Quarantine-free travel between Australia and New Zealand will take off on April 19, but Virgin won't resume most of its Kiwi flights until October 31.
Instead, the airline will focus on building out its domestic network and shoring up its market share in the face of competition from Qantas and Jetstar and attempting to see off the threat of new challenger Rex.
The move, announced as Qantas and Air New Zealand rushed to unlock over 30 routes and almost 300 weekly services across the pond, came as a surprise on the back of recent comments by Virgin Australia CEO Jayne Hrdlicka that a return to overseas flying "will be one of the first things we do."
"It will be anywhere where a (Boeing) 737 can fly, so that will include New Zealand, Fiji and Bali," Hrdlicka remarked on March 8.
Instead, the airline says it is taking "a more pragmatic approach" to both domestic and overseas flying, saying it was" mindful of evolving border requirements which add complexity to our business."
Virgin has previously pushed back a restart of NZ flights twice this year, first to March and then June.
"For this reason, we have suspended the sale of most New Zealand services until 31 October 2021", with the exception of some Queenstown flights slated from 18 September.
It's understood that the airline is also facing a shortfall of aircraft, with all of its Boeing 737s – a fleet that's some 25% smaller than when it entered administration, with many jets returned to leasing firms – currently committed to domestic routes. Virgin is now looking to lease back up to nine Boeing 737s, which could be used on trans-Tasman flights.
This means Virgin's short-term focus will be firmly on the home ground battle "as we push ahead with plans to grow our core domestic Australia operations."
This has most recently included the launch of new business class meals, moving to a fully 'buy on board' model for economy passengers, and reopening all airport lounges including a new-look lounge at Adelaide.
A review of the airline's business and economy fare structure will "reduce airfares even further by the middle of this year," Hrdlicka has said.
The six-month delay to relaunching trans-Tasman flights will see Virgin opt out of what's expected to be a 100,000 passenger per week rush on travel in the wake of a year-long lockdown on both sides of the pond.
This will include the ski season from late June, which typically sees an exodus of Aussie powder-hounds headed for the likes of Queenstown and Canterbury.
Instead, Virgin will cede the skies to Qantas, Jetstar and one-time ally Air New Zealand.
With Qantas as a premium full-service airline, Jetstar as the low-cost carrier and Air New Zealand playing across the field with its tiered 'Seats to Suit' pricing strategy, the three-airline spread arguably encompasses the entire market and could leave little room for Virgin's own middle-ground push.
Qantas, having scheduled more than 120 NZ flights a week between itself and Jetstar within hours of the travel bubble announcement, today added a further 20 return flights a week from May to October to capitalise on Virgin's absence.
Qantas is also rolling out its international-grade Airbus A330s crowned by its flagship Business Suites for all Sydney-Auckland and Melbourne-Auckland flights and will a new daily Gold Coast to Auckland service from April 19, with thrice-weekly Cairns-Auckland flights to follow “in time for the June long weekend” through to late July.
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