Virgin Australia Plans Long Haul Fleet Renewal

Filed Under: Virgin Australia

It looks like Virgin Australia will be deciding on their long haul fleet renewal plans in the not-too-distant future, so what could that look like?

Virgin Australia’s current long haul fleet

Currently Virgin Australia’s wide body fleet consists of:

  • Five Boeing 777-300ERs, which are an average of about 10 years old
  • Six Airbus A330-200s, which are an average of about seven years old

Virgin Australia 777-300ER

As far as aircraft utilization goes, Virgin Australia uses their:

  • 777s to operate Los Angeles flights, from Brisbane, Melbourne, and Sydney
  • A330s to operate select Asia flights, as well as select transcontinental flights to Perth

Virgin Australia 777 business class

Virgin Australia plans new wide body order

Reuters reports that Virgin Australia is planning to place an order for either Airbus or Boeing wide body jets to replace their current long haul fleet.

The leases on some existing planes start to end in 2024, and Virgin Australia says that they would want delivery of these planes “a lot earlier” than that.

Virgin Australia’s CEO has said that they’re currently exploring options, and if the deal is worth doing they would be willing to place an order this year.

One interesting decision is that Virgin Australia plans to order just a single aircraft type, to give better economies of scale and fuel efficiency.

I can’t help but wonder if the airline is also considering renewing leases on existing planes rather than replacing them. Even in 2024 these planes will be an average of about 12 years old, which is still quite young.

Obviously newer planes have better fuel efficiency, though I’d imagine the lease payments are much lower on used 777s and A330s than brand new planes.

787-9 or A350-900 seems like a sure bet

Assuming Virgin Australia will purchase new planes, it sure seems like the only real planes they’d consider would be the Airbus A350-900 or Boeing 787-9:

  • Since they’re going for a single plane, it seems to me like the Boeing 777X or A350-1000 would just be too much capacity for them
  • The 787-10 and A330-900neo likely wouldn’t consistently have the range to operate nonstop flights from Los Angeles to Australia

Of course it’s also possible that they order different variants of the same plane, like the A350-900 and A350-1000. However, that won’t necessarily help them much in terms of aircraft utilization. In other words, it would be convenient if a single plane could fly from Los Angeles to Sydney to Perth to Sydney to Los Angeles in order to minimize aircraft downtime.

Virgin Australia has long lagged behind Qantas when it comes to profitability, and they’ve struggled to make long haul markets beyond Los Angeles consistently viable.

Therefore I’d expect that they’ll place a modest aircraft order, and I’d be surprised if they even maintain a long haul fleet of 11 planes.

Bottom line

Virgin Australia is a lovely airline, and I immensely enjoyed my flight in their 777 business class. It’s a shame they haven’t been able to make more long haul flights work.

The airline is expected to soon order a single type of wide body aircraft, so personally I think they’ll likely choose the A350-900 or 787-9.

What plane do you think Virgin Australia will choose for their fleet renewal?

Comments
  1. The A330-800neo has extremely high performance but would probably not work for them capacity wise. The A330-900neo does have the range to do Australia – Los Angeles comfortably as well as the 787-10… I see two possibilities: they order the A350-900 and keep their A330-200s with the A350s acting as a direct replacement for the 777s, or they order a significant amount of 787-9s (10-15) and replace their entire widebody fleet. I have an inkling the second scenario could be more likely…

  2. Either option is viable but lean towards 787. Reason – Boeing is more likely to give discounts to keep the 787 at current production rate. Another reason – 777 crew can transition to 787 super simply with the common type ratings.

  3. If they’re looking in the future, they should get a plane that can handle flights to JFK or LHR nonstop from their hubs at BNE, MEL, and SYD. So my vote would be a350-1000.

  4. It has always baffled me that while VS is busy ordering 787s and A350s, VA has never moved beyond 777s and A330s. Two other airlines that have stuck to 777s and A330s, and completely ignored the A350 and 787, are LX and GA. GA has the A330neo now, which shows that it is highly unlikely to ever operate the 787 or A350. As for LX, the LH group has a 787 order that will be split amongst, LH, LX and OS in a yet-unknown ratio.

  5. @Joey

    You do know that QF A350-1000 is only in paper right, not even a firm order yet.

    The economics might not even work at all. Having 2 airlines compete might make it a no win. VA and QF will be left with a huge extra long range plane.

    My bet will be 787-9.

  6. Will be interesting what happens if the economy heads downhill for a while. Obviously the virus is having an impact on tourism and a number of other parts of the economy. I’m guessing many of these orders will not happy, at least not in the speculated time frame. And going forward its likely these viruses will occur more often. Interesting times.

  7. I think it makes way more sense for them to have a single fleet type given their limited long haul network. It’s also worth noting that Virgin Australia’s Long haul network will shrink further and its ability to serve Asia in particular outside of Japan is highly suspect.

    Virgin Australia’s China services depended heavily on feed traffic from Hainan whose days look numbered. With cut throat completion and excess capacity in the market, Virgin Australia has simply no scope to compete in the market and will abstain.

    In Hong Kong Virgin Australia will no longer be able to offer any onward connectivity to mainland China. Hong Kong’s O&D traffic is likely to be very subdued owing to its uncertain political and economic future and Cathay and Qantas have ample capacity to service the market. Virgin Australia’s Kangaroo route partnership with Virgin Atlantic offers little value to customers, itself and Virgin Atlantic as well. I don’t expect to see Virgin Australia operating to Hong Kong with its own metal for the foreseeable future.

    Other Asian markets such as Singapore, Malaysia, Thailand, Indonesia and Vietnam already have strong flag carriers with widespread Australian services or too much Low cost capacity. At best Virgin Australia can serve a few leisure destinations with narrowbody aircraft.

    Even with the influx of capacity from ANA into Australia, Virgin Australia’s slots at Haneda can allow it a window of opportunity to operate 1-2 daily services between Australia and Tokyo however I don’t see it going beyond this.

    Which brings us to VA’s key long haul market- the United States. VA’s JV with power house Delta should see its services to LA remain intact. It could also offer a service to Seattle- a tech hub with growing O&D traffic and Delta’s transpacific fortress meaning more then ample connecting opportunities. Seattle also offers a superior transit experience as compared to LAX. What’s clear however is that VA does not need the capacity of a 77w and the 787-9 and A 350-900 offer it just the right amount of capacity for such missions.

    I would bet on the 787-9 as it offers better economics on medium haul flights then the 350 and therefore can be flexibly VA deployed by VA to Japan, America and even cross country services during peak demand periods. I would expect an initial order of 8-10 jets with some options in case they decide to operate to Seattle.

  8. The only widebody international destinations that VA will operate after March 2nd is LAX and HND (with the odd NAN thrown in).

    Capacity-wise, a 787-8 is the most sensible. Size wise it’s probably easiest for VA to fill and to be versatile enough to put onto domestic transcon routes.

    VA pay too much for the leasing costs of the A330s so would benefit from getting rid of them. They own most of their 77Ws but wouldn’t get much for them financially.

  9. VA should get rid of the ATR 72 for the Syd Canberra leg. Space for carry on luggage is a nightmare and so is the negotiating of those tight small stairs to board and exit the plane.

  10. While todays epic fail as armchair ceo should go to Aman; it actually belongs with Joey, for even suggesting that VA should think about ultra long haul flights to London and JFK.

    No, just no. VA is consistently losing money and I don’t think the world has ever seen an airline go from unprofitable to profitable by launching new ultra long range flights. This doesn’t even factor in the complexities they have with their ownership structure currently.

  11. VA doesn’t have enough widebodies to expand their long haul network at the moment. Not to mention a hodge podge of differing fleets who’s lease dates don’t even coincide.
    There’s no economy of scale with long haul as pointed out with A330 and 777s.

    You need some sort of long haul network to increase the appeal of Velocity Frequent Flyer, as Va have completed re-purchasing it. Velocity makes money regardless of whether an airline flies or not. But you need a network to make it appealing to burn points.

    With a larger wide body fleet, and with one that can do Trans Con as easily as a long haul, I would expect VA to also deploy the wide body on Nadi and Bali flights. Means I can burn points on a long haul J class product for a shorter flight. Appealing.

    I would expect the incoming 737 MAX 10 to take over trans con from the A330. The MAX 10 does not have MCAS fitted. Hopefully though has a lie flat seat fitted but don’t like the chances. Deploy it in transcon and short haul international. Make that one fleet as well.

    This frees up the wide body fleet to expand its network, but you still need one that can do a 4-5 hour hop just as easily, or even a domestic golden triangle route if demand allows, but slot constraints don’t allow for multiple narrow bodies to furfill demand.

    Aman has a point, service another US destination and link with Delta, give people the option to avoid LAX. A eastern or central US destination would be a good compliment to th network.

    As for Asia, Singapore being a VA shareholder seems deadset against letting VA into SIN. The alliance with ANA is a great move and maybe they VA can replicate what they did with Delta to the US.

    I would not be surprised if Delta show more interest in VA if they can get Hainan’s shareholding in VA for a bargain price. If that did happen, Delta, which now is working closer with LATAM could guide LATAM to work more closely with VA. LATAM are leaving OneWorld and it presents a opportunity for Delta, VA and LATAM to work closer together.
    You get reciprocate earn and burn for Velocity across ANA, Delta, LATAM, SQas well as VS, surely you make it a more attractive proposition… as long as they can sort the consistency issues out regarding status and lounges.

    You get VS to do the Kangaroo route via another port. I to believe VS are planning Haneda at some point..

  12. Perhaps it’s time that VAi concentrates on only LAX (and USA) as a niche long-haul operator in conjunction with DL, considering that CEO Scurrah has singled out LAX as one of the few (if not only) destinations in Virgin Australia International network (in conjunction with Delta Air Lines) actually earning money for the small VAi operations.

    IMO, VA’s widebody replacement should be reduced as well, down from the current 11 (the 77Ws and A330s) to 8 widebodies of a single type (A350 or 787).

    6 of those widebodies will be allocated to the East Coast – LAX operations, 1 for the BNE-HND and a spare for SYD/MEL-PER operations during peak times.
    If BNE-HND doesn’t work out in 12-18 months time, that frame could also be sent to SYD/MEL-PER as well.

  13. It would be cool to see A350s on LAX-SYD since its dominated by 777s and 787s. I have a feeling though that VA would get a much better deal on a 787 order. Considering all of their other JVs and various stakes in different airlines, it wouldn’t surprise me if DL becomes more involved with VA. Once work is complete on SEAs new int’l arrivals facility, it would be cool to see DL/VA launch a SEA-SYD service. With plenty of domestic feed on both ends, I think this could work, especially with something smaller than VAs current 773s. Plus, it could take some traffic from across the boarder at YVR. Canadians seem to get screwed at times with the lack of competition on YVR-Australia routes.

    I also wouldn’t be surprised to see some involvement with AF/KL/VS. Flying Blue and Flying Club members don’t have a lot of great options for flying to/from Australia without codeshares to lower tier partners. Linking up with them could make some Asian destinations served from AMS/CDG/LHR more viable for VA.

  14. I wonder if VA would ever consider restarting the MEL-JNB route once these new planes arrive. I think that with the correct metal this time around it could be more successful. Or maybe I’m being purely selfish as a South African born Australian. I do hope as well that VA doesn’t change their product offering too much – their long haul business and even economy is miles ahead of anything else in this part of the world, spoken as a VA frequent flier.

  15. Amen for the SYD>SEA route post SEA int’l arrivals completion. That would be a huge win for Seattle and seem to make sense, giving VA pax the option of a civilized transit in Seattle vs. mess in LA. Nice route not currently served by QF or US carriers, growth market etc.

  16. @Bob – regarding the transcon market in Australia, forgoing widebody service on this route will potentially hurt VA’s marketshare on that route.

  17. Interesting. Might they take up HNA’s disused 787s/A350s and refurbish them, I wonder? I feel like the 787 would give them more flexibility in the way of aircraft utilisation, but parent company Etihad *could* send some fresh A350s their way rather than have them stored for long periods.

  18. @Ray

    Considering the news articles that HNA is on the brink of “liquidation” by the Chinese Government, it’s more than likely that HNA group’s 787s/A350s are to be owned by the goverment, or the leased widebodies having the leasee arrangements transferred to the government.

    EY is still sorting out their financial debt problems as of the moment and I’m not even sure if transferring their parked widebodies to VA would help either company.

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