Virgin flags fleet changes

VIRGIN Australia (VAH) will transition its low-cost Tigerair division to operate only Boeing 737-800NG aircraft by Oct this year, as part of a fleet simplification project seeing the removal of seven Airbus A320s.

Tigerair will cease flying from Sydney to Adelaide, Cairns and Coffs Harbour, as well as suspending Melbourne-Coffs Harbour and Hobart-Gold Coast as the carrier rationalises nonprofitable routes.

This morning’s VAH half-year results release (TD breaking news) also confirmed a review of the VA widebody fleet, citing “significant cost savings available from next generation aircraft”.

The carrier notched record revenue and passenger numbers for the six months to 31 Dec, but the overall result swung to an $88.6m loss, impacted by fuel costs, airport charges & staffing.

Restructuring, asset writedowns and depreciation hit the bottom line by almost $110 million, with CEO Paul Scurrah saying the business was progressing well on “the review of our suppliers and agreements, right-sizing our workforce and making changes to our fleet and network.

“There’s further work to do on costs and we will continue to review the network and our capacity in line with demand.”

He highlighted VA’s operational performance, with the carrier continuing to deliver an excellent customer experience and leading on-time performance.

Coronavirus is now impacting VA’s domestic and international demand, and is estimated to hit Group earnings by up to $75m in the six months to 30 Jun 2020.

Key upcoming developments include next month’s highly anticipated VA launch of non-stop flights from Brisbane to Tokyo.