Every airline is dealing with reduced demand in a different way, and Virgin Australia has just revealed how they plan on adjusting capacity.
Virgin Australia suspends international flying
Virgin Australia has announced that they plan to suspend all international flights, and also ground their wide body fleet. Virgin Australia will:
- Suspend all international flights from March 30 through June 14, 2020
- Reduce domestic capacity by 50% through June 14, 2020
Virgin Australia’s international routes include three flights to Los Angeles, from Brisbane, Melbourne, and Sydney. On top of that, the airline is suspending flights to New Zealand.
Virgin Australia was supposed to launch two new international routes on March 29 — from Brisbane to Tokyo Haneda, and from Melbourne to Bali — but both of those services are being postponed.
Virgin Australia isn’t alone in cutting flights between Los Angeles and Sydney, as American, Delta, and United, are all suspending these routes as well. All of this comes as Australia has warned against all international travel.
Virgin Australia grounding 53 aircraft
With this huge reduction in Virgin Australia’s flying schedule, the airline is also grounding planes. The airline has a fleet of about 94 aircraft, and says they plan to ground the equivalent of 53 aircraft, including the following:
- Grounding all five Boeing 777-300ERs
- Grounding all six Airbus A330-200s
- Grounding 34 Boeing 737s
- Grounding six Airbus A320s (as part of the Tigerair Australia fleet)
- Grounding two ATRs
We can expect these planes to be grounded for at least 2.5 months, though I’d say it’s highly possible the cancelations last longer than that.
Keep in mind that just recently Virgin Australia was talking about buying new long haul aircraft, though I imagine that’s being tabled for now.
How Virgin Australia’s workforce is impacted
With significantly reduced demand and capacity, the airline also doesn’t need as many people as they have.
While it seems that this is still in progress, Virgin Australia is undertaking a range of measures to address the current situation, including the use of accrued annual leave, leave without pay, redeployment, and in some circumstances, redundancies.
In addition to that, the Chairman and Board of Director is cutting fees by 15%, management bonuses are being removed, and there is no base salary increase for non-EA team members.
Hopefully Virgin Australia will make it through this
Virgin Australia was in a rough financial situation even before this crisis started, as they’ve struggled with profitability, and with figuring out their place in the market.
One has to wonder what impact this will have on the future of the airline.
However, I guess the reality is that even the most seemingly financially healthy airlines are in a tough spot here. Take Delta, for example, which is asking for government bailouts just weeks after this all started.
The reality is that Virgin Australia’s future probably lies in the hands of the government… as is the case for way too many airlines.
Bottom line
Arguably Virgin Australia has needed to come up with a new strategy for quite a while now, so I’ll be curious to see if this situation prompts some changes at Virgin Australia, or if we just see them resuming operations as normal in a few months.
I feel bad for all the employees at airlines that are negatively impacted by this, and for their sake hope that this gets worked out…
Do you think Virgin Australia will go back to business as usual after this, or do you think it will cause them to modify their strategy?
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