Virgin Australia Will Not Resume Long-Haul Flights Fast

Maintaining a robust domestic network and an ASX listing are two goals to which Virgin Australia CEO Jayne Hrdlicka is committed.

CEO Jayne Hrdlicka has stated that despite rising demand for international travel, Virgin Australia is hesitant to resume long-haul services in order to reduce expenses in advance of an IPO expected to take place early next year.

From a long-range perspective, “anything that we did would have a very high hurdle on it,” Hrdlicka said in an interview at a CAPA Centre for Aviation conference in Adelaide. The airline hinted that it would explore returning to long-haul service.

Long-distance flights are in high demand, but insufficient infrastructure supports them. You don’t spend millions on planes to fix a temporary problem, Ms Hrdlicka remarked.

According to Hrdlicka, the airline will turn a profit by the end of the fiscal year in June 2023, paving the way for US buyout firm Bain Capital to at least partially exit its ownership stake in the company through a share sale, potentially as early as next year.

Virgin Australia, which had collapsed under a mound of debt at the beginning of the pandemic, is now focusing on maintaining a one-third share of the local passenger market and short-haul flights to destinations such as New Zealand.

To prepare for a future listing, “we’re focused on operating the business,” Hrdlicka said.

Under Bain Capital’s broad “rescue, right size, and reboot” plan, Virgin got rid of its long-range Boeing 777 and Airbus A330 planes and has since focused almost solely (perhaps, quite effectively) on the domestic market.

Flights from Sydney and Melbourne to Los Angeles and San Francisco, as well as flights from Brisbane to San Francisco and Sydney to Houston, are now available thanks to the cooperation with United Airlines.

United’s “three gateways” (Los Angeles, San Francisco, and Houston) offer convenient one-stop service to many other cities around the US and the world via a vast network of connecting flights.

According to Patrick Quayle, senior vice president of international network and partnerships for Virgin Atlantic, “that allows Virgin customers far more travel through one stop to nearly everywhere in North or South America because of United’s massive network.”

With the cancellation of its 28 March 2020 launch owing to the pandemic, Virgin also lacks aircraft suited for restarting operations between Brisbane and Tokyo.

When Japan reopens to visitors in a big way, scheduled to happen in November, the airline will likely rely on ANA as a partner.

While “long-haul international operations are an essential component of the Virgin Australia business,” the airline has said it would not resume them until the global travel market has recovered, a process still in its early stages.