Virgin Australia will sharpen its focus on the corporate market in 2022, and expects its new "premium lounge product" formerly known as The Club will play a large part in winning over what airline CEO Jayne Hrdlicka described as "value-conscious" business travellers.
That segment will be a neat fit into Virgin's mid-market position, Hrdlicka said at the CAPA Australia-Pacific 2021 Aviation Summit.
"We do believe there's a big part of the corporate market that is value-conscious. At the end of the day we're a value carrier (and) we are significantly better value than alternatives in the market place... it's not going to be appealing to everyone, but we're not trying to serve everyone."
Citing "a deep loyalty with corporate travellers," Hrdlicka said the forthcoming premium lounge program – to be launched in early 2022 – would be "an important part of the corporate market’s requirement."
"It won't be called The Club any more, it’ll be rebranded and be more consistent with who we are as a company and more aligned with our brand."
"We've spent quite a lot of time figuring out how we design (the premium program) that so it is purposeful and it's not trying to be something that we're not."
Winning back the business traveller
The SME (small to medium enterprise) segment will also be crucial to Virgin's 'back to business' strategy, with Hrdlicka saying that Virgin Australia has historically "been disproportionally successful in the small-to-medium sector relative to other (airlines)."
"We've probably lost a little bit of focus on that part of the marketplace in the last 5-7 years or so," she admitted, "(but) that focus is back. We've earned the right to recover some of the customers who may have decided (in the past) that we didn't care about them any more."
Hrdlicka has set her sights on claiming a 33% share of Australia's domestic air travel market, which she said is slightly above the 31% share previously held by Virgin but also makes allowances for new challengers Regional Express and from early 2022 Bonza, which plans to fly up to either Boeing 737 MAX jets on mainly leisure routes in its first year.
"The market will rebalance," Hrdlicka maintains. "We're very clear about who we appeal to, the importance of the experience and what elements of the experience really matter."
Return to USA, Japan “an open question”
In addition to a solid domestic footprint, Hrdlicka said the airline "intends to be a strong player in international short-haul" flying, primarily to New Zealand.
However, she cast doubt over Virgin's plans to resume long-range international flying to the likes of the USA and Japan – routes which both Hrdlicka and airline owners Bain Capital have previously and repeatedly said they were committed to.
"Whether we go back in with long-haul flying ourselves is an open question," Hrdlicka said, "but if not, we will work with partners" such as ANA and Delta to serve those markets.
Virgin axed its long-range Boeing 777 and Airbus A330 jets as part of Bain Capital's sweeping 'rescue, rightsize and reboot' plan, leaving the carrier with a primarily short-range Boeing 737 fleet.