Virgin Australia is suspending all domestic flights except for a single Sydney-Melbourne return service, which will run once per day except for Saturdays.
All other flights, including to and from its operational headquarters and spiritual home at Brisbane, will be axed as of Friday April 10.
"Since our last capacity reduction announcement we have seen demand all but dry up, and our load factors are very low", Stuart Aggs, Virgin Australia's Chief Operations Officer, has written to staff in an internal email sighted by Executive Traveller.
Aggs says the pared-back schedule will remain in place until Monday 15 June.
"As you know, we are doing everything we can to preserve our cash balance, and given we are seeing little to no demand on our existing skeleton schedule, it is appropriate that we reduce our capacity further."
"As soon as demand returns and the border restrictions are relaxed, we stand ready to ramp back up to demand, which I know everyone is keen to do," Aggs ended.
Rescue flights continue
A statement issued by Virgin Australia explained that "as a result of government restrictions, less people are travelling and we have made changes to our schedule to reflect this."
“We continue to operate a daily service between Melbourne and Sydney, provide cargo transport locally and overseas, and operate charter flights including those assisting the government in bringing Australians home.”
This includes this month's repatriation flights from Los Angeles and Hong Kong which have been underwritten by the Federal Government, along with charter flights such as this weekend's Brisbane-Paris Boeing 777-300ER journey chartered by the French government.
One flight away from shut-down
This puts Virgin Australia one flight away from a total shutdown – a path which other airlines, including Austrian and EasyJet, have already embraced in a last-ditch attempt to survive what is looking like a prolonged coronavirus pandemic with an uncertain recovery curve.
"There has never been a travel environment in Australia as restricted as the one we see today," Virgin Australia CEO Paul Scurrah said recently. "We are now facing what will be the biggest grounding of aircraft in this country's history."
Virgin has also ramped up its push for a $1.4 billion bailout from the Federal Government, with Scurrah lobbying that the rescue package is essential not only to the airline's survival but to competition, painting a dark picture of a Qantas-Jetstar monopoly on domestic routes.
Virgin's $1.4bn bailout plan
It's reported that under the plan, if the airline was unable to repay the loan in full within two to three years, the government would take an equity stake in the company.
Qantas CEO Alan Joyce has responded that the Government "can’t pick winners and losers" and that any aid should be shared across the sector, with a suggestion that Qantas would ask for $4.2bn based on the proportional to the size of each airline.
Last weekend saw Virgin halt the transfer of its Velocity frequent flyers points to the KrisFlyer loyalty program of partner and stakeholder Singapore Airlines: a process which observers said would have imposed a substantial cash drain on an already financially-fatigued airline.
While Virgin had an estimated $1.1 billion of cash on hand at the end of 2019, Credit Suisse analyst Paul Butler has advised clients that Virgin could burn through $860 million of that cash stash by June and need a further $829 million next financial year.
The airline has suffered through seven straight years of losses, with an $88m loss for the most-recent half-year of July-December 2019.