Virgin Australia resets as a Boeing 737 operator, Tigerair Australia brand closed down

Virgin Australia Group has made this announcement:

Key points:

• Plan for a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration
• Focus on delivering exceptional experiences at great value with Virgin Australia’s core domestic and short-haul international business
• Virgin Australia to provide customers with the value of travel credits post administration with validity dates extended for bookings made prior to administration
• Resetting Virgin Australia to meet lower global and Australian demand, including:
– Reduction in cost base to meet sector uncertainty and COVID-19 market conditions
– Securing approximately 6,000 jobs when the market recovers with 3,000 roles impacted
– Simplified all-Boeing 737 mainline fleet and the retention of the regional and charter fleet, but removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types.
– Long-haul international flying important part of plan but suspended until global travel market recovers
– Tigerair Australia brand discontinued with Air Operator Certificate (AOC) retained to provide option for ultra-low-cost operations when market recovers.
– Continued commitment to regional and charter flying.

The Virgin Australia Group has announced a plan for a stronger, more profitable and competitive business, building on its unique culture and securing approximately 6000 jobs as it prepares to exit voluntary administration under the ownership of Bain Capital.

CEO COMMENTARY

Virgin Australia Group CEO and Managing Director Paul Scurrah said together with Bain Capital, the plan will help to re-establish Virgin Australia as an iconic Australian airline, bringing strong competition for travellers while securing approximately 6,000 direct jobs and indirect employment for more than 30,000 Australians.

“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than three per cent of last year and ongoing changes to government travel restrictions,” said Mr Scurrah.

“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world.

“In a country as big as Australia, strong competitive airlines are critical in helping restore the economy, which is why in the face of the worst crisis our industry has ever seen, a well-capitalised Virgin Australia Group with a solid and sustainable future is a great outcome for Australians and the nation’s economy.

“Even when we do see a return to pre-COVID-19 levels of travel, successful airlines will be influenced by demand and look very different than the way they did previously, requiring long-term capital, a lower cost base and be more focused on providing exceptional experiences through a combination of great people and world class technologies.

“Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market. We believe that over time we can set the foundations to grow Virgin Australia again and re-employ many of the highly skilled Virgin Australia team.

“Our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10-million-member strong Velocity Frequent Flyer program, continuing to offer an extensive network of destinations, a domestic lounge network and value for money for customers.

“Bain Capital recognises the importance of Virgin Australia’s loyal customers, and that’s why they will be provided the value of their travel credits post administration with validity significantly extended to ensure they have plenty of opportunity to book tickets to their favourite destinations.

“While these changes are important to manage the impact of COVID-19, they involve some very tough decisions. We expect approximately 3,000 roles will be impacted as a result of the changes announced today. However, our intention is to secure approximately 6,000 jobs when the market recovers with aspirations for up to 8,000 in the future. To those that leave the business, I want to thank them for the role they’ve played in making this a great airline. They will be closely supported through our alumni program, have all their entitlements honoured and be provided with a two-year extension of employee travel benefits and early access to retiree and long service benefits.

“Our people have shown incredible resilience under tough circumstances. They are what set the Virgin Australia Group apart and make us so unique. We hope to welcome many of them back as we start to grow again in the future.

“Virgin Australia has been a challenger in the Australian market for 20 years, and as a result of this plan and the investment of Bain Capital we are going to be in a much stronger position to continue that legacy.”

PLAN FOR A STRONGER VIRGIN AUSTRALIA GROUP

The plan is anchored around six key points:

1. Overhaul the cost base, and simplify everything, starting with the fleet

To build a successful airline, the Group will align costs with a depressed and uncertain revenue outlook, simplifying its fleet to realise cost efficiencies and remove operational complexity.

The Group will move to an all-Boeing 737 mainline fleet for domestic and short haul operations which will see the removal of ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft.

The Group’s regional and charter fleet will remain, while the company reviews options at Virgin Australia Regional Airlines (VARA), including different operating models to support continued regional and charter flying.

The Group will also undertake a supplier contract review across its operations including products, services and facilities to better align with the company’s future size and requirements and lowering costs significantly.

Virgin Australia will consolidate its footprint and will move its corporate headquarters to 275 Grey Street in Brisbane’s Southbank. This follows a consolidation of its corporate offices in Sydney.

Long-haul international operations are an important part of the Virgin Australia business. However, given current international travel restrictions, the airline will continue to suspend flights to Los Angeles and Tokyo with the intention to recommence and grow long-haul flights when sufficient demand returns. Customers will continue to have access to international markets through the airline’s codeshare partners.

The Tigerair brand will be discontinued in the market as there is not sufficient customer demand to support two carriers at this time. Tigerair Australia’s Air Operator Certificate (AOC) will be retained to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.

Note: Tigerair Australia suspended operations on March 25, 2020.

2. Focus on customer value

Virgin Australia aims to be the best value carrier in the market, not a low-cost carrier. It will offer exceptional experiences at great value, regardless of purpose of travel. The airline will serve business travellers, including corporates and customers travelling for a holiday and visiting loved ones, and maintain a two-class cabin offering.

Virgin Australia will continue to offer choice and convenience through an extensive network of domestic and short-haul international destinations including frequent capital city connections and services to leisure and regional markets as part of the company’s future network plans. Virgin Australia will also maintain a network of lounges in key domestic locations with a plan to re-open when demand returns.

Virgin Australia currently operates a reduced network of services to 28 towns and cities across Australia and will continue to add destinations and frequencies in line with demand and to support the nation’s economic recovery from COVID-19.

Virgin Australia will continue to focus on delivering the best on-time performance and maintain an exceptional safety record and safety culture.

In response to COVID-19, Virgin Australia has introduced a range of health and wellbeing measures including a pre-departure eligibility questionnaire, contactless check-in, expanded social distancing measures, and more frequent cleaning onboard and at the airport.

3. Harness culture

The Group’s culture is unique and is the heart and soul of both the airline and Velocity Frequent Flyer. Over the past 12 months, the Group has gone to great lengths to unlock its culture and harness the spirit of its people. The Group will continue to reinvigorate the Virgin Australia brand and its passion for customer service, while embracing the diversity, talent and strength of its people.

4. Investment in world class digital and data technologies

The Group will invest significantly in the comprehensive digital re-platforming of both the airline and Velocity Frequent Flyer program. It will accelerate the Group’s vision for the future, to not only improve Virgin Australia’s commercial capability and guest experience, but significantly enhance the employee experience and increase the pace of profitable revenue growth, enabling faster and bigger job growth opportunities.

5. Strong balance sheet and investment capital for both transformation and growth

The Group will emerge from Voluntary Administration with a strong balance sheet, worthy of an investment grade rating, providing resilience and future growth potential.

Backed by Bain Capital, one of the world’s leading private investment firms with more than $AUD150 billion assets under management, Virgin Australia will have a strong balance sheet to withstand material future shocks to the industry.

6. Jobs and future growth

The Group’s people have shown extraordinary resilience during this uncertain period and the focus now is to preserve as many jobs in the immediate term as possible while building a business that is healthy and sustainable for decades to come.

As a result of the changes announced today, including the transition to a single Boeing 737 fleet for domestic and short-haul flying, it is expected approximately 3,000 jobs will be impacted, primarily across the operations functions, and corporate roles which directly support the operation. Formal consultation with unions and employee groups has commenced today, and all options including voluntary redundancy, redeployment, leave without pay and flexible work arrangements will be explored to retain as many jobs as possible.

While devastating for our people, making these changes now will secure approximately 6,000 jobs once market demand recovers, with potential to increase to 8,000 jobs in the future. Team members who remain stood down as the Group waits for domestic and international travel restrictions to ease, or are on Leave Without Pay, will continue to receive the JobKeeper payment until it expires in March.

All team members that leave the business will depart with care and respect. Their entitlements will be paid in full and the Group is working with over 100 partners to identify short and long-term redeployment opportunities.

TRAVEL CREDITS AND SUPPORT FOR GUESTS

Bain Capital understands customers and staff are at the heart of the Virgin Australia business. As an acknowledgement of this, all travel credits and Velocity Frequent Flyer points will be carried forward under its ownership.

Virgin Australia will provide customers with the value of their travel credits post administration. To preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023. Further information about the use of credits will be provided to customers in due course.

Customers and travel agents will be notified directly of any flight cancellations associated with the announcements made today. Tigerair Australia customers and those affected by any cancellations will be provided a travel credit for use on Virgin Australia operated services.

VOTE OF CREDITORS

Deloitte Restructuring Services partners and Administrators Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes were appointed on 20 April 2020. They have entered into a binding sale agreement for the business with Bain Capital and continue to work with Bain and Virgin Australia management on the restructuring of the airline.

With full support of Deloitte and Bain Capital, this plan will form part of a Deed of Company Arrangement (DOCA), which will be put to a vote at the second creditors’ meeting.

Tigerair Australia aircraft photo gallery:

Tigerair Australia aircraft slide show:

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Brussels Airlines optimizes its short-haul product

Brussels Airlines has made this announcement:

Brussels Airlines optimizes its short-haul product and herewith closer aligns with the Lufthansa Group Network Airlines to offer its customers an even smoother travel experience. This way, the Belgian hub airline can participate in future Group-wide innovations. At the same time, the Belgian company chooses to continue to highlight its Belgian identity and promote Belgian partners. Five new travel fares will be available for bookings as from August 18 for flights as of September 1, 2020.

By introducing the Lufthansa Group travel fares on its short- and medium haul network, Brussels Airlines wants to offer its guests a smooth and consistent travel experience throughout all Lufthansa Group Network Airlines (Austrian, Brussels Airlines, Lufthansa and Swiss). With three new Economy Class fares, two Business Class fares and several add-ons, guests can tailor their travel to their preferences. By implementing Lufthansa Group standards, the Belgian airline will benefit too from investments by the Group in IT, product development and passenger experience. Brussels Airlines continues its buy-on-board concept* with delicious, healthy and fresh food from partners such as Foodmaker.The airline offers three different options in Economy Class:

Economy Light, the basic fare as lowest price option for the cost-conscious traveler who flies with hand luggage only, requiring limited flexibility.
Economy Classic, the standard fare for those who wish to travel with the classic comforts included in the price of their ticket, like a 23kg checked baggage and a limited degree of flexibility.
Economy Flex offers travelers a high degree of flexibility when organizing their travels, with a free change of reservation.

In all medium- and long-haul Economy Class fares, across the entire Lufthansa Group, 8kg carry-on baggage is included on top of a small personal item, so connecting flights across the Group Network Airlines are standardized.

Next to three Economy fares, the airline continues to offer the exclusive comfort of Business Class, with two different fares, tailored to the needs of business guests:

Business Saver: for guests who want to travel with Business Class comfort, requiring a certain degree of flexibility
Business Flex: for guests that want all Business Class comfort and full flexibility, including free refund

Both Business Class fares include two pieces of carry-on luggage of 8kg on top of a personal item.

Since the coronavirus crisis and as part of the new customer experience, all payments during the guests’ journey will be cashless. This concerns the payments at the airport for excess baggage as well as all payments on board.

Independent of which fare is chosen, seating together is included, and so is the caring service of Brussels Airlines’ ground staff and cabin crew. All new travel fares are eligible for rebooking.

Brussels Airlines aircraft photo gallery:

Brussels Airlines aircraft slide show:

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Virgin Atlantic files for bankruptcy protection in the United States

From CNN:

“Virgin Atlantic has filed for bankruptcy in the United States as it races to finalize a $1.5 billion plan to rescue it from the aviation industry’s worst crisis.

The company, which is based in the United Kingdom, filed for Chapter 15 bankruptcy protection in New York on Tuesday, which shelters the US assets of foreign companies undergoing restructuring proceedings in their home country.”

Read the full article.

Porter Airlines delays re-start to October 7

Porter Airlines is updating its return-to-service date to October 7, 2020 from the previously-announced target of August 31, 2020.

Key factors affecting the ability to restart service include the Canada-U.S. border remaining closed to non-essential travel until at least August 21; the Atlantic Canada travel bubble that restricts movement beyond the region; non-essential travel advisories issued by governments; and mandatory quarantine rules.

“We never intended to suspend operations for such an extended period of time,” said Michael Deluce, president and CEO, Porter Airlines. “Unfortunately, the layers of travel restrictions are serving to keep most people at home and show no signs of easing. We will continue making decisions based on how the situation evolves.”

Porter is waiving change and cancellation fees on all fares booked through October 7, including Porter Escapes vacation packages.

Porter temporarily suspended operations as of March 21, due to COVID-19.

Porter Airlines aircraft photo gallery:

Porter Airlines aircraft slide show:

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Lufthansa to add more flights from Munich

Lufthansa has made this announcement:

In the late summer season, Lufthansa will take off from Munich to five further European destinations. Beginning September 7, 2020, the airline will be returning to Marseille, Gothenburg, Kiev and Sibiu/Romania, and from October 5, 2020 to Graz.

Already, Lufthansa has significantly expanded its European services during the Bavarian summer holidays and added the Greek island of Rhodes to its flight schedule. In addition, the cities of Birmingham, Izmir, Tbilisi/Georgia and Cluj and Timisoara in Romania are again available non-stop from Munich. Furthermore, Luxembourg Airport will be operating flights once again from September 1, 2020. Therefore, by the end of October, Lufthansa’s Munich timetable will again include 86 destinations in Germany and Europe and 13 long-haul destinations.

Passenger safety is Lufthansa’s top priority, especially with regards to maximum hygiene on the ground and on board. The lufthansa.com website provides information on all hygiene measures that the airline has instituted, the adapted in-flight service, the current flight schedule and the flexible options for travel arrangements.

Emirates to deploy its flagship Airbus A380 to Guangzhou

Emirates has announced that it will deploy its iconic Airbus A380 aircraft to Guangzhou from August 8, 2020. The airline has also restarted its A380 operations to Amsterdam and Cairo this week, and introduced a second daily A380 service to London Heathrow, serving market demand and offering customers more travel options.

Emirates has so far resumed A380 services to 5 cities and it will gradually expand the deployment of this popular aircraft in line with demand and operational approvals. The Emirates A380 experience remains highly sought after by travellers for its spacious and comfortable cabins.

Customers can currently fly the Emirates A380 daily to Amsterdam, four times a week to Cairo, twice daily to London Heathrow, once daily to Paris, and once weekly to Guangzhou (from 8 August).

Over the past week, Emirates has also resumed flights from Dubai to Addis Ababa, Clark, Dar es Salaam, Nairobi, Prague, São Paulo, Stockholm and Seychelles. With safety as a priority, the airline is gradually expanding its passenger services to 68 cities in August, returning to 50% of its pre-pandemic destination network.

Passengers travelling between the Americas, Europe, Africa, Middle East, and Asia Pacific can enjoy safe and convenient connections via Dubai. Customers from Emirates’ network can stop over or travel to Dubai as the city has re-opened for international business and leisure visitors.

COVID-19 PCR tests are mandatory for all inbound and transit passengers arriving to Dubai (and the UAE), including UAE citizens, residents and tourists, irrespective of the country they are coming from.

Reuters: FAA proposes requiring key Boeing 737 MAX design changes

From Reuters:

“The Federal Aviation Administration said on Monday it is proposing requiring four key Boeing 737 MAX design changes to address safety issues seen in two crashes that killed 346 people and led to the plane’s grounding in March 2019.

The agency is issuing a proposed airworthiness directive to require updated flight-control software, revised display-processing software to generate alerts, revising certain flight-crew operating procedures, and changing the routing of some wiring bundles.”

Read the full report.

Mesa Air Group signs five-year cargo contract with DHL Express, will add Boeing 737-400Fs

Mesa Air Group has made this announcement:

Adding two Boeing 737-400F to fleet
Five-year contract with service scheduled to start October 2020
Opening a new crew and maintenance base in Cincinnati

Mesa Air Group, Inc. has announced plans to begin providing air cargo service for DHL Express with Boeing 737-400F cargo aircraft.

Under the agreement, Mesa will operate two cargo aircraft from DHL Express Americas global hub at Cincinnati/Northern Kentucky International Airport for a five-year term. The company will lease the aircraft from DHL with the first scheduled to be in service this October.

British Airways adds more destinations this month

British Airways has made this announcement:

Throughout August, British Airways is resuming flying to more destinations, albeit with continued low frequencies while the impact of COVID-19 remains felt across the globe.

In Europe flights will resume to the holiday destinations of Bari, Bastia, Bodrum, Bordeaux, Catania, Figari, Frankfurt, Genoa, Kefalonia, Lyon, Luxembourg, Malta, Paphos and Pula, while further afield Antigua, Islamabad and Nairobi join the long-haul line-up.

Safety is at the heart of British Airways’ business and the airline has introduced a range of measures, which it requires customers and crew abide by. These include:

checking-in online, downloading their boarding pass and where possible self-scanning their boarding passes at the departure gate
observing social distancing and using hand sanitisers that are placed throughout airports
wearing a facemask at all times and bringing enough to replace them every four hours for longer flights
asking customers not to travel if they think they have any symptoms of Covid-19
cabin crew wearing PPE and a new food service, which reduces the number of interactions required with customers
asking customers to ensure they have everything they need from their hand luggage before departure, and where possible, storing their carry-on bag under the seat in front of them

The airline is cleaning all key surfaces including seats, screens, seat buckles and tray tables after every flight and each aircraft is completely cleaned from nose to tail every day. The air on all British Airways flights is fully recycled once every two to three minutes through HEPA filters, which remove microscopic bacteria and virus clusters with over 99.9% efficiency, equivalent to hospital operating theatre standards.

Qatar Airways resumes flights to Helsinki, grounds its A380s

Qatar Airways resumed three weekly flights to Helsinki on Wednesday, July 29, 2020, becoming the only Gulf carrier to serve four Nordic capitals. The resumption of Helsinki flights will see the national carrier of the State of Qatar operate 22 weekly flights to the Nordics, with daily flights to Oslo and Stockholm and five weekly flights to Copenhagen.

During the pandemic, in addition to scheduled passenger services, Qatar Airways Cargo have also operated a large number of scheduled freighters, charters and freight-only passenger aircraft to Oslo, Stockholm, Copenhagen, Gothenburg and Helsinki to support Nordic exporters and transport essential medical supplies and PPE to the region. With the resumption of passenger flights to Helsinki, the airline will operate 39 weekly flights to the Nordic region, providing more than 1400 tonnes of weekly cargo capacity each way.

Qatar Airways continues to lead the recovery of international air travel. By the start of August, the airline’s network will expand to close to 500 weekly flights to over 75 destinations. Passengers from the Nordics can connect via the Best Airport in the Middle East, Hamad International Airport to the largest and broadest network in the region with over 30 destinations across Africa, Asia and the Middle East

Qatar Airways operations are not dependent on any specific aircraft type. The airline’s variety of modern fuel-efficient aircraft has meant it can continue flying by offering the right capacity in each market. Due to COVID-19’s impact on travel demand, the airline has taken the decision to ground its fleet of Airbus A380s as it is not commercially or environmentally justifiable to operate such a large aircraft in the current market. The airline’s fleet of 49 Airbus A350 and 30 Boeing 787 are the ideal choice for the most strategically important long-haul routes to the Americas, Europe and Asia-Pacific regions.

Qatar Airways’ onboard safety measures for passengers and cabin crew include the provision of Personal Protective Equipment (PPE) for cabin crew and a complimentary protective kit and disposable face shields for passengers. Business Class passengers on aircraft equipped with Qsuite can enjoy the enhanced privacy this award-winning business seat provides, including sliding privacy partitions and the option to use a ‘Do Not Disturb (DND)’ indicator. Qsuite is available on flights to more than 30 destinations including London, Paris, and Frankfurt.

Qatar Airways’ home and hub, Hamad International Airport (HIA), has implemented stringent cleaning procedures and applied social distancing measures throughout its terminals. Passenger touchpoints are sanitized every 10-15 minutes and boarding gates and bus gate counters are cleaned after each flight. In addition, hand sanitizers are provided at immigration and security screening points. HIA was recently ranked “Third Best Airport in the World”, among 550 airports worldwide, by the SKYTRAX World Airport Awards 2020. HIA was also voted the ‘Best Airport in the Middle East’ for the sixth year in a row and ‘Best Staff Service in the Middle East’ for the fifth year in a row.

Qatar Airways aircraft photo gallery: