Virgin set to axe Melb – HK flights

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In the wake of Virgin Australia’s announcement that it’ll fly daily Brisbane – Tokyo from late March 2020, the airline has swung the axe into its daily flights between Melbourne and Hong Kong. The move comes as part of the airline’s recent review into route profitability after a dismal $315 million loss in earning this year.

The move to reduce flights to Hong Kong will will free up the Airbus A330 aircraft needed for Virgin’s daily flights between Brisbane and Tokyo.

Other changes to come out of the six month review to improve the airline financial performance includes the push back of Boeing 737 MAX jets delivery from November 2019 to July 2021 and delaying a launch of an enhanced B737 business class seat.

It’s a shame to see Virgin reduce their presence in Hong Kong. Understandably the political unrest has made it even tougher for the airline, especially in a market dominated by Cathay and Qantas. Back when the airline launched into Hong Kong in 2017, it was anticipated that the airline would use it as a launch pad into mainland China. That never quite eventuated as Virgin had hoped.

Virgin is hopeful that the new Brisbane to Tokyo route will be a better option, with a new partnership with leading Japanese airline ANA giving them the leverage they require to launch into the Asia market from Japan to China.

 

Qantas and Virgin set to split Haneda landing rights

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In a bit of an unexpected turn since Virgin’s announcement that it’d review its entire network for profitability, the airline is almost certain to be gifted one of the two additional landing rights for Haneda Airport in Tokyo.

Virgin and Qantas both applied for two rare landings slots at Haneda, which had become available to Australian airlines. Virgin asked for one whilst Qantas wished to secure both slots.This week the International Air Services Commission (IASC) issued a draft decision awarding both airlines one slot each, believing Virgin entering the Tokyo market would bring greater competition and airfare competition.

The Virgin slot, if successful, would see them use an A330 daily service out of Brisbane in late March 2020. The news for Virgin comes after the airline recently signed on a partnership with All Nippon Airways. The partnership would see see the two airlines code-share on fall lights between Australia and  Japan as well as domestic internal flights.

Rival Qantas hoped to secure both slots, using one to shift its Melbourne flight from Narita to Haneda and use the additional slot to offer Sydneysiders a twice daily service to Tokyo. If the split of landing rights goes ahead, Qantas will have to decide which way it will use that one slot.

Further submissions are being made to IASC with the body to make a final decision in the near future.

Virgin set make Velocity fully Virgin owned again

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Loyalty programs are a cash cow for airlines to the point that some airlines sell a stake or the whole cow for a quick profit hit. Those who have taken the gamble tend to not seen it pay off and more often than not find themselves paying for it, or in the case of Air Canada creating a whole new competing loyalty program.

In 2014 Virgin sold part of its Velocity business to Affinity Equity Partners (AEP). Since the sale the program it has grown to be the third biggest loyalty program in Australia behind Qantas and Woolworths. Virgin now has sellers remorse and has enter an agreement to buy back the 35 per cent of its Velocity program it sold to AEP for $700 million. This is more than double what they sold it for to the group five years earlier.

Virgin has experienced some rocky annual results of late but the shining star of their company has been the Velocity division which saw earnings (before interest and tax) up 12 per cent to $122.2 million.

Personally I think this is a smart move by Virgin which in the end after a initial financial hit see the company not only in a stronger position financially but increase value with its customers for years to come!

Qantas eyes off Haneda flight expansion

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It’s been reported that Qantas is considering adding new flights to Tokyo’s Haneda Airport after released two new airport slot pairs to Australian airlines.

The recent expansion of Haneda Airport has created four new daytime slots for flights to and from Australia. Two of these slot pairs have already been allocated to ANA and Japan Airlines, with two remaining and available for Australian airline use.

Bids for the landing and takeoff slots at Haneda Airport slot will close 31 October 2019 and become available for use from 29 March 2020. It’s expected Qantas will take up the slots as Jetstar’s Tokyo hub is based out of Narita and Virgin is currently in a state of reassessing its entire network.

Qantas currently flies the Boeing 747 daily from Sydney to Haneda Airport. If the airline were to take up these slots it would empower their business and leisure travellers with greater options in terms of landing and departures

Additional Haneda Airport slots would be a win for any Australian airline as its closer proximity and transport options to Tokyo makes it the preferred choice for business travellers.

Time will tell if Qantas takes flight with the new Tokyo Haneda options. Considering Haneda slots are as rare as hens teeth Qantas would be foolish to pass this unique opportunity up.

Virgin set to experience turbulence following recent net loss

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Virgin Australia has announced this week a program to cut 750 head office and corporate roles after posting a $349 million full-year loss. The result is a surprising drop for Virgin following their slender thing profit of $64 million the previous year. The plan to slash jobs is estimated to save the airline $75 million annually in costs. The cuts would impact seven per cent of Virgins current workforce.

On top of labour costs Virgin has advised it would be making an urgent assessment of all its current routes and capacities to see where further savings can be made. It’s expected there will be a strong focus around leisure routes. The move would ensure better route profitability for the airline.  Virgin has also decided it would hit pause on fleet renewal until July 2021.

The recent loss has not made new VA CEO Paul Scurrah’s life any easier since he landed into the tough job following the departure of John Borghetti. The new CEO pointed to tough trading conditions as well as rising fuel and the lower Australian dollar.

The news follows rival Qantas posting earlier this month a 6.5 per cent fall in annual net profit. Like Virgin they attributed the loss to higher oil prices and a weaker foreign exchange.

 

 

ETIHAD TAKE OFF A380 FLIGHT FROM SYDNEY SKIES

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Etihad Airways really is starting to become a shadow of its former, glamorous self. The airline when it took to the skies was full of promise and was in fact ground breaking at one point. Lately Etihad announcements are something I dread as they have been the last two years about news of removing or cancelling product and/or aircraft. Today’s disappointing announcement from Etihad is the removal of one of their popular A380 services to Sydney, which will be replaced by a Boeing 777-300ER on an ongoing basis from July 2019.

Previously Etihad announced that flight EY451 and the EY450 return leg would revert from the current short-term Boeing 777 and back to to its flagship Airbus A380 in May.. Ssdly Etihad has had a rethink of this and decided to keep the change permanently.

The downgrade in aircraft means those set to fly the A380 will need to review their booking, especially those in business as the B777 possesses the last generation business class seat as well as lacks the pizzazz of a onboard bar area. Those in first will also be affected with the 777s first suites no match for the spaciousness of the A380s. Moreover those seeking a shower best wait til they land because the inflight shower is not on the B777 aircraft.

Coincidentally the announcement and date of it removal aligns with Etihad’s launch of the A380 between Abu Dhabi and Seoul.

Personally if you are flying a premium class I would make the switch. B777s are a horrid aircraft; noisy, lacking space and generally disappointing.

Will you be switching aircraft if your booking has landed on the new B777 aircraft? Kene to hear your thoughts.

VIRGIN OFFERS FIRST DOUBLE STATUS PROMOTION FOR 2019

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Fancy a double status promotion?! I certainly do and it looks like the first of the big Australian airlines has taken fire in the first round of DSC promos for 2019. Today Virgin cheekily released a teaser on their social page with the statement “In two days, we’re going to help you soar twice as fast. Watch this space (and your inbox!)”.

Whilst the offer is not yet active, what is known about the upcoming double status promotion is that if you register and book between 1 February to 12 February 2019, you will receive double Velocity status credits when you travel on any Virgin Australia marketed and operated flight before 28 December 2019

These promotions are a great way for those who are always falling shy of the next tier to get over the line. It’s anticipated that Qantas will soon be releasing the first of their double status credit promotions in February/ March but it looks like Virgin has beaten them to the punch. Well played Virgin, well played!

Comments

Will you be taking advantage of the Velocity DSC promotion? Keen to hear your thoughts.