Finance Virgin Australia suspends domestic flights during coronavirus crisis
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Virgin Australia suspends domestic flights during coronavirus crisis

Virgin Australia reduced its domestic capacity by 90 per cent in March. Photo: AAP
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Virgin Australia is suspending all of its domestic flights except for a single Sydney to Melbourne return service, which will run once per day, except for Saturdays.

It is understood the suspension will start on Friday.

The airline, which is seeking $1.4 billion in government assistance, says demand has dropped due to coronavirus travel restrictions.

A spokesperson for Virgin Australia said the airline would continue to monitor passenger numbers and adjust capacity requirements as necessary.

“As a result of government restrictions, less people are travelling and we have made changes to our schedules to reflect this,” they said.

“We continue to operate a daily service between Melbourne and Sydney, provide cargo transport locally and overseas, and operate charter flights including assisting the government in bringing Australians home.”

A notice on the company’s website says: “If you a hold a ticket for travel up to June 30, 2020, you can change your booking or request a travel credit without a change or cancellation fee. Fare and tax differences may apply.

“Guests who have booked flights on a suspended service will be contacted via email, prioritised by departure date, with alternative travel options.”

Virgin Australia would not confirm any additional job losses, after announcing 8000 workers would be stood down.

Last month, Virgin Australia grounded its entire international fleet in response to COVID-19.

The company had also already announced it would temporarily reduce chairman and director fees by 15 per cent, and remove bonuses.

Some aviation experts warned the company may fail to survive the crisis despite federal government stimulus measures.

“This says to me that the major shareholders, which are foreign companies and own 90 per cent of Virgin, are clearly not prepared to put any more into it,” said airline consultant Neil Hansford from Strategic Aviation Solutions.

“This is the only way it’s got of preserving cash.”

Singapore Airlines, Etihad, Chinese groups Nanshan and HNA and Sir Richard Branson’s Virgin Group all have stakes in Virgin Australia.

“They can’t between them get enough shareholder contributions, which tells me they don’t see a future for Virgin,” Mr Hansford said.

Qantas was able to raise $1.05 billion in additional funding by taking out a 10-year loan secured against its aircraft, but Mr Hansford said Virgin did not have that option.

He argued the government was unlikely to agree to a $1.4 billion bailout, considering 8000 of Virgin’s 10,000 workers have been stood down, leaving a vastly reduced workforce.

In a statement released on Thursday, Transport Minister Michael McCormack said the federal government was taking every possible action to maintain a strong and competitive aviation sector after the coronavirus pandemic.

“As Australia’s aviation industry faces an unprecedented and sustained period of falling demand, we continue to work with all stakeholders, including the major airlines, to ensure we meet and beat the current challenges – together,” the statement said.

“That’s why we have already invested more than $1 billion to support our Australian aviation industry.”

The support includes a $715 million package waiving fuel excise and government charges backdated to February 1.

The government also set aside $198 million to ensure the continued operation of essential flights into regional communities and $100 million to provide direct financial support to smaller regional airlines.

The fortnightly JobKeeper wage subsidy is also available to a range of eligible businesses across all sectors of the aviation industry.

ABC