The Virgin Australia Group has today revealed its plans to build a stronger, more profitable and competitive Virgin Australia, as the airline prepares to leave voluntary administration under the ownership of Bain Capital. Virgin Australia Group CEO Paul Scurrah said the plan will help to re-establish Virgin Australia as an iconic Australian airline.
Today’s press release revealed Virgin Australia’s six-point plan for success:
- Overhaul the cost base, and simplify everything, starting with the fleet
- Focus on customer value
- Harness culture
- Investment in world class digital and data technologies
- Strong balance sheet and investment capital for both transformation and growth
- Jobs and future growth
So, with that in mind, what’s set to change?
In this post:
No more Tigerair
Virgin Australia’s budget arm Tigerair was completely shut down soon after the pandemic set in, with the airline’s pilots made redundant and cabin crew stood down. Today’s announcement confirmed that the Tigerair Australia brand will be discontinued, with the group citing dwindling customer demand for the decision. Despite this, Tigerair Australia’s Air Operator Certificate (AOC) will be retained to provide the opportunity to restart an ultra-low-cost carrier in the future.
Transition to an all B737 fleet
As of December 31 2019, over half of the Virgin Australia Group fleet of around 130 aircraft was leased. As expected, the group will transition towards an all Boeing 737 fleet for domestic and short-haul international operations. This is the end of the line for ATR 72, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft. On the other hand, some good news is that the group have opted to retain their regional and charter fleet while the company reviews options at Virgin Australia Regional Airlines.
Long-haul flights scrapped
Given current international border restrictions, Virgin Australia will continue to suspend flights to Los Angeles and Tokyo for the time being. The group intends to recommence and grow long-haul international flights once sufficient demand returns. Whilst Virgin Australia won’t be flying long-haul, customers will continue to have access to such flights with the airline’s codeshare partners.
Domestic lounge network to stay
Virgin Australia will continue operating a network of lounges in “key domestic locations” with plans to re-open once sufficient demand returns.
Velocity points honoured
Velocity points are to be honoured under the new ownership of Bain Captial. However, the group has not mentioned if they plan to devalue the Velocity Frequent Flyer program in the future.
Travel credits extended until 2022
Thankfully, Virgin Australia will preserve the value of travel credits post-administration. For customers with bookings made prior to administration, travel credits will now have an expiry date of at least 31 July 2022, for travel until 30 June 2023.
Further information about the use of credits will be provided to customers in due course. The group have said they will notify customers and travel agents directly of any flight cancellations associated with the announcements made today. In addition, Tigerair Australia customers will be provided a travel credit for use with Virgin Australia.
3,000 Jobs Axed
Virgin Australia has said they are confident the group will be able to retain two-thirds of its 9000 staff, however, around 3,000 airline staff can expect to lose their jobs.
In a press release, Virgin Australia Group CEO Paul Scurrah mentioned, “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.”