Virgin Australia's new owners, whoever they may be, are reportedly being asked to consider a rescue plan which includes eight Boeing 787 jets.
The Dreamliners – also flown by Qantas, among scores of other airliners – would replace all six of Virgin's Airbus A330s, which are currently leased on what's said to be very expensive contracts, plus all five Boeing 777-300ERs, four of which are owned and one leased.
The five Boeing 777s are dedicated to Australia-US routes, flying from Sydney, Melbourne and Brisbane to Los Angeles.
The A330s are nominally for Australia's east-west flights, although they have also been pressed into service to Asia, including now-abandoned flights from Sydney and Melbourne to Hong Kong and the new Brisbane-Tokyo route which was set to launch on March 29, before being scrapped once the coronavirus took hold.
Far from a new or novel idea
Replacing all eleven jets with a single type of aircraft has long been on the to-do list of previous Virgin CEO John Borghetti and current CEO Paul Scurrah, with both the Airbus A350 and the Boeing 787 in the frame.
Scurrah had already kicked off a review of the airline's long-range fleet before the airline went into administration on April 21.
“We are doing an exploration at the moment,” he confirmed during the presentation of the airline's June-December 2019 financial results on February 27. “If the deal is worth doing we absolutely want to do one this year, but it is too early to speculate.”
He also noted that "the A330, in particular, is not economical. When you look at its ownership costs combined with fuel performance, there are far better options out there which we are exploring at the moment."
Scurrah's corner-office predecessor Borghetti had many times stressed that there was no need to rush this replacement, especially given the fleet's relatively young age: the A330s rolled Virgin's hangars between 2012 and 2014, while the Boeing 777s arrived across 2009-2010.
“As we talk about wide-body replacements, and when we do it and what we replace them with, that’s really a long way away,” Borghetti noted two years ago, following the airline's results presentation for July-December 2017. “Some time in sort of, let’s call it early- to mid-2020s, we will probably look at changing those when the leases coincide for replacement.”
New airline, new airplanes
But that time could well be now. According to The Sydney Morning Herald, which claims to have spoken with several sources close to the bidding process, a blueprint for Virgin 2.0 being shared by administrators Deloitte wants that to-do to be marked as 'done'.
As reported earlier, lead administrator Vaughan Strawbridge has said his aim is on "keeping the business together and bringing Virgin as much out of administration in its current form as we can" – indicating that the new Virgin Australia could closely resemble the old one.
“It will be keeping the majority of the aircraft fleet together and taking on the majority of the business, with staff receiving continued employment through that process."
The first round of bids for Virgin Australia must be presented to Deloitte by close of business Friday May 15, although those pitches are categorised only as being "indicative non-binding bids."
Strawbridge has also revealed that of the 19 "interested parties" which have been crunching the numbers on a take-over bid, only around eight have received the "forward business plan around that Virgin 2.0 would look like."
However, some of the original 19 could re-emerge as consortium members, under the lead of the eight shortlisters, when it came to presenting a final bid by June 12.
The Queensland Government yesterday emerged as another potential suitor, launching what it calls 'Project Maroon' through the state-owned Queensland Investment Corporation in an attempt to not only bring the failed airline back into the skies and into profitability, but to keep it based in Brisbane.