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Virgin Australia Group Exits Administration, Charts New Course for Success

The carrier has exited voluntary administration and the company’s new CEO, Jayne Hrdlicka, has outlined the future direction of the airline. Virgin Australia will target the Australian mid-market and retain three domestic seating options.

Virgin Australia Boeing 737-800 - Courtesy Virgin Australia

Today (November 18, 2020), the Virgin Australia Group announced their exit from voluntary administration and unveiled plans for the airline’s future direction and success. The airline's new CEO, Jayne Hrdlicka, has indicated that Virgin Australia will target the mid-market and remain the only Australian carrier offering three domestic seating options. Virgin Australia Regional Airlines (VARA) will be retained and restructured after a thorough business review. The company also announced the reopening of their lounges, starting with Brisbane today. As part of the carrier’s new strategy, they will make significant investments in technology to upgrade the guest experience. Virgin Australia’s 10 million member strong Velocity Frequent Flyer program will remain intact with substantial airline and non-airline earn and redemption opportunities. In Wednesday’s announcement, Virgin Australia’s CEO, Jayne Hrdlicka, said,

“Virgin Australia is an airline built on a 20-year history of exceptional customer service and delivering a great experience for millions of Australians. Today, we exit voluntary administration with a renewed sense of who we are and who we are here to serve. It’s a privilege to join Virgin Australia as CEO at such an important moment, and I’ve spent the past few weeks meeting and listening to our team and hearing their ideas. I’m impressed with their understanding of and passion for our guests and look forward to their continued input as we work to refine our plans and define our future together. The travel environment is changing and so are our customers’ preferences. We know that leisure travellers, small and medium businesses, and many corporates are now emerging from COVID-19 wanting better value. They are hungry for flexibility and choice, a trusted brand that resonates with their values, and great prices, along with the premium features they value most.

“Today, we’ve announced a plan that will ultimately give our customers what they value without the big price tag: premium lounges, a new and fresh retail offering onboard, a choice of cabins, better digital technology and a more streamlined check-in experience. We will also continue to deliver our award-winning service, strong network of destinations, an award-winning frequent flyer program and a safe and reliable operation. Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either. Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service. We will continue to evolve our offering for our customers based on data and feedback, but the Virgin Australia experience millions of travellers know and love is here to stay.

“We emerge today stronger, more competitive, and ready to face the challenges ahead. We removed an enormous amount of complexity from our business, greatly improved our cost base, and have an extraordinary team on the ground and in the air to deliver our new plan. We are more resilient than ever and have the backing of Bain Capital who are deeply invested in seeing us succeed over the long term. As we have seen with the recent issues with South Australia, the travel market remains uncertain. We are however seeing some positive signs of recovery. Borders are beginning to open, and a potential vaccine is on the way. We expect continued volatility, but as demand recovers, we’ll achieve a market share consistent with our pre-COVID position and continue to invest in, and grow, the fleet in line with increases in demand. Shaping our future will be a collaborative effort across the Virgin Australia Group and I’m thrilled to see the genuine excitement from our people about the future of their airline.”

Virgin Australia is the first major Australian airline in history to have exited voluntary administration. As part of the company’s future direction they will remain committed to domestic flying with the goal of retaining approximately one third of the market. The carrier’s Brisbane lounge reopened today, and the remaining lounges in Melbourne, Sydney, Adelaide, Perth and Gold Coast will reopen as demand returns. Virgin Australia’s all-new ‘Lounge of the Future’ concept will open in Adelaide in early 2021 and the refresh will eventually be rolled out across the network. Due to low demand, the company will permanently close lounges in Darwin, Cairns and MacKay, while Canberra remains under review. Lounge memberships which expired during the pandemic have been extended for 12 months beyond the original expiration date.

The airline will retain their popular Business Class product which will be relaunched in 2021 after a comprehensive review. The company’s unique ‘Economy X’ seating launched in 2017 with extra legroom and a dedicated overhead compartment will remain as an upgrade for Economy Class guests. Virgin Australia will replace the existing snack offering with a fresh buy onboard menu in 2021, while tea, coffee and water will remain complimentary. Infight Wi-Fi and entertainment service is currently under review and the company will release details next year.

The company will launch new state-of-the art self-service and check-in facilities across major domestic airports by December 2021. The mix of kiosks and assisted check-in counters will allow Virgin Australia’s Guest Services agents to come out from behind the counter and provide a concierge-style level of service. Technology will continue to play a key role in the airline’s transformation and the Virgin Australia app will be enhanced throughout 2021. The carrier is committed to offering customers flexibility in booking and will offer unlimited booking changes and waived change fees for flights booked through January 31, 2021.

Source: Virgin Australia

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