Virgin Australia will drop its daily Sydney-Hong Kong flights from 2 March 2020, exiting not only Hong Kong but the 'greater China' play initiated and championed by former CEO John Borghetti.
The airline has also confirmed that its Melbourne-Hong Kong service, due to be 'suspended' from February 11, will not return, as the airline "withdraws (its) services between Australia and Hong Kong".
Virgin Australia CCO John MacLeod, in an internal staff memo sighted by Executive Traveller, said "This decision comes off the back of a comprehensive review of the route. We've observed a continuing decline in demand, following the recent civil unrest and growing concerns over the coronavirus outbreak in the greater region."
"These recent factors demonstrate that Hong Kong is no longer a commercially viable route for us to continue operating."
"This is a tough commercial decision, however we have some exciting new opportunities to look forward to, such as our inaugural flights to Tokyo taking off next month," MacLeod added.
Virgin Australia has confirmed the airline will shutter the Sydney-Hong Kong flights, and says passengers booked to fly between Sydney and Hong Kong will be contacted by the airline or their travel agent "to provide alternative arrangements."
From Hong Kong hero to zero
Virgin began flying between Melbourne and Hong Kong in July 2017, with Virgin founder Sir Richard Branson making an anonymous but noisy entrance to Melbourne Airport's international terminal hidden the head of a 32-metre 'dragon' accompanied by lion dancers and drummers.
Sydney-Hong Kong followed in July 2018, with the airline talking up plans for a foothold in mainland China itself, backed by
Chinese conglomerate HNA, the largest private operator of airlines in China, stumped up $159 million for a 13% stake in Virgin Australia, while HNA's Hong Kong Airlines and HK Express – the later since subsumed into Cathay Pacific through a $930 million buyout – were enlisted as a 'strategic partner' for connections into China and as a mainland market feed for Virgin.
From the outset Virgin was elbowing its way into crowded markets dominated by Qantas and Cathay Pacific, with the latter offering not only multiple flights each day but a raft of onwards connections to Europe and the Americas, along with other parts of Asia.
Former CEO John Borghetti saw Hong Kong Kong as the start of a determined and deliberate push into China, and in mid-2017 affirmed that "by the end of 2018 we will be in mainland China," with aim of eventually opening two routes to mainland China to take advantage of carriers owned by or affiliated to HNA.
New CEO Paul Scurrah remains confident of Asia's place on the airline's route map, but sees the pivot to Japan as being more sustainable, especially as it is underpinned by a new partnership with ANA offering codeshare flights and reciprocal points earning and lounge access.
Hong Kong joins the cut list sparked by Scrurrah's drive to 'right-size' the struggling carrier by "turning a great airline into a great business."
"Flying to the right destinations, with the right customer demand, and the right sized fleet will improve our financial performance," he noted at Virgin's 2019 AGM.
With no other international expansions on the horizon, the Airbus A330 dedicated to the Sydney-Hong Kong route is expected to be returned to the transcontinental trek between Australia's eastern capitals and Perth – a move which will be welcomed by many business travellers, considering the far superior business class seats and experience of the A330 compared to the smaller single-aisle Boeing 737.