Virgin Australia Lays Out Plan for Future

Virgin Australia is scaling back its international ambitions and simplifying its fleet, CEO Paul Scurrah said Aug. 5. The carrier will fly to 28 cities in Australia and add destinations as demand returns. It left the door open to resume international flights, but for now will serve only the Australian market.

International operations will be hard to do, now that Virgin Australia is going down to a single fleet type: Boeing 737-800s. The carrier will remove ATRs, Boeing 777s, Airbus A330, and Airbus A320s from its fleet. Virgin Australia is shuttering its Tigerair Australia brand but will retain the air operators certificate if future market conditions favor a separate ultra-low-cost carrier.

“Long-haul international operations are an important part of the Virgin Australia business,” Scurrah said. “However, given current international travel restrictions, the airline will continue to suspend flights to Los Angeles and Tokyo with the intention to recommence and grow long-haul flights when sufficient demand returns.”

The carrier expects domestic and shorthaul international demand to take two to three years to recover, with longhaul international travel possibly taking longer to return.

The company will reduce its staff by 3,000 employees as a result of the restructuring. It will have 6,000 employees when the process is complete, but hopes to grow to 8,000 as the economy recovers.

Virgin Australia entered administration earlier this year, and Bain Capital won a strongly contested auction to take control of the carrier.

In other Virgin Group-airline news, Virgin Atlantic, which began the process of restructuring last month, filed for bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code. Chapter 15, a relatively new section of U.S. bankruptcy law, allows foreign companies undergoing restructuring in their own countries to protect their assets in the U.S. and gives them access to the U.S. court system.