Virgin Australia has just announced that it terminate its daily A330 Sydney – Hong Kong services from 02 March 2020. This is in addition to the previously announced axing of its Melbourne – Hong Kong flights which will end on 10 February 2020. This effectively means Virgin Australia will permanently withdraw from the Hong Kong market. The airline’s motive for withdrawing from this market has been a continuous decline in demand as a consequence of the civil unrest and most recently of the corona virus. The financial struggles of alliance partner Hong Kong Airlines, of which parent company HNA Group has a twenty percent stake in Virgin Australia obviously hasn’t helped in making the Hong Kong flights viable for the airline.
Implications for the Virgin Atlantic-Virgin Australia joint venture
The axing of the Hong Kong flights also has implications for the VA/VS joint venture which was only approved by the Australian Competition and Consumer Commission in late 2019. Virgin Atlantic which suspended its daily London – Hong Kong – Sydney back in May 2014, entered into an extensive commercial co-operation with its Australian sister airline including code-sharing to offer a seamless services on flights to Australia. The joint venture however includes code-sharing and fare co-operation on Virgin Australia’s flights to Los Angeles-LAX.
There is no mention at this time where the A330 aircraft that was dedicated to Hong Kong flights will be re-deployed. It has the option of using this aircraft on trans-Continental flights from Sydney/Melbourne/Brisbane to Perth and increasing its use on Fiji flights where this aircraft operates seasonally during peak periods.
Virgin Australia’s long haul network will now be comprised of Los Angeles where it operates daily Boeing 777-300ER services from Brisbane, Melbourne and Sydney. Tokyo-Haneda flights are scheduled to commence daily from Brisbane from 29 March 2020 using Airbus A330-200 aircraft.