Japan is back on the international travel stage, and airlines are ramping up their flights between Australia and Tokyo to take advantage of the country’s October 11 reopening without testing, quarantine or visas.
Qantas, its Oneworld partner Japan Airlines and Star Alliance rival ANA are eager to rebuild their Tokyo schedule: over 620,000 Australians visited Japan in 2019, a solid rise of 12.6% on 2018 figures.
But what about Virgin Australia, whose planned Brisbane-Tokyo flights in early 2020 were scuppered first by the global pandemic and then by the airline’s collapse the following month?
That flight was one of four approved between Australia and Tokyo's Haneda Airport – the other three were assigned to Qantas, JAL and ANA – in the lead-up to Tokyo 2020 Olympic Games, with the proviso that daily flights began by March 31, 2020.
All of those flights were of course cancelled mere weeks before their launch, in the face of the Covid-19 pandemic.
The International Air Services Commission (IASC) – which oversees Australia's international airline activity, including routes and airport takeoff and landing slots – has several times pushed back the ‘must-fly’ start date, citing the “extraordinary circumstances” of the impact of Covid-19 and “travel restrictions put in place by the Australian Government since March 2020.”
Use it or lose it...
However, the IASC has now set 26 March 2023 as the ‘use it or lose it’ deadline for Virgin’s flights to Tokyo Haneda.
“On 29 June 2022, Virgin Australia wrote to the Commission seeking a further extension of the date for utilisation of the capacity from 30 October 2022 until 30 June 2023,” notes the IASC’s official determination.
“In its letter, Virgin Australia provided the Commission, on a confidential basis, with its firm commercial plans to commence operating these services at the beginning of the Northern Summer 2023 season” which starts on 26 March 2023.
This is now the latest date for “the capacity… to be utilised”, the IASC states.
Approached for comment by Executive Traveller, a Virgin Australia spokesperson said “Virgin Australia has retained its capacity allocation in Tokyo Haneda with the intention of commencing Australia-Japan services in the future.”
“We welcome the lifting of travel restrictions in Japan and are working closely on our plans as demand for leisure travel to and from Japan returns.”
But to begin flying between Brisbane and Tokyo, Virgin will need to lease or buy aircraft with longer range than its Boeing 737s.
Bain Capital ditched Virgin’s long-range Boeing 777 and Airbus A330 jets under a sweeping ‘rescue, rightsize and reboot’ plan which saw the airline focus almost exclusively – and, arguably, so far very successfully – on the domestic market.
The IASC declined to offer comment if a ‘wet lease’ arrangement with partner ANA, which would see Virgin Australia lease both ANA jets and cabin crew, would satisfy its requirements.
Long-range flights a long way away?
Earlier his month, Virgin Australia CEO Jayne Hrdlicka said the carrier was reluctant to resume long-range flights even as demand for international travel soars, as the airline prepares for an initial public offering as soon as next year.
“Anything that we did from a long-haul standpoint would have a very high hurdle on it,” Hrdlicka said in an interview at a CAPA Centre for Aviation conference in Adelaide.
“There is a lot of demand right now for long-haul flying and not enough capacity, but you have to plan for the long term. You don’t invest significant amounts of capital in aircraft to solve for a moment in time.”
Hrdlicka anticipates that Virgin Australia will return to profit in the year ending June 2023, laying the ground for a share sale – possibly next year – and at least a partial exit by the airline’s owner, US buyout firm Bain Capital.
After collapsing under a mountain of debt at the start of the pandemic, Virgin Australia is now focused on keeping hold of one-third of the domestic passenger market and short-haul flights to destinations such as New Zealand.
“We’re very focused on running the business and making sure that we’re in great form for eventual listing,” Hrdlicka added.
Virgin’s former long-range fleet plan
In September 2021 a Virgin Australia spokesman told Executive Traveller “we remain in discussions with aircraft manufacturers on a fleet strategy to support the reintroduction of widebody services when long-haul international travel demand returns.”
Former Virgin Australia CEO Paul Scurrah, who helped steer the airline out of administration in 2020 before Hrdlicka took the stick, had previously launched a “widebody fleet review” with the aim of replacing the A330 and B777 with a single aircraft type – either the Airbus A350 or the Boeing 787 – citing “significant cost savings available from next-generation aircraft.”
“We did a lot of work pre-administration on replacing both those aircraft types with a more efficient, newer version of a wide-body,” Scurrah elaborated at a media briefing in August 2020.
“We are having discussions with aircraft manufacturers but there's also going to be leasing opportunities for us, and it might be that we go straight to the end solution or we might have a temporary lease solution,” he allowed at the time.