Virgin Australia will shed staff, cull Tigerair and transition to a single Boeing 737 fleet – but travel credits, Frequent Flyer points and domestic lounges remain safe.
Virgin Australia has unveiled future plans under new owners Bain Capital. The airline, which went into voluntary administration on April 21 with debts of $6.8 billion, was bought out by the US private equity firm last month.
What changes can we expect to see?
Sweeping changes have been announced by Virgin Australia this morning. The key take outs are as follows:
Around 3,000 jobs to go: Virgin Australia says it is confident it will be able to keep two-thirds of its 9000 staff employed. However, sadly, around 3,000 airline staff can expect to lose their jobs.
Tigerair to be culled: The low-cost Tigerair brand will be discontinued in the market as there is not sufficient customer demand to support two carriers at this time. Tigerair Australia’s Air Operator Certificate (AOC) will be retained to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.
Long-haul international routes scrapped: All long haul international flights will be scrapped until the global travel market recovers.
Transition to single Boeing 737 fleet: Virgin Australia will move to an all-Boeing 737 mainline fleet for domestic and short haul operations. This will see the removal of ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft. The airline's regional and charter fleet will remain for now.
Travel credits and Frequent Flyer points to be retained: All travel credits and Velocity Frequent Flyer points will be carried forward under the new ownership. Virgin Australia will provide customers with the value of their travel credits post administration. To preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023. Further information about the use of credits will be provided to customers in due course.
Domestic lounge network to stay: The airline will maintain a network of lounges in key domestic locations with a plan to re-open when demand returns.
Virgin Australia Group CEO and Managing Director Paul Scurrah said together with Bain Capital, the plan will help to re-establish Virgin Australia as an iconic Australian airline.
“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than three per cent of last year and ongoing changes to government travel restrictions,” said Mr Scurrah.
“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 the Virgin Australia Group is successful in this new world,”.
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