Air New Zealand CEO: "we'll take Virgin Australia up a gear"

By David Flynn, June 10 2014
Air New Zealand CEO:

IN BRIEF | Air New Zealand CEO Chris Luxon is keen to ratchet up Virgin Australia when he joins Etihad Airways President James Hogan and an unnamed Singapore Airlines nominee on Virgin's board next month.

"I think we're all united about how we take Virgin up a gear" Luxon said, with job number one to bring the Qantas challenger back to profitability.

Virgin Australia posted an $84 million loss for July-December 2012, down from a $23 million profit in the same period last year, on the back of a domestic 'capacity war' between Virgin and Qantas – a battle from which both airlines have since withdrawn.

Air New Zealand, Etihad and Singapore Airlines together control just over 68% of Virgin Australia and recently channelled $350 million into the airline.

Luxon expects to work "constructively" with Etihad and Singapore Airlines.

"The dynamics between all the airlines is very, very positive and I think it's going to be a very constructive exercise," Luxon told Arabian Business.

"The big focus for us is really very much to get Virgin Australia profitable and I think it's going to be a very constructive and positive experience from the first of July."

"We all get along very, very well. I think we're all united about how we take Virgin up a gear."

"Virgin's done an exceptional job in the last three years" Luxon admitted. "It's been through a massive growth phase. The chance now is to ensure that it returns to profitability."

Read more: Etihad, Air NZ to work 'constructively' to revive Virgin Australia

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David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

10 Jun 2014

Total posts 1

Hey david, the "read more" link does not seem to be working, tells me the page cannot be found 

30 Aug 2013

Total posts 440

I think of the 3 airlines that essentially 'own' VA (SQ, EY and NZ), they'll go down the NZ path. Over the next 12 months I would expect status to be harder to obtain and retain (ie raising levels and no more 'status credits on reward seats' promos), selling un-sold J both internationally and domestically as cheaply as they can last minute with auctions and check-in offers to fill empty premium cabins (meaning the product is further devalued), raising points levels required for redemptions and releasing less premium award space to partners so they can sell it cheaply to their own members.


Qantas - Qantas Frequent Flyer

17 Jan 2012

Total posts 172

I have always wondered what direction Virgin Australia will take with their future product - Business Class in particular.  SQ, NZ and EY all have very different products with the new EY product as my favourite.

09 Nov 2011

Total posts 88

I seem to think this is more about things such as placing wide bodies on the East coast to fill at peak times rather than 3 737's partly empty. It may also see some of the EY multiple orders for aircraft coming Virgin's way so that there are 787's or A350's added to bring down costs. Maybe even some medium haul International routes on the way?? If there was going to be an overhaul of Velocity, I think it would be unwise to make things harder as that will push Qantas ex pats back. If anything more automation should be added to Velocity such as online upgrades, International award bookings etc. instead of having to call the contact centre.

Virgin Blue - Velocity Rewards

12 May 2011

Total posts 21

For all the supposed synergies that airlines claim to achieve, very few of them ever come to fruition. Look at the Jetstar/AirAsia "alliance" and the Star Alliance goals of making fleet purchases together - never happened and probably won't ever. It would be great if it could happen, but I think all the owners will play their cards very close to their chest as they're in co-opetition with each other (yes it's Marketing exams time) and are only aligned as far as keeping QANTAS on the backfoot as much as possible. Co-opetition rears its head when you look at the reasoning behind reduced points and no lounge access when Velocity members travel on a competitor to a destination covered by the Virgin Australia network (Pacific Islands). As there's not profit sharing or alliance covering those routes, they try and steer you towards their own metal. Same as when Velocity members choose to fly Air NZ to the US. Etihad appears to be on the outer, as Air NZ and Singapore Airlines get cosier once again.. but I'm not sure how long that will last for. 

Velocity can't be "Air New Zealand"ed because of the intense competition that Virgin AU has with QANTAS in this market and has to use the rewards program as an incentive to transition over. NZ can do as it wishes as it basically holds monopoly power in its home market. 

To stay competitive, Virgin AU will probably look at improving the lounge experience a little more (the catering.. is substandard but the wine bar is a great idea) and improving the business class offering on their A330s and B777s. Apart form that, they'd probably look at things that won't be adding too many costs. 

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