Australia Group provides an update on coronavirus response

Virgin Australia Group has made this announcement:

Key points:

• Group capacity reduction to increase from 3 percent to 6 percent in 2H20 and increase to 7.7 percent in 1H21

• Domestic capacity reduction to increase from 3 percent to 5 per cent for 2H20 and increase to 6.2 percent in 1H21

• International capacity reduction to increase from 4.8 percent to 8 per cent in 2H20 and increase to 10.3 percent in 1H21

• This includes reducing Los Angeles, Japan, and Trans-Tasman services and the exit of Auckland services between Tonga and Rarotonga

• Temporary reduction in Chairman and Independent Board Director fees by 15 percent

• Additional cost reduction measures include a removal of management bonuses, no base salary increases for non-EA team members, and leave initiatives

• Earning guidance suspended due to uncertainty and the evolving nature of the COVID-19 situation

The Virgin Australia Group has announced additional reductions in capacity and cost measures to address the impact of COVID-19 and has also reassured guests of the onboard health and safety measures to enhance their protection.

Over the past two weeks, the global travel industry has seen a significant decline in forward bookings due to the rapid spread of COVID-19 and consumer uncertainty surrounding overseas travel.

As a predominately domestic airline, the Virgin Australia Group is insulated from some of the broader international impacts. The Group’s domestic operations account for 88 percent of passengers and 78 percent of flight revenue. However, the Group is taking action to reduce capacity in the international markets it operates in and reduce domestic capacity in line with weakened demand in certain markets.

The Group continues to maintain its high health and safety standards for all guests and crew. As an extra precaution during this time, it has also recently implemented additional hygiene measures in the air and on the ground.

Domestic changes

Across the Group, domestic capacity will be cut by 5 per cent for 2H20, driven by a reduction of 7 percent in Q4. This is an increase on the 3 percent reduction previously announced on February 26, 2020 due to continued market softness and decreased demand and forward bookings.

Services that will be reduced are mainly on markets that have multiple daily frequencies, minimising disruption to guests.

International changes

The Group has observed increasing weakness in international forward bookings and is reducing international capacity by 8 per cent in 2H20 to meet current and expected demand. The international changes announced today follow the Group’s recent withdrawal from Hong Kong services.

Key changes are:

• Reducing the daily Brisbane to Haneda service to three times per week from March 29 until May 3.

• Reducing the daily Sydney to Los Angeles service to five times per week from early May to early June.

• Further reducing Trans-Tasman services from a 2.6 percent reduction to 6 percent for 2H20, including the strategic reduction of frequencies on Auckland-Melbourne to daily from May and a temporary reduction on Auckland-Sydney services.

In addition, the Group also announced an exit of the following services as a continuation of the ongoing network strategic review:

• Auckland-Tonga to cease on May 1.

• Auckland-Rarotonga to cease on July 21.

The Group will continue to assess any impact from COVID-19 and respond with relevant changes as conditions evolve.

Continued focus on cost reduction

In addition to the already announced 750 non-Enterprise Agreement (EA) role reductions and middle and senior management salary freezes, the Group is also undertaking further measures to reduce costs including:

• Seeking relief on Government charges.

• A decrease in marketing spend.

• Stopping all discretionary spend and non-critical capital expenditure.

• Targeting a reduction in hotel accommodation charges.

• Leave initiatives including using accrued annual leave or unpaid leave or reducing standard working hours where operationally available.

• A freeze on all external recruitment and the use of consultants for the remainder of FY20.

• Chairman and Independent Directors to reduce their base fees by 15 per cent temporarily. Nominee Directors do not currently receive fees.

• Reducing all bonuses to zero across the Group for FY20.

• No base salary increases for non-EA team members.

Advice for guests

While the overall risk in Australia of contracting COVID-19 in the community remains low, the Group has taken a number of steps to enhance protection on its flights.

All aircraft are cleaned to the highest standards daily, crew maintain the highest hygiene standards on board, and all flights are equipped with hand sanitiser and face masks.

There is also a commercial policy available for guests wishing to change their travel due to COVID-19. Virgin Australia guests with new or existing international bookings through to 30 June 2020 have the option to change their flight to a later date and/or to a different destination, without incurring any change fees1.

As a result of the new measures announced today, guests with any changes to their bookings will be contacted directly with alternative travel arrangements including refunds for any routes that the Group is no longer servicing.

Update on financial position

The Group is suspending earnings guidance for FY20 due to ongoing uncertainty of the COVID-19 situation.

The Group currently has a cash position in excess of $1 billion, with no significant debt maturities until October 2021 and no new aircraft deliveries until July 2021.

CEO commentary

Virgin Australia Group CEO and Managing Director Paul Scurrah said the global industry has seen a significant decline in demand and the Group continued to assess its response to the evolving situation.

“We have already announced a number of measures to mitigate the impact from COVID-19, however the pace of the global spread and decline in demand has required us to implement further changes today to minimise the future financial impact,” said Mr Scurrah.

“As a largely domestic airline, we are less exposed to the impact on international travel, however we remain disciplined in our focus on managing capacity in response to forward bookings and continuing to reduce costs across the business. It’s worth noting that domestic operations account for 88 per cent of our passengers and 78 per cent of our flight revenue.

“The reductions in services will also mean reduced flying for our crew and we are committed to working with them through this period and providing a range of options.

“Pleasingly, our travel bookings to Western Australia and local leisure destinations such as the Gold Coast, Sunshine Coast, and Hamilton Island continue to be ahead of where they were at the same time last year. This demonstrates Australians are continuing to travel within our own backyard and support local tourism.

“These measures announced today are intended to soften the impact from COVID-19 and safeguard our company for the future.”

Virgin Australia aircraft photo gallery:

Virgin Australia announces further route cuts, will remove 7 Tigerair Airbus A320s

The Virgin Australia Group has announced a number of further changes as part of its fleet and network review to help manage costs, improve financial performance and respond to current market conditions.

The changes come as coronavirus has a weakening effect on international and domestic demand, with an expected $50-75 million impact to the Group’s earnings for FY20 as reported in its 1H20 results today.

The Group will reduce overall network capacity by three percent in 2H20, which includes a three percent reduction in domestic capacity and short-term capacity reductions on the Tasman in Q4FY20 to manage current conditions.

The changes focus largely on leisure destinations where demand is weaker, and where Virgin Australia and Tigerair both operate, and includes the withdrawal from five unprofitable Tigerair routes and some frequency consolidation on existing domestic routes where demand has also been impacted.

In line with the reduction, seven additional Tigerair Airbus A320 aircraft will cease flying by October 2020. This follows the announcement of five aircraft exits in November 2019, bringing the total to 12, which will help the Group further manage costs and improve financial performance.

The impact of the current fleet reduction initiative is equivalent to approximately a five percent Virgin Australia Group capacity reduction in FY21.

Network changes

Tigerair Australia will exit the following domestic leisure routes in addition to frequency reductions on existing routes:

Melbourne-Coffs Harbour from April 27, 2020
Sydney-Coffs Harbour from April 27, 2020
Adelaide-Sydney from April 27, 2020
Sydney-Cairns from April 27, 2020
Hobart-Gold Coast from April 28, 2020

Internationally, the Group already announced the withdrawal from the Hong Kong market due to ongoing challenges with the route, impact of civil unrest and coronavirus on demand. Short-term capacity reductions will be made on the Tasman in Q4FY20 due to weakening demand attributable to coronavirus.

Passengers with bookings impacted by these changes will be proactively communicated with and re-accommodated onto other services. Tigerair customers impacted by the above route exits will be re-accommodated onto other Tigerair flights where possible, or onto Virgin Australia services.

Fleet changes

Seven Airbus A320 aircraft are scheduled to exit Tigerair’s fleet in addition to two A320 aircraft exits from Tigerair previously announced in November 2019, making a total of nine A320s to cease flying by October 2020. Two Boeing 737 aircraft will be transferred from Virgin Australia’s fleet into the Tigerair fleet.

The changes accelerate the transition of Tigerair Australia to an all-Boeing 737 fleet, which brings cost and operational advantages to the low-cost carrier over operating multiple fleet types.

CEO commentary

Virgin Australia Group CEO and Managing Director, Paul Scurrah, said “Today, we’ve made some important fleet and network changes that will help us improve our financial performance and respond to market conditions.

“There’s no doubt we are operating in a tough market, and we need to make sure our capacity deployment is disciplined to ensure our routes are profitable for our business. Coronavirus is having a significant impact on the travel industry and these changes will help us manage the changes we’re seeing in demand.

“We maintain a very strong network of more than 450 destinations between us and our partners and, whilst we have made some announcements to manage costs today, we are as focused as ever on continuing to deliver a great experience for our customers.

“I’m pleased we can accelerate the transition of Tigerair to an all Boeing 737 fleet which will help get the business into a better financial position moving forward.”

Tigerair aircraft photo gallery:

Virgin Australia to drop Hong Kong

Virgin Australia has announced it will withdraw its services between Australia and Hong Kong following a comprehensive review of the route. The Hong Kong market has remained challenging for the airline and demand has continued to decline following ongoing civil unrest. These factors, combined with growing uncertainty around the recent coronavirus outbreak, have led to the decision to cease operating services.

Virgin Australia previously announced the suspension of its Melbourne-Hong Kong services in November 2019, which is effective from February 11, 2020. The Sydney-Hong Kong service will cease operating from March 2, 2020.

Guests booked to travel on services between Sydney and Hong Kong from March 2, 2020 onwards, will be contacted by Virgin Australia via email, or by their travel provider to provide alternative arrangements.

Virgin Australia aircraft photo gallery:

Virgin Australia becomes the first operator of Split Scimitar® Winglets in Australia

Virgin Australia Airlines is now the first airline in Australia to install Split Scimitar Winglets on its Boeing Next Generation 737-800 aircraft. The Aviation Partners Boeing (APB) product, a retrofit of the existing Blended Winglets, is the most advanced technology winglet ever produced, offering unprecedented fuel savings and carbon emissions reductions for the world’s most popular commercial aircraft.

Installation on the first aircraft was completed last week in Christchurch and now Virgin Australia can expect to reduce fuel consumption by about 200,000 liters per aircraft per year. The resulting carbon dioxide emissions reduction is about 515 tonnes per aircraft per year.

Since launching the Split Scimitar Winglet program for the Boeing Next-Generation 737, APB has taken orders and options for over 2,200 systems, and over 1,200 aircraft are now operating with the technology. APB estimates its products have reduced aircraft fuel consumption worldwide by over 9.8 billion gallons to-date, thereby eliminating over 104 million tons of carbon dioxide emissions.

Virgin Australia pushes back its first Boeing 737 MAX delivery to July 2021

Boeing

Virgin Australia has announced it will delay the delivery of its first Boeing 737 MAX aircraft.

The airline has 48 copies on order (23 MAX 8s and 25 MAX 10s).

The first delivery has been delayed from November 2019 to July 2021. The first delivery will be a MAX 10.

Virgin Australia leads Australian first with delivery of sustainable aviation fuel at Brisbane Airport

Virgin Australia today announced it has achieved an Australian first, with the successful completion of a trial to deliver sustainable aviation fuel through Brisbane Airport’s general fuel supply system.

Working in partnership with the Queensland Government, Brisbane Airport Corporation, US-based biofuel producer Gevo, Inc. and supply chain partners Caltex and DB Schenker, Virgin Australia led the procurement and blending of sustainable aviation fuel, or biojet, with traditional jet fuel for supply into the fuel infrastructure at Brisbane Airport.

This is the first time that sustainable aviation fuel has been delivered through the general fuel supply system at any airport in Australia and makes Brisbane Airport one of the few airports globally where this has occurred.

As a result of the trial, biojet has now been used to fuel 195 domestic and international flights departing from Brisbane Airport, travelling more than 430,000 kilometres to destinations across Queensland, Australia and around the globe.

Biojet meets recognised international quality and safety standards and contributes to lower levels of carbon emissions compared to traditional fossil jet fuel on a life cycle basis. It can be derived from sustainable sources including sugarcane bagasse, molasses, wood waste and agave and is already in use at major airports in Oslo and Los Angeles.

Virgin Australia Airlines Group Executive, Rob Sharp, said the airline was proud to lead the delivery of sustainable aviation fuel into the fuel infrastructure at Brisbane Airport.

“Virgin Australia is leading the way in the production and use of sustainable aviation fuel in Australia. We recognise that there is a great opportunity to develop a thriving sustainable fuels industry, which will help to reduce emissions and drive investment and jobs growth in Australia.

“The successful completion of the trial at Brisbane Airport is the first important step in ensuring Australian airports and the fuel supply chain will be ready for the regular supply of sustainable fuels in Australia.

“We would like to thank the Queensland Government and our partners for their involvement and look forward to fuelling more flights departing from Brisbane Airport with biojet over the next 12-18 months,” he said.

Speaking from Brisbane Airport, Queensland Premier, the Hon Annastacia Palaszczuk, said she was pleased with the work that had been undertaken with the trial to progress developing a local biofuels industry in Australia.

“This is another step forward in a homegrown biofuels industry – one that my government is supporting. Our own biofuels producers have a ready customer in Virgin Australia and I look forward to their cooperation growing,” Premier Palaszczuk said.

Brisbane Airport Corporation (BAC) Chief Executive Officer, Gert-Jan de Graaff, said the initiative was clearly aligned with BAC’s strategy to reduce energy consumption and carbon emissions.

“BAC is committed to reducing Brisbane Airport’s impact on the environment and putting in place programs that help us to manage and minimise the long-term impacts of climate change.

“We are very proud to be the first airport in Australia, and one of only a few hubs in the world, to have biofuel as part of its fuel supply system as it will help reduce Brisbane Airport’s carbon footprint even further by assisting the airlines to reduce their emissions,” Mr de Graaff said.

Caltex Executive General Manager, Fuels & Infrastructure, Louise Warner, said that Caltex was delighted to support Virgin Australia’s trial of biojet in the Australian airspace.

“Our team at Lytton used their extensive supply chain skills and jet fuel quality control knowledge to manage the successful biojet supply trial, right here in Queensland.

“As a proud Australian company and Australia’s largest supplier of transport fuels, we support the investigation of alternative fuels such as biojet as part of the future fuel options for Australia, and we acknowledge Virgin Australia’s leadership in achieving this important milestone,” she said.

Photos: Virgin Australia.

Virgin Australia converts ten orders for the 737 MAX 8 to the larger MAX 10

Boeing has made this announcement:

Boeing and the Virgin Australia Group announced the airline is adding the largest and most efficient member of the 737 MAX family to its growing single-aisle fleet. The carrier has converted ten orders for the 737 MAX 8 (above) for the larger MAX 10 variant (below).

Aerial view of Sydney, Australia

The airline, which has a number of 737 MAX 8s on order, said it saw the value of adding the MAX 10 to the mix as the aircraft will provide additional capacity and flexibility.

Virgin Australia Group Chief Financial Officer Geoff Smith said, “We are pleased to be welcoming the 737 MAX 10 aircraft into our expanding fleet in 2022. The addition of the 737 MAX 10 will provide us with additional flexibility and capability to support our network and operations. We are proud to become Australia’s first operator of the 737 MAX and we look forward to the opportunities that operating this type of aircraft will open up to us.”

With its headquarters in Brisbane, Australia, the Virgin Australia Group is the country’s second-largest airline with a fleet of more than 130 aircraft. The Next-Generation 737 has formed the backbone of the Group’s fleet with more than 80 currently in operation and the 737 MAX is expected to bolster the Group’s fleet.

The MAX 10 is the largest member of the 737 MAX aircraft family. The airplane will offer operators the lowest cost per seat mile of any commercial aircraft and fly 200 nautical miles (370.4 km) farther than today’s Next-Generation 737s. This extended range means that the 737 MAX 10 will be able to cover 99 percent of single-aisle routes around the world.

Virgin Australia joins more than 20 customers who have placed over 500 orders and commitments for the MAX 10. In all, the 737 MAX is the fastest-selling airplane family in Boeing history, having attracted more than 100 customers and nearly 4,700 orders.

Images: Boeing.

Virgin Australia to offer WiFi for all trans-Tasman flights

Virgin Australia today unveiled a suite of enhancements to make the journey to New Zealand even more comfortable for Australian travellers, including becoming the only airline to offer WiFi for all Trans-Tasman flights.

From October 28, 2018, all Virgin Australia guests flying to Auckland, Christchurch, Queenstown, Wellington and Dunedin will receive:

A substantial meal and drink included in all fares;
At least 23kg of baggage included in all fares;
WiFi on all flights including 15 minutes of complimentary access; and
Increased Velocity Frequent Flyer Points and Status Credits earn potential.

Virgin Australia Airlines Group Executive Rob Sharp, said the airline was excited to provide an even better product and service for guests travelling to New Zealand.

“Last year, 1.5 million Australians flew to New Zealand and we’re looking forward to making their trip across the ditch even more enjoyable with a meal and drink as well as WiFi so they can keep connected whilst in the sky,” he said.

“We’re committed to expanding our presence in New Zealand with new services including flights from Sydney to Wellington; Melbourne to Queenstown; and Newcastle to Auckland as well as extra flights to Auckland, all of which commence in the next couple of months.”

Virgin Australia’s award-winning loyalty program, Velocity Frequent Flyer, has also announced new benefits for members travelling to Short Haul International destinations such as New Zealand, Bali, Fiji, and Samoa.

From 28 October, Velocity members will now be awarded a minimum of five Points per dollar spent¹ on fares from New Zealand. Platinum, Gold and Silver members will continue to earn a Points Bonus meaning that Platinum Velocity members will now receive up to 10 Points per dollar spent.²

Velocity Frequent Flyer CEO Karl Schuster, said he was delighted to give Velocity members more Points earning power, as well as improving the number of Status Credits earned on Short Haul International flights.

“For the first time, Velocity members will earn Points per dollar spent for Short Haul International destinations, rather than based on the distance travelled. Members will earn more Velocity Points when travelling to these destinations and we believe our Points offer for New Zealand flights is one of the best,” he said.

“Members will also experience improved Status Credit earn to many Short Haul International destinations including flights to and from New Zealand. This means members can achieve a higher Velocity status faster and unlock further membership benefits.”

Virgin Australia today also announced a codeshare arrangement with Singapore Airlines on flights between Melbourne and Wellington, for travel from 28 October. The flights, operated by Singapore Airlines, will operate four times per week and will allow Virgin Australia customers to seamlessly connect their travel and baggage onto other destinations and enable Velocity members to earn Points and Status Credits.³

¹Flights purchased in NZD or other currency will earn Velocity Points based on AUD-equivalent spent
² Flights purchased in NZD or other currency will earn Velocity Points based on AUD-equivalent spent
³ Where your Trans-Tasman or International Short Haul journey contains a flight with a VA flight number operated by a Velocity Partner Airline you will earn Points and Status Credits based on your fare class and the number of miles flown for the whole journey, including any flights operated by Virgin Australia

Top Copyright Photo (all other by Virgin Australia): Virgin Australia Airlines Boeing 737-8FE WL VH-YIM (msn 38716) DPS (Pascal Simon). Image: 942980.

Virgin Australia aircraft slide show:

Virgin Australia to fly from Hobart to Perth

Virgin Australia on September 27, 2018 will launch nonstop service from Hobart, Tasmania to Perth, Western Australia. The new route will operate three days a week with Boeing 737-800 aircraft.

Photo Above Virgin Australia. 2018 is the Chinese Year Of The Dog, and a pack of picture paw-fect pooches joined the Virgin Australia Cabin Crew and Dannii Minogue on the tarmac to celebrate the inaugural Sydney – Hong Kong flight.

Top Copyright Photo: Virgin Australia Airlines Boeing 737-8FE WL VH-YIS (msn 39926) DPS (Pascal Simon). Image: 942654.

Virgin Australia aircraft slide show:

Virgin Australia inaugurates Sydney – Hong Kong service

Virgin Australia operated its inaugural Sydney – Hong Kong flight on July 1, after lion dancers and drummers marched through Sydney Airport, led by Dannii Minogue.

Virgin Australia now operates 12 return services weekly from Australia to Hong Kong, with daily flights from Sydney and 5 flights per week from Melbourne.