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Virgin Australia Reveals Plan Focusing on Core Strengths as an Iconic Australian Airline

Virgin Australia announced on Wednesday plans to exit voluntary administration focusing on its core strengths and re-establishing itself as an iconic Australian airline. The carrier will focus on domestic and short-haul international business destinations.

Virgin Australia Boeing 737-800 - Courtesy Virgin Australia

On Wednesday (August 5, 2020), Virgin Australia unveiled their post voluntary administration plan focusing on core strengths and re-establishing itself as an iconic Australian airline, providing exceptional guest experiences. The airline will build on their core competencies in providing great value on domestic and short-haul business travel. The carrier will also extend travel credits post administration for bookings made before the carrier entered voluntary administration. As part of the plan, Virgin Australia will reduce their cost base, cut 3,000 jobs and simplify their aircraft mix with an all-Boeing 737 mainline fleet and retaining their regional and charter fleet.

The company will remove ATRs, Boeing 777s, Airbus A330s and Tigerair Airbus A320s from their fleet. The Tigerair brand will be discontinued, but Virgin Australian will retain the Air Operator Certificate (AOC) for potential future ultra-low-cost carrier (ULCC) operations. Long-haul international flying will remain an important part of the carrier’s business plan but will be suspended until demand recovers. In Wednesday’s announcement, in cooperation with Bain Capital, Virgin Australia Group’s CEO and Managing Director, Paul Scurrah, said in part,

“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australians airports recording passenger numbers less than three percent of last year and ongoing changes to government travel restrictions. Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure Virgin Australia Group is successful in this new world…

“…While these changes are important to manage the impact of COVID-19, they involve some very tough decisions. We expect approximately 3,000 roles will be impacted as a result of these changes announced today. However, our intention is to secure approximately 6,000 jobs when the market recovers with aspirations for up to 8,000 in the future. To those that leave the business, I want to thank then for the role they’ve played in making this great airline. They will be closely supported through our alumni program, have all their entitlements honoured and be provided with a two-year extension of employee travel benefits and early access to retiree and long service benefits…”

In addition to overhauling their cost base and optimizing their fleet, Virgin Australia’s six point plan includes focusing on customer value, harnessing the company’s unique culture (including their 10 million member Velocity Frequent Flyer program), investing in digital technologies, strengthening their balance sheet and preserving jobs for future growth.

Source: Virgin Australia


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