Virgin Australia wants Boeing 787 Dreamliners for Virgin 2.0

A proposed blueprint for the new Virgin includes adopting the Boeing 787 as its sole long-range jet.

By David Flynn, May 14 2020
Virgin Australia wants Boeing 787 Dreamliners for Virgin 2.0

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.

David

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.

Qantas - Qantas Frequent Flyer

22 Jan 2015

Total posts 72

Let's hope they plan on paying Boeing with more than just “conditional” credits, or was it QLD tax payers' dollars? Too many theories these days, can't keep up haha

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 193

Playing Armchair CEO of VA 2.0 is a national pastime after all! Everybody from VA fanboys to the harshest VA critics are experts ;)

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 109

I'm a West Australian so don't really care if VA stays in Brisbane or goes- but theres gotta be a significant economic boost at a state level for Queensland to want to keep VA there. Spose they did invest in one way or another - could they finance the opening of new routes in time from Brisbane and grow the QLD tourist industry like that? Aside from more jobs, there's obviously something attractions be that the QLD government wants from VA.

16 May 2020

Total posts 1

Wild idea but could be due to the amount of jobs host with them already in QLD. The real-estate and facilities being used and shared by other kinda unrelated companies that may depend on that collab that may not be viable otherwise.

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 109

There must be some lucrative aircraft deals to be secured - especially on the Boeing side of things. Interested to see what the plans are with the max jets if Virgin continues..re negotiate pricing or scrap all together.

Virgin Australia - Velocity Rewards

30 Aug 2018

Total posts 6

Boeing and Airbus are going to be desperate to keep their production lines humming, I suspect some forms of "creative" finance (like the US Export-Import bank) might get involved.

QF

11 Jul 2014

Total posts 404

Restarting the airline industry is going to be a long drawn out process, short term any major airline would be happy to pass a couple of aircraft onto VA 2.0 for a small cost. Always better to get something for a product rather then nothing.

11 May 2020

Total posts 3

Bloody lovely, that's what I say. Like a nicely aged Coonawarra cabernet, Dreamlines give me the warm and fuzzies.

Virgin Australia - Platinum

26 Jun 2011

Total posts 68

Not sure who will be in the market to purchase their four 777's. There's going to be an excess of them around with Delta announcing they are retiring their 777 fleet.

08 Feb 2018

Total posts 78

I agree. A 9 abreast economy 777 with premium and the Biz would surely be a good thing to keep for when US or other Intl routes reopen.

Qantas - Qantas Frequent Flyer

26 May 2014

Total posts 427

Delta are retiring 777-200ER and LR versions, of varying age, so not quite the same as VA's -300ERs, but anyway, there will be no market for used large aircraft for some time.

15 May 2020

Total posts 1

As most new owners will want to place their own CEO, the current guy might not get his "druthers". In any csse the first cab of the rank will be 'domestic' which doesn't require 787 Dreamliners. What VA will need is lots of 737 Max, or keep the TIGER airplanes & add more Airbus airplanes )A330, A321 Neo). VA should drop the international business until it can turn a profit here for the next 3-5 years. International experts have said including Boeing boss, that International air travel will not be back to 100% for 5 years from when flying recommences {2021)

22 Jan 2018

Total posts 78

With so many airlines not Returning to pro covid capacity anytime soon, I'm sure VA can wet or dry lease aircraft for a good deal from several airlines.

Singapore Airlines - KrisFlyer

14 Jan 2014

Total posts 310

Ahhhh not the Nightmare Liner when you have the far superior A350 on offer!!

08 Feb 2018

Total posts 78

Oh yeah let's do what qantas does...

Chasing qf is what hit them in trouble in the first place. Please please please do something different and carve out a niche or product proposition

08 Feb 2018

Total posts 78

thanks for the downvotes qf fanboys

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 109

Yes would prefer a replacement fleet of A350s then the Dreamliners - that Xtra wide cabin width..the economy class on 787 flights Ive taken are the most uncomfortable and squished I have ever been in. Felt like a domestic 737 seat albeit some extra leg room.

the only aircraft V2 should be thinking of leasing are Virgins current B738s, but at aorund 1/2 or less of the previous lease payment costs.

06 Feb 2014

Total posts 116

Qantas may be worried here....Virgin is about tro reduce its cost base by getting out of poor leases and get new cheap to run aircraft on competitive terms....

Joe
Joe

03 May 2013

Total posts 445

Man can these administrators manage to talk up Virgin any better?! As if Virgin can afford to think about a new model intro and costs involved while its on life support. Biggest joke of the administration period I'd say.

just admin should focus on debt reduction, not spending $$$ they haven't got


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