Following the announcement of Virgin Australia’s bumper but not unexpected AUD$316 million loss this week, boss Paul Scurrah came out swinging, announcing job losses and a review of operations, including routes.
It’s that last bit, routes, that’s got the armchair experts chatting. Pretty much everyone who has ever hoped on a VA flight has an opinion on what the airline is doing right or doing wrong and how it’s obvious, even to blind Freddy, what they problems are.
Of course if it was that easy, Virgin wouldn’t have posted seven years of consecutive losses.
Virgin Australia’s international operations are loosing money. The most high profile under-performer are the Hong Kong flights. You could point to the current problems in Hong Kong and yes, they don’t help, but these flights had lousy loads long before the protests took off.
The Hong Kong flights would seem the likeliest international route to face the axe.
The A330’s used on the route could be redeployed to provide a competitive product on a busy business route like Sydney-Auckland. Or put back on the transcontinental run.
All those Boeing 737 flights to Bali, Polynesia and Melanesia. They’re all low yielding leisure routes. Farm them out to Tiger.
As for loss making Tiger. That’s a discussion for another day.
On the other hand, Virgin’s domestic operations are making money. But there’s some chat about what domestic routes might be facing the axe. It’s all speculation but the pundits reckon the triangle flights are safe. It’s the flights to lesser, secondary ports that are under threat.
Virgin offers some interesting routes that Qantas ignores; Brisbane – Alice Springs, Perth – Hobart, Gold Coast – Perth. Next week OzTraveller is doing Sydney – Launceston. Okay, Jetstar has a presence on these routes but Jetstar doesn’t have business class and Jetstar can be …. so Jetstar sometimes.
It would be a real shame if routes like these were lost. They offer direct connections and take traffic away from busy airports like Sydney and Melbourne.
But pundits reckon its place like Launceston, Newcastle, and Coffs Harbour that have the most to loose.
Virgin’s regional flights to towns like Wagga, Albury, Mildura, and into Central Queensland may also feel the heat. Of course, if Virgin does cut services to marginal ports like these, it just drives more potential passengers to the competitor airlines.
It’s a vicious circle for Mr Scurrah.
But right now its all punditry. Until Virgin Australia does make some announcements it’s just grist for the rumour mill. But it does make for an interesting exercise.
And of course, everyone’s an expert …