Virgin Australia's restart fleet, routes taking shape
Virgin CEO Paul Scurrah says the airline will "fly profitably, price rationally, and reflect the confidence Bain has put in us."
By David Flynn, September 3 2020
Virgin Australia 2.0 is set to take wing under the ownership of Bain Capital with a very different approach to the airline which collapsed into administration almost 20 weeks ago.
"We intend to be our own version of an airline – we intend to follow the lead from our customers in terms of what they want," says CEO Paul Scurrah, promising to "fly profitably, price rationally, and reflect the confidence Bain has put in us."
Free from the mountain of debt accumulated over the years that Virgin sought to challenge Qantas head-on, the rebooted airline will drop many domestic routes where the numbers simply don't add up, even if that means ceding more of the overall market to Qantas.
“I do expect we will lose market share because there are routes that weren’t making any money,” Scurrah noted at the CAPA Australia Pacific Aviation Summit. "There will be markets where we do want to hold our own. We are looking at it market by market rather than nationally."
Some routes could be handed over to partners such as Alliance Airlines, which already operates a number of regional Queensland flights on behalf of Virgin Australia.
Review: Alliance Airlines (Virgin Australia) Fokker 70 economy class, Brisbane-Bundaberg
Virgin's own 'restart' network will be flown by a smaller number of Boeing 737s than the 80-strong fleet it had before administration, roughly half of which was owned and half leased.
Scurrah said he expects to have between 30 and 60 Boeing 737s in the air by the middle of 2021, depending on demand.
“We’re not putting numbers on the starting fleet,” he said. “We need to be flexible. With the arrangement with lessors we can do that.”
That flexibility will also be needed to ramp up short-range international services, primarily to New Zealand.
"If New Zealand opened up soon, we’d jump at it, because we’ve got aircraft we want to deploy. New Zealand is a part of our future plan, so as soon as we can be back there, the better."
Read more: Virgin Australia plots its return to New Zealand, USA
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.
QF
11 Jul 2014
Total posts 1024
Alliance Airlines has Qantas as a shareholder, I can see Alliance doing more work for Virgin but how does this all sit with the ACCC. The threat would be Qantas taking control of Alliance or using it's shareholding to influence decision.
24 Aug 2011
Total posts 1225
Qantas is not able to exercise any management control at Alliance. It is also unable to have a seat on the Board.
11 Jul 2020
Total posts 75
I have already booked to fly with Virgin Australia for the Queen's birthday long weekend next year. I'm sure we will have a covid 19 vaccine by then. Virgin Australia are my favourite airline to fly domestically.
Qantas - Qantas Frequent Flyer
08 May 2017
Total posts 14
Not great news for the routes Virgin Australia will drop. Prices will need to rise on these routes to make then profitable for those still running them (Rex/Alliance/QF) and we all know if it’s a monopoly then whichever airline running it will put an extra ‘profit’ on top to make up for when thy lost money when there was excess capacity and other airlines flying.
Flying will likely be a lot more expensive in the future as all airlines reprice themselves so they are actually making money on the routes they fly. VA is actually in a good position with less debt and dropping lose making routes. QF is now cutting the costs they can but they will still be burdened by debt loads. If VA stays disciplined domestically they should be way more profitable then QF.
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