Wednesday, November 8, 2017

Virgin Australia eyes more Asian services in 2018

Virgin Australia intends to start operating at least one new Asian route next year, as the carrier continues to seek access to slot-constrained airports. The airline already operates one Asian service, to Hong Kong, and has often said it wants to add more routes there and to mainland China. CEO John Borghetti said the airline is “working hard” to gain additional slots in Hong Kong and elsewhere in Asia, although he would not name specific routes.

Virgin has earmarked some of its Airbus A330s for new Asian services, and these aircraft will be ideal for such routes, Borghetti said during a media teleconference. “We’ve got the aircraft, we’re just missing the slots, and we’re working on that,” he said. Borghetti said he is “hopeful that by this time next year we will be flying more” Asian routes.

The carrier launched its 5X-weekly flights between Melbourne and Hong Kong in July. This week the route will be expanded to daily service. Borghetti said Virgin has been surprised by the amount of mainland China traffic connecting to its flights via its partner Hong Kong Airlines. The Sydney-Hong Kong route is “proving to be very good indeed,” he said.

As part of a presentation at the airline’s annual general meeting, Borghetti said Virgin is scheduled to receive five new Boeing 737s in the current fiscal year, which runs through June 30. Three of these have been already delivered, with another due later this month and one in January, an airline spokeswoman said.

Virgin began fitting onboard Wi-Fi to the first of its Boeing 777-300ERs last month, and the product will be introduced on “selected flights” between Sydney and Los Angeles by year-end. The carrier already has fitted Wi-Fi to two 737s on domestic routes. Wi-Fi eventually will be rolled out across Virgin’s 777, A330 and 737 fleets.

The airline also issued a trading update for the three months through Sept. 30, which is its fiscal first quarter. Virgin said its “positive trajectory” from its previous fiscal year has continued, with its first-quarter underlying pre-tax profit improving by A$18 million ($13.8 million) year-over-year. The airline only presents full earnings reports for the half and full-year periods.

Virgin did say first-quarter revenue rose 5.7% year-on-year. Domestic unit revenue increased 8.8%, with domestic load factor up 3.8 points to 81.4% on a 3.3% capacity reduction.

The carrier’s chairwoman, Elizabeth Bryan, said the board is considering whether Virgin Australia should become privately held or remain publicly listed. She noted there has been “speculation over the past year” about its status as a publicly listed company, considering most of its shares are held by a handful of overseas airlines with a relatively small free float. “The board has held discussions about privatization; however, there is no outcome to report to the market at this stage,” Bryan added.

(Adrian Schofield - Aviation Daily / ATWOnline News)

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