Virgin Australia Will Exclusively Fly 737s, Retire 777s & A330s

Filed Under: Virgin Australia

Virgin Australia has today announced details of a radical restructuring. This comes after the airline entered voluntary administration back in April, and as Virgin Australia prepares to be taken over by Bain Capital, which has a new direction for the airline.

Virgin Australia will retire 777s & A330s

While the backbone of Virgin Australia’s fleet has long been the 737, the airline has also operated A330s and 777s, which the airline used for long haul flights.

Effective immediately, Virgin Australia will exclusively operate Boeing 737 aircraft, as the airline focuses on its core domestic and short haul operations.

This means that Virgin Australia will get rid of its five Boeing 777-300ERs and six Airbus A330-200s. These planes were really young — the 777s were an average of just 10 years old, while the A330s were an average of just seven years old.

With these planes being retired, it also means that Virgin Australia will discontinue long haul flights, including to Los Angeles and Tokyo.

Virgin Australia’s 777 business class

The airline is hoping to realize cost efficiencies and remove operational complexity. It’s noted that while long haul international operations are an important part of the Virgin Australia business, current travel restrictions make these flights very difficult.

The airline hopes to recommence and grow long haul flights when sufficient demand returns. While that sounds nice, obviously that won’t exactly be an easy process when the airline gets rid of all planes capable of flying these routes. If Virgin Australia does ever recommence long haul operations, it will likely be many years down the road, as the airline will need to acquire new planes.

It’s sad to think that as recently as a few months ago, Virgin Australia was looking at ordering new long haul aircraft. Oh, how times have changed.

Virgin Australia will exclusively fly 737s

Tigerair Australia will be discontinued

Not only will Virgin Australia discontinue long haul flying, but it will also discontinue its ultra low cost subsidiary, Tigerair Australia. The airline operated a fleet of just over a dozen narrow body aircraft, but will now be discontinued due to insufficient demand to support two airlines in the group.

Tigerair Australia’s Air Operator Certificate (AOC) will be retained in case the airline is brought back in the future.

Tigerair Australia is being discontinued

Virgin Australia will cut 3,000 jobs

Given the extent to which Virgin Australia is scaling back its operations, the airline expects that roughly 3,000 employees will be made redundant across functions. Formal consultation with unions and employee groups has commenced, so we’ll likely find out more details about what exactly this looks in the coming weeks.

It’s stated that this move will secure approximately 6,000 jobs once market demand recovers, with the potential to increase to 8,000 jobs in the future.

What will Virgin Australia look like going forward?

With Virgin Australia being a much simpler, all-Boeing 737 airline, what should we expect onboard? While details are limited, here’s what has been revealed so far:

  • Virgin Australia is aiming to be “the best value carrier in the market, not a low-cost carrier”
  • The airline will continue to offer a two class configuration, so business class isn’t going away
  • The airline will offer an extensive network of domestic and short haul international destinations, including frequent capital city connections and services to leisure and regional markets
  • The airline will maintain lounges in key markets, though expect some lounges to close
  • The airline will consolidate its corporate offices in Brisbane, closing its Sydney office

Virgin Australia will maintain business class

This is more bad news for Delta

Delta has a transpacific joint venture with Virgin Australia, meaning the airlines partnered closely on flights between the US and Australia. Virgin Australia discontinuing long haul operations is pretty bad news for Delta, on the surface.

While Delta can maintain its partnership with Virgin Australia for the purposes of providing connectivity within Australia, chances are the partnership won’t be as robust as before.

Virgin Australia at one point flew from Los Angeles to Brisbane, Melbourne, and Sydney, so I’ll be interested to see if Delta eventually adds more flights to Australia to make up for this loss. In particular, with Virgin Australia focusing on Brisbane, I wonder if we’ll see Delta eventually start service there.

While Delta’s global strategy made the airline dominant among the “big three” US carriers for so long, in some ways that strategy seems to be backfiring right now.

This is bad news for the Delta & Virgin Australia joint venture

Bottom line

Virgin Australia has a completely new direction as it prepares to be taken over by Bain Capital. The airline will retire 777s and A330s, the Tigerair Australia subsidiary will be discontinued, and 3,000 employees will be made redundant.

All of these developments are sad. I’ve found Virgin Australia’s employees to be phenomenal, and loved my flight a few years back in Virgin Australia’s 777 business class.

Hopefully this is a path that will make the airline sustainable long-term, given that Virgin Australia wasn’t doing particular well even before the pandemic.

What do you make of Virgin Australia’s new strategy?

Comments
  1. Sad.

    Virgin Australia provided great service and gave Qantas some healthy competition on its long-haul routes.

  2. I wonder if we will see SpiceJet picking up the A330’s. With a few at business class already onboard it could be a cheap way to grow there European and US operations!

  3. They’re also keeping their A320 and Fokker 100 fleets (albeit it’s under the Virgin Australia Regional Airlines entity)

  4. It’s sad to see the changes happening to VA, but understandable given their situation prior to and during COVID. I always thought their staff were great, though I did always feel like their product overall was always a couple steps behind Qantas (with the exception of EconomyX).

    I’m not sure how I see this as “bad news” for Delta, though? Most VA customer avoided the DL trans-pacific flights (if, for no other reason, than they were lumped into the “American-based airlines” category). This now ‘forces’ VA travellers to take DL operated flights to the US if they want to enjoy FF benefits – as opposed to just the domestic US-connections.

    As for the BNE-LAX flights, I always thought those were just a matter of VA-home-turf pride. If DL does expand (when we get out of this COVID mess), I’d like to think MEL is much more commercially viable – especially as we’re almost as large as SYD, and growing at a faster rate – likely to be the largest city in AUS by 2026. That also gives a very convenient transit point for travellers form ADL, HBA, and CBR (doubtful VA will fly CBR-SYD is my guess). Even PER may want to transit MEL as the VA 330’s will no longer fly.

    Interesting times again, and good luck to the new VA team and direction!

  5. Their CEO said he expects that the return of international travel in volume remains some years away, although he says Virgin intends to restart flights to Los Angeles and Tokyo “when sufficient demand returns and by then, Virgin will have an all-new international fleet, with Boeing 787 Dreamliners previously earmarked for both Asia and the USA”.

  6. “the best value carrier in the market, not a low-cost carrier” — marketing BS at its best, girl! Good luck, though.

  7. @Ray

    A330 fleet was leased. They will just be returned to their owners.

    The 777s were largely ‘owned’ on the other hand, will be interesting how they’ll dispose of them whilst the market for wide-bodies is pretty much non-existent.

    May be cheaper to sell VA’s 777s to the scrappers and sell off the spare parts retrieved from the scrappers if “storing” VA’s 777s out in the desert until a buyer is available is expensive.

  8. Wow! I flew on Virgin Australia MEL-LAX back in February and I recall talking to the flight attendants at the onboard bar how excited they were to start flying to Tokyo Haneda in March 2020. :/ Loved the VA experience.
    As for its future in the next several months, it looks like it’s going back to its Virgin Blue roots. Really hoping VA will rise again someday.

  9. @Alan why do you feel that way? Being in healthcare, I don’t fully understand the business world and corporate structure. Are Delta’s business practices unethical or illegal? Or do you just not like them because of how they market themselves (which I can admit is kind of annoying, they aren’t that special).

    Even though I live in Miami, I only fly Delta and occasionally Southwest or Spirit if the route/timing is better. I go out of my way to avoid American Airlines after some unpleasant experiences.

    If I don’t like a company, I just don’t give them my business. I wouldn’t root for them to get “kicked in the gut” because so many people depend on them for a job. I’m curious what about Delta warrants that reaction from you? Not attacking you, just generally wanting to learn.

  10. I wonder if Virgin will be giving up their Haneda slot as a result of this?

    @TroyTheYank
    NO chance that Delta would ever fly to Melbourne. They’ve been very conservative with the destinations they chose to fly to before the pandemic so they’ll be way more hesitant in choosing new destination in the short to medium term. Virgin will probably make their US bound customers connect in Sydney for Deltas flights to LA.

  11. delta strategy not “backfiring” that is like saying that i am better of then an airline because that means i am not losing money now 🙂 Delta will be there like everyone else when the market returns and stronger then them all..

  12. Sad to see, but not too surprising. I really liked Virgin’s Economy X on their 777, mainly from the fact that you get noise-canceling headphones with VA. Once Delta gets a few more A350s/A330neos and international travel resumes in a few years, I wouldn’t be surprised if Delta picked up some of the other routes from LAX.

    I’d say it would be easier for Delta to resume the LAX-Melbourne/Brisbane routes than VA. Given the typical schedules between LA and Australia, most Qantas and VA planes usually sit around LAX all day waiting for the return flight to Australia in the evening, while the US Big 3 get to utilize their long-haul aircraft for domestic routes (e.g. LAX-ATL/JFK). It’s only a 2-3 hour turnaround in Sydney anyway so there’s little chance to utilize these aircraft outside of the US-Australia routes.

  13. I flew LAX-BNE and back SYD-LAX on March 1st after Mardi Gras festivities in Economy X, and it was truly a wonderful experience. Hard to believe everything would change two weeks later. I truly feel for all of the wonderful crew who lost their jobs.

  14. I flew on Virgin Australia BNE-LAX a few years ago. Great business seat and service. If/when they decide to resume long haul flights, the 787 or A350 would be good aircraft options.

  15. Everyone says it’s a great experience; why, then, did it go bust? I’ve never flown Virgin internationally , having no status with them…and they failed…miserably…to attract QANTAS top tier flyers, preferring instead to offer status to public servants. Mega flop, presided over by inept and clueless management.

  16. @Bill~ don’t you mean SOUTH-EAST Australia? That I where the bulk of Virgins flights have been and will continue to be.

  17. Actually it’s not Flo.

    LCC means no lounges, no business class, no luggage included and no snacks.

    Good value means what it says, similar inclusions to mainline but at a better price.

    They’ll be the latter, not the former.

  18. I suspect that Delta will operate the a350 to SYD when service is restored. Much better ride than the 787’s operated by AA or UA, until QF 380’s come back.

  19. Having flown these wide bodies both trans continental and cross Pacific to LAX, I will miss them greatly. “ the business “ was a delightful product. Virgin now just needs to fall in line behind Qantas as the domestic market demand returns. It’s also a pity to see Tiger go as they were a good competitor to jetstar on some of the more tourist and city routes.

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