Virgin Australia looks to build on its successes in 2016

By David Flynn, January 15 2016
Virgin Australia looks to build on its successes in 2016

 As Virgin Australia approaches the fifth birthday of its dramatic transformation from the no-frills Virgin Blue to a full-service airline capable of fighting Qantas on its own turf, the challenger will partly see 2016 as a year for consolidation.

The lounge network has been rebuilt, capped off by an all-new Perth lounge sporting the same flagship design as its east coast cousins.

All of Virgin’s Airbus A330s now boast The Business, a premium business class cabin which turns the transcontinental trek into a world-class flying experience.

Review: Virgin Australia's 'The Business' A330 business class

Bolstered by sensible traveller-friendly perks and smart alliances with the likes of BP, the airline’s Velocity Frequent Flyer program is steadily climbing towards the six million member milestone.

Capitalising on this well-rounded offering should help Virgin Australia edge back into the black from last year’s $49 million pre-tax loss, which was itself a substantial improvement from a $211.7 million loss the year before.

With all the pieces in place, 2016 should be a watershed year for Virgin Australia – and one in which it will face a resurgent Qantas equipped with deeper pockets than ever before.

But 2016 won’t be all about standing still, of course.

Eying a larger slice of the lucrative trans-Pacific market, Virgin Australia’s Boeing long-range 777-300ER jets will be upgraded to The Business “in the first half of 2016”, the airline says.

The wide, comfortable seats with their ample personal space, 18 inch video screens and direct aisle access will easily outclass the Skybed II business class on Qantas’ Airbus A380s and Boeing 747s, giving Virgin Australia a critical advantage in the tussle for LA-bound business travellers.

Read: 10 things you didn’t know about Virgin Australia's 'The Business'

The refit will also see new premium economy seats with more legroom and upgraded meals to reposition the cabin as a 'business lite' zone.

Meanwhile, the Virgin Australia network is being ‘right-sized’ with the help of budget arm Tigerair Australia, with the low-cost offshoot taking over flights from Melbourne, Adelaide and Perth to Bali from March 23, while from February 1 Virgin Australia will axe its Perth-Phuket route.

However, Virgin will ramp up its trans-Tasman presence on the Sydney-Christchurch and Melbourne-Christchurch routes.

On the domestic front, Virgin Australia will roll out its self-service check-in system and bag drop – which in November debuted at the airline’s new Perth terminal – to other airports across Australia on CEO John Borghetti describes as "a very aggressive" schedule.

Virgin’s Velocity Frequent Flyer scheme entered the new year as the best way to earn points at the pump but there’s more to come, with newly-minted Velocity CEO Karl Schuster teasing that “something very big” for the Velocity-BP partnership is on the way.

“Watch this space – something very big is going to happen with BP next year, that’s all I can say,’’ Schuster said in his first interview earlier this year.

New Velocity sign-ups have reportedly skyrocketed by as many as 50,000 members a week as a result of the alliance.

Virgin’s target for Velocity is seven million members by 2017, while the Qantas loyalty program currently exceeds 10.7 million members – and Virgin has Qantas frequent flyers in their sights.

“Our Game Change Program essentially created an indifference” CEO John Borghetti has previously remarked, beginning with establishing Velocity as an solid alternative to Qantas Frequent Flyer.

“It helped to dislodge those travellers loyal to the incumbent airline group, so that they were happy to travel with either of us, whilst building a Virgin Australia loyalty base.”?

“Going forward, we no longer want to create an indifference for this group – we want to convert more of them to our loyalty base.”

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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

09 May 2013

Total posts 140

Virgin could benefit flying BNE-HVB with their turbo props and even MCY-CNS.

This would improve velocity memberships in regional towns. 

Next would be a Coles relationship?

Qantas - Qantas Frequent Flyer

23 Oct 2013

Total posts 703

A couple of international lounges?

Qantas - Qantas Frequent Flyer

31 Aug 2015

Total posts 123

I know their ownership structure restricts it, but they really need more international flights. I'd pick Virgin over some of the other offerings.

Qantas - Qantas Frequent Flyer

12 Jul 2014

Total posts 113

Lifetime Status Recognitionn...........?

They have also introduced a life on their points, took a Virgin flight about 5 years ago now, 3k sitting in my account and now finally they have emailed me saying they will expire :(

But, being a QF loyalist, Life Recognition would be a good step, as I live in the UK, I fly BA and other OW operators wherever I can so that I can built my life QFF Status, if Velocity had that, I would be using VIR, VA, SIN, ANZ, LH, AGN & TUR to do all my regional Europe and long haul flying.

Virgin Australia - Velocity Rewards Plantium

19 Jun 2013

Total posts 119

Agree - Virgin really don't look after their top level flyers very well via Velocity.  I was on a Etihad flight from Melb to Abu Dhabi 2 days ago (am in London at the moment) and when I went to board I got a free upgrade to Business Class.  Never flown with Etihad before however they like to look after both their top level and also airline partners top level flyers.  How many free upgrades have I received from Virgin... none!  

Qantas - Qantas Frequent Flyer

12 Jul 2014

Total posts 113

Not to dis-similar to Qantas to be fair. Have only had my wife upgraded ot join me in Dom Bus, and that was points based, not an op-up. (seperate bookings, similar ITR, BNE-MEL-LHR)

But, I have an upcoming flight with EK back to Aus, and have heard they are quite happy to bump (QFF with status) up. Will be a good test of my Gold Status, but I won't be overly disappointed if it doesn't happen, EK Econ on the big birds is at least survivable.

Singapore Airlines - KrisFlyer

17 Nov 2014

Total posts 102

One thing  I hope Virgin Australia to do is to expand themselves into a handful of internaional routes such as HKG, HND etc to lure international travellers into Australia via Virgin Australia.

Moreover, Velocity program really needs more partners airline-wise. Currently Singapore Airlines is the only partner in Asia is simply not good enough if they want to stay competitive as an Asia-Pacific airline.

Virgin Australia - Velocity Rewards

07 Dec 2015

Total posts 55

IMHO they need to consolidate and get the service offering with their existing international partners sorted out for their top tier FF if they want to be considered a real alternative to the red roo. It's very inconsistent, poorly configured and very difficult to weave your way through on a regular basis. I'd rather they did less but executed it really well. Sadly, they do neither and I'm an a VA supporter...

Qantas - Qantas Frequent Flyer

28 Apr 2012

Total posts 14

some of the Key performance indicators that should be looked at by end of calendar year 2016 are share price, amount of profit and whether they have made enough money to pay a dividend to shareholders

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 321

I think its poor domestic presence, particularly in regional areas will tell on Virgins performance in 2016. Borghetti has indicated his lack of traffic from secondary ports is not an issue but I believe it will work heavily against Virgin in what will be a year of solid growth in aviation generally. I think many of its customers will become frustrated at the stagnation of its network and drift away. A business can only rely on growth of disgruntled customers from the major player for so long, Virgin has reached that point.

Virgin Australia - Velocity Rewards

06 Dec 2012

Total posts 170

Talking of new premium economy cabin has any one seen or heard any further information on the development of this? The link in this article goes to the story back in June about the new seats and service with a couple of artists renditions of the concept. those images show a pretty basic seat with what appears to be no foot rest and a fold away armrest (no where to even put a drink (except tray table obviously) surely these can't be the seats of a lauded "business lite" product?

18 Nov 2015

Total posts 118

Virgin wins hands down with their The Business international seats. The Qantas Sky Bed 2 is so dated now.  And Qantas need to hurry up with the domestic A330 reconfig. I flew a sad looking business class recliner seat Sydney to Perth last Saturday. 

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