Virgin Australia has recently declared that it will be rethinking domestic and international routes, after a $71.2 million loss in the 2018-19 financial year.
The current response is a cost-cutting program to counter this loss, including the reduction of 750 staff within its corporate and head office – saving the company up to $75 million per year. Overall, this cut will affect 7 per cent of Virgin’s total workforce. The loss in profits has been attributed to lower trading, combined with $159 million in fuel and foreign exchange costs.
Due to these disruptions, Virgin is also reviewing its fleet, capacity levels and network across Australia and Internationally.
“We intend to further reduce flying across elements of our short-haul international and our domestic network to match our strategic positioning and the market conditions as well as to maximise route profitability,” says Paul Scurrah, Virgin Australia’s chief executive.
© Virgin Australia. Some of the Luxury routes, such as Sydney to Wellington, NZ, will be rethought to keep Virgin Australia competitive.
“This may involve potential withdrawals from certain markets which are uneconomical for us, however we will be reviewing all routes in detail.”
Virgin Australia has already reduced the number of seats available, and expects a further reduction in early 2020. Furthermore, a fleet renewal has been paused due to the deferral of Boeing 737MAX orders, after the plane was involved in two fatal accidents across several airlines. The airline currently has a limited international network, with flights from Australia to Los Angeles, Hong Kong, Bali, the South Pacific and recently New Zealand.
Currently, the airline has a fairly limited international network with flights from Sydney, Melbourne and Brisbane to Los Angeles and Hong Kong as well as from several cities in Australia to Bali, the South Pacific and New Zealand.