The Virgin Australia Group has revealed its plans for the re-establishment of the airline following Bain Capital's successful bid for the Australian carrier in July. The carrier, which entered into voluntary administration in April, now plans to focus on domestic travel and will become and all Boeing 737 airline.
Virgin Australia plans to become an all-Boeing 737 airline. Photo by Jack Prebble | AeroNewsX
Back in April, AeroNewsX reported that Virgin Australia entered into voluntary administration, due to massive debts brought on by the coronavirus lockdowns. After the successful purchase bid by Bain Capital, the Australian carrier now plans to "focus on delivering exceptional experiences at great value." The CEO of the Virgin Australia Group, Paul Scurrah, also confirmed that their “initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation.” The airline group was keen to stress that Virgin Australia will “be the best value carrier in the market” and will not be a low-cost carrier.
The airline group hopes that with the support of Bain Capital, this new plan will re-establish Virgin Australia as an iconic Australian airline. This new plan will allow the airline group to bring strong competition in the domestic market for travellers. The funding from Bain Capital will also boost the effort, while securing approximately 6,000 direct jobs and indirect employment for more than 30,000 Australians.
However, the plan does include 3,000 job losses, but the Virgin Australia Group CEO, Paul Scurrah remains hopeful that "when the market recovers," they may be able to "get back to 8,000 staff" in the future. The Managing Director of the airline group also said that “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.”
Simplified Boeing 737 Fleet:
As the Australian carrier moves towards more domestic and short-haul services, the airline will restructure itself towards an all-Boeing 737 fleet (excluding their regional operations). By doing so, the airline will benefit from a range of operational cost reductions such as pilot and crew training, route planning and aircraft maintenance. The move to a simplified Boeing fleet will mean that their Boeing 777 and Airbus A330 widebodies, in addition to their ATRs and Airbus A320s from Tigerair Australia will be discontinued. The group also said it would review “different operating models” that can continue to support Virgin Australia Regional Airlines (VARA).
A Reduced Route Network:
Virgin Australia currently operates a reduced network of flights to 28 towns and cities across Australia. The carrier is planning to add more destinations in line with passenger demand “to support the nation’s economic recovery from COVID-19.” According to the group's plan, the airline group will try to focus on delivering the best on-time performance, while remaining committed to maintaining the exceptional safety record and safety culture at the airline. The group said it will be discontinuing the Tigerair brand “as there is not sufficient customer demand to support two carriers at this time.” The group said they will retain Tigerair Australia’s Air Operator Certificate (AOC) for the option to operate an ultra-low-cost carrier in the future when the domestic market can support it.
Long Haul Operations:
In its new plan, Virgin Australia will mainly focus on short-haul operations and domestic services. However, the group did not rule out the possibility of returning to long haul operations. The airline said in their plan that “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.” The airline stressed that “customers will continue to have access to international markets through the airline’s codeshare partners.” Some of these partner airlines include Delta Air Lines, Singapore Airlines and Air Canada.
CEO of the Virgin Australia Group, Paul Scurrah said that by 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.” The CEO of the airline group ending by saying “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.”
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