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Virgin Australia to cut domestic capacity 2% in effort to return to profitability



News

By Loren Webb

Virgin Australia says it will retire five ageing aircraft and reduce domestic capacity by two per cent in the first half of next year as it focuses on more profitable routes.

Virgin also said it would suspend its Melbourne to Hong Kong flight from February 11, which has underperformed with recent protests in the former British colony, and redirect the A330-200 aircraft on a new route between Brisbane to Tokyo.

Chief executive and managing director Paul Scurrah told shareholders at Virgin’s annual general meeting on Wednesday that the Tokyo flight was a “great opportunity”.

The airline will begin flying from Brisbane to Tokyo’s Haneda Airport from March 29. The 2020 Olympics begin in Tokyo in July.

Virgin Australia said also said it would resume its popular flight from Melbourne to Denpasar, Bali, from March 29, assuming it receives regulatory approval.

It will scrap flights from Canberra to Perth, the Gold Coast to Perth, and Sydney to Christchurch, while adding more flights between Auckland and Sydney.

Virgin said it would retire two A320s from its Tigerair Australia subsidiary and three Fokker 100s from its regional business.

“Flying to the right destinations, with the right customer demand, and the right sized fleet with improve our financial performance,” Mr Scurrah said.

There were many instances where Virgin Australia and Tigerair both have had aircraft operating on the right routes at the same time, he said.

The company is looking to re-focus Tigerair flights on key holiday destinations, he said.

Virgin Australia is trying to reduce costs after an underlying loss of $71.2 million last financial year.

The airline is keeping its flight from Sydney to Hong Kong.

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