Virgin Australia CEO: twin-aisle jets off the agenda until late 2022

Virgin's international partners could be the key to US, Japan flights for the next few years.

By David Flynn, December 9 2020
Virgin Australia CEO: twin-aisle jets off the agenda until late 2022

Virgin Australia is unlikely to return to international skies with large twin-aisle Airbus or Boeing jets until the later half of 2022, says CEO Jayne Hrdlicka.

The airline can serve destinations such as New Zealand, the Pacific Islands and Bali with its workhorse Boeing 737s – including the new 737 MAX 10s due from 2023, which Hrdlicka – speaking at a CAPA Centre for Aviation event today – said "will do a great job for us in more traditional short-haul (than longer) international routes."

However, its more substantive international network previously relied on the longer reach of a mixed fleet of Airbus A330s and Boeing 777s which new owners Bain Capital scrapped as part of its restructure and reboot of Virgin Australia, with the airline shifting its focus to a largely domestic network built around the Boeing 737.

The six leased A330s opened up Asia, including axed routes to Hong Kong and a new Brisbane-Tokyo service which was aborted weeks before its March 29 2020 launch as COVID-19 took hold.

Meanwhile, five Boeing 777-300ER jets took the trans-Pacific routes from Sydney, Melbourne and Brisbane to Los Angeles under their wing.

The long-range long-haul outlook

While Virgin previously floated plans to relaunch long-range travel with up to eight fuel-efficient Boeing 787-9s, Hrdlicka said "we won’t go straight back to wide-body flying in the next 18-24 months."

But she noted that when the time comes to pull the trigger on those long-range jets, it would be a buyer's market.

"It's a good market for aircraft right now – narrow-bodies, wide-bodies – so I don’t think fleet will be a constraint."

While airlines continue to face "some timeframes and protocols that you can’t compress," Hrdlicka said that "having access to aircraft is much easier than it’s been probably in two decades, and the price per aircraft now is incredibly attractive."

New timeline for Tokyo

As reported earlier this week, Virgin Australia has asked the International Air Services Commission – a federal government body which oversees Australia's international airline activity, including routes and airport takeoff and landing slots – to extend its rights to the Brisbane-Tokyo route to 31 October 2021.

While the IASC has formally declared that the new Tokyo Haneda routes must be flown "from no later than 31 March 2021", Executive Traveller understands that the commission will meet with representatives of Qantas and Virgin Australia in early 2021 to consider a further extension.

That decision will be shaped by the government's own forecast of travel restrictions for 2021 as well as each airline's plans to resume flights between Australia and Japan – which in the case of Virgin Australia may now hinge on its partnership with ANA.

With regard to Tokyo, Hrdlicka said the airline was "maintaining flexibility with those slots, because we’ve got flexibility in aircraft, so I’m not giving you my projection on how long it’s going to take – it could be less, it could be longer – and we’ve got flexibility."

Reliance on partners

"I don’t think the most important thing to a traveller today is what your international network is going to look like," Hrdlicka said, adding "our frequent flyers have been really clear to us on what matters most to them, and that’s not it."

"Of course, it will become really important to them, and we’ve got a great mix of partners, so we’ll be able to augment what we’re not doing ourselves in the short term with partners."

Read more: Qantas, Virgin seek delayed take-off for new Tokyo Haneda flights

Hrdlicka maintains that "our first priority is domestic Australia, that’s job one."

"Job two is preparing for international, and international will come back at some point in 2021. Whether it’s New Zealand or other short-haul, and we will be ready for that when it comes."

 In terms of international partners, Hrdlicka singled out Delta Air Lines as " a really important partner for us to the US, and that’s a really strong relationship."

"Etihad is a really strong relationship, Singapore Airlines is a really strong relationship, so those are three really important anchors for the region, and then there’s a mix of other partners, which are also important but probably less top-of-mind at the moment."

Also read: Virgin rejigs Boeing 737 MAX order, delays delivery to 2023

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.

So reading between the lines, the only way Virgin can restart Brisbane-Tokyo by October 2021 is with ANA actually running the route, pending approval by AU and JA authorities. As for getting new long-range jets, either buying or leasing, that's clearly a long way off, so Virgin is basically ceding its international market to Qantas for the next few years.

14 Oct 2016

Total posts 87

I'd imagine it would have to be a wet lease situation where the primary call sign would be VA number and marked as operated by ANA. These two slots are for Australian airlines, so it can't just be gifted to ANA. I'm not sure of all the rules but even a wet lease could be challenged by Qantas at the IASC. 

Its in ANAs interest to stop JAL/QF from gaining a monopoly on the Australia to Haneda routes so will probably give virgin the support to get it started.

1A
1A

17 Sep 2019

Total posts 8

Bain made redundant all the wide body long haul pilots not allowing leave without pay until long haul international returns. These were among the longest serving and most experienced pilots in the company. They have NO flexibility to commence these flights in the timeframe mentioned unless the flights will be operated by ANA or Delta on behalf of Virgin. 

It’s all talk to slow down the rush of Velocity members abandoning the program. 

I think VA's only realistic option is that wet lease arrangement via ANA, but you can bet Qantas will dispute that. Qantas wanted both Haneda slots when they were put up for grabs, it was fair to split them between Qantas and Virgin at the time but Virgin can't expect to hang onto that Haneda slot for another 1-2 years when it happens to have the right aircraft.

Virgin Australia - Velocity Rewards

06 Mar 2015

Total posts 209

1A.

It's not just the Velocity members who are jumping ship it's a hell of a lot of Business Class travellers who were once quite loyal to VA.

This new Management have well and truly emasculated the once fine VA Business Class.

The rumours of what may for Business Class and International Flights  etc. is not good enough, there needs to be some definite plans put out and real soon otherwise the haemorrhaging will not be be able to be stopped.

08 Feb 2018

Total posts 114

I'll take their seats

Qantas - Qantas Frequent Flyer

16 Mar 2020

Total posts 12

they need to fix the current offering ASAP. 

As a gold member I flew PER MEL. No priority check in counter, no lounge, full plane 737, no catering, no wifi etc etc but fares are still pre admin level (and given lack of flights most passengers are paying higher fares). The only benefit was priority baggage, which at the other end didn't end up happening in any event...

14 Oct 2016

Total posts 87

Yeah, I think they do need to fix a few things in the short term like mentioned above in the next couple of weeks or risk a bit more of an exodus of Passengers. You don't want to be regarded as Jetstar service, Qantas prices.

In comparison, i've flown Qantas during this period and they had their lounges open with a reasonable spread and still had a reasonable service in the air, considering the issues presented by covid.

Virgin Australia - Velocity Rewards

07 Dec 2014

Total posts 169

Does it cost anything to convince the IASC to keep the slots for them? If not, they probably figure, tell them what they want to hear; keep it for now so options are kept open; decide later on what to do. I can't imagine other airlines are clamouring for them anyway.

I guess there is a possibility that Japan will be one of the early countries Australia allows travel to/from, so its probably more valuable than say slots at LAX or Europe.

QF

11 Jul 2014

Total posts 558

Those VA 737 planes are painful on short international flights or any flight over 4 hours, doesn’t matter how good the staff are I’m never doing it again. If you miss out on 1 of the 8 business class seats after 3 hours of flying you stand up to use the toilet and there is queue longer then the Apple store on a new product release day.

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 333

the 737's are fine for say trans tasman,pacific islands or bali.apart from hong kong or japan or usa no real need for wide bodies although having said that.can you imagine all the ex va clients shipping over to qantas who can offer a330's on most sectors.in fact from memory it was qantas domestics predecessor taa with the a300 who had an advantage of the only wide bodies domestically almost 40 years ago while the competition(ansett at that time)thought smaller but more frequent 727's and 737's was the answer.unknown fact it takes two 738's to fill one 332 domestically.

09 Sep 2020

Total posts 9

Just tell the truth about your intentions Virgin Australia, short,long  haul,because if you don't  you will lose your once loyal passenger base to your competitors.

11 Nov 2020

Total posts 2

I thought that VA owned 4 of the 777's outright, and the LA flight was well regarded..

Virgin Australia - Velocity Rewards

24 Jan 2018

Total posts 387

Well regarded and well patronised Max.  As for the service, even Delta flyers I spoke to thought the cabin service was better than they'd usually get in Delta metal.  But ......

Qantas - Qantas Frequent Flyer

04 Nov 2017

Total posts 270

The administrator's report from October 2020 reported that all of Virgin's 'owned' 737s and 777s were 'encumbered' (mortgaged) to the banks.  They were used as 'collateral' for bank loans.

In other words, EY/SQ/et al has already 'asset-stripped' most of the owned fleet.  Effectively leaving Bain with a leased and mortgaged fleet.



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