PriceSensitive

Virgin Australia (ASX:VAH) slashes regional flights for “foreseeable future”

Economy
10 September 2020 12:48 (AEDT)

Source: AP

Embattled airline Virgin Australia is slashing flight routes across regional Australia as part of a rebuilding plan under its new owners.

Unable to survive the havoc COVID-19 wreaked across the travel industry, Virgin went into administration in April. United States investment firm Bain Capital rescued the airline with a $3.5 billion buy-out, which was finalised earlier this week.

Today, the company announced it would be scrapping 10 flight routes as it continues its post-COVID restructure.

The canned routes include flights from Sydney to Albury, Uluru, and Hervey Bay, and from Melbourne to Mildura and Brisbane to Cloncurry.

A Virgin Australia spokesperson said the routes are slashed for the “foreseeable future”.

“With the changes to simplifying our fleet and ongoing subdued customer demand, we have been required to make some adjustments to our network,” the airline said in a statement.

“We remain committed to regional Australia and plan to continue flying to 20 regional destinations across Australia,” the company said.

A turbulent journey

Today’s announcement comes a month after the company announced it would be axing 3000 jobs and culling its Tigerair business as it comes out of voluntary administration.

The company said at the time it would be relaunching as a stripped-back version of its former self, with a stronger focus on domestic flights and short-haul international business.

With a smaller focus comes a lower need for labour, hence the job cuts.

Nevertheless, Virgin CEO and Managing Director Paul Scurrah said the company expects to bolster its workforce back up by around 2000 jobs in coming years are travel ramps back up.

“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,” Paul said in August

Of course, another key reason for today’s flight cuts is Bain Capital’s plans to operate a fleet entirely composed of Boeing 737s.

Along with the job cuts last month, Virgin said it would be grounding its ATR, Boeing 777, Airbus A330, and Tigerair Airbus A320 aircraft.

With the simplified fleet, many flights to regional Australia become commercially unviable.

Virgin Australia is also slashing its international flight service from Sydney to Tonga.

Related News