News Virgin Australia’s pricey gamble on post-COVID travel

Virgin Australia’s pricey gamble on post-COVID travel

Virgin appears to be rolling the dice on Australia's reopening plan. Photo: AAP
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While the ghosts of binned holiday plans and lost accommodation deposits still haunt many of us, one major Australian airline is taking a leap of faith.

Virgin Australia is embarking on an optimistic expansion of its fleet, with hopes flying high that the ramped up vaccine rollout will bring back interstate travel.

Nine shiny new Boeing aircraft will join the line-up from October. The airline predicts all will be assigned to routes by February next year.

Virgin Australia boss Jayne Hrdlicka said the decision reflected the airline’s commitment to its customers, staff and the wider industry.

“Airlines around the world have had to bend and stretch over the past 18 months as our fleets, teams and wider operations have responded to unprecedented border restrictions and demand volatility,” Ms Hrdlicka said on Friday.

“But we at Virgin Australia are crystal clear that the underlying consumer desire for travel is strong.”

It comes as millions of Australians endure strict lockdowns, with travel bans still in place and surging daily virus numbers.

But Ms Hrdlicka said it was all about preparing for a predicted surge in holiday-makers once stay-at-home rules lift and Aussies are again free to explore.

“These extra aircraft are an important part of our planning and ensure we’re ready to ramp up flying and meet the pent-up demand for domestic travel as soon as the opportunity presents itself,” she said.

The nine Boeing 737-800 aircraft that will join Virgin’s line-up will be leased. To buy, they cost up to $146 million each, according to the manufacturer, although it is common for commercial airlines to lease fleets.

Either way, it’s a big leap of faith for Virgin Australia, which cut a third of its workforce in August last year.

Whether or not the decision will pay off hinges largely on the Morrison government’s reopening plan and how it intersects with state governments’ willingness to welcome interstate travellers.

As reported by The New Daily, world leading modelling from the Doherty Institute has set guidelines for getting the nation back on track.

The official target for Australia is to start ‘leaving our caves‘ – that is, reopen interstate borders and end lockdowns – once the adult population is 70 per cent vaccinated.

But this hasn’t been entirely endorsed by all state and territory leaders, who remain concerned about the spread of the Delta variant – particularly as NSW struggles to get it under control.

And while Virgin takes a gamble, it’s still a dicey time for airlines.

Qantas predicts bubble has popped

Rival Qantas said on Friday it believed New Zealand had grounded the trans-Tasman bubble for months, in more shaky signs for international travel.

NZ abandoned the free movement arrangement with Australia last month, citing the increased threat from the Delta variant of COVID-19.

Prime Minister Jacinda Ardern initially put the bubble on hold for eight weeks, with a review due in early September. On Friday – with NSW’s virus outbreak worsening, Victoria in lockdown, and New Zealand battling its own Delta outbreak – she put that review back to the end of the month.

“Too soon to say,” was all Ms Ardern would say about a resumption of flights before Christmas.

In an email to frequent flyers, Qantas has written off the bubble until at least then, when vaccination rates in both countries are forecast to be vastly higher.

“Based on the current vaccination projection rates and the Australian government’s plan for reopening borders, we are preparing for Qantas and Jetstar international flights to resume … from mid-December 2021 between Australia and New Zealand,” the bulletin states.

The airline gives the same timeline for resuming flights to Fiji, Singapore, the US, Japan, Britain and Canada.

If true, it would effectively spell an end for the special trans-Tasman arrangement and mean visits to our Kiwi neighbours are treated the same as to other destinations.

Qantas also predicts the resumption of flights to Hong Kong in February 2022.

Other destinations – including Bali, Jakarta, Manila, Bangkok, Phuket, Ho Chi Minh City and Johannesburg – are tipped to remain grounded until at least April 2022.

NZ’s Delta outbreak – which has infected 347 Kiwis and counting – has been sourced back to a Kiwi who returned from Sydney on a “red zone” flight on August 7.

-with AAP