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Virgin Atlantic drops Sydney/Hong Kong to quit Australia

February 6, 2014 Aviation, Headline News 1 Comment Email Email

egtmedia59Cathay Pacific, Qantas and to some extent British Airways look set to benefit from a shock decision by Virgin Atlantic to axe its flights between Sydney and Hong Kong.

The move to drop the Hong Kong/Sydney route from May is a watershed. Sydney is Australia’s biggest hub and Hong Kong is one of the world’s biggest. The departure of Virgin Atlantic will leave British Airways as the last major European carrier to fly to Australia using its own metal – and Qantas’s switch to the Emirates alliance last year will  put pressure on that.

Australia was once served by a host of European airlines using their own planes, including KLM of the Netherlands, UTA and AOM of France, Air France, Lufthansa, Lauda, Alitalia, Olympic Airways and JAT from Yugoslavia. No more.More-fun-in-the-Philippines_250X250px

The news from Virgin Atlantic’s head office fell like a bolt from the blue on general manager Luke Fisher and the 47 ground crew and office staff that Virgin employs in Sydney. They have performed very well, achieving major revenue growth in the nine years Virgin Atlantic has served Australia. Fisher has been at the helm for eight years.

Just a few months ago, Fisher said Virgin Atlantic was considering introducing a second daily service on the Hong Kong/Sydney route. The airline was even mulling launching a Melbourne/Hong Kong service.

In the end, competitive pressure grew too great. Virgin Atlantic chief executive Craig Kreeger, a 54-year-old American, has been on a mission to tighten the operation and claw back losses since taking over a year ago. A couple of months after he took over, Kreeger whacked a pay freeze across the whole business as part of a broad cost-cutting plan.

Virgin Atlantic’s departure will mean Virgin Australia loyalty program members will no longer be able to fly to Hong Kong on Virgin Atlantic from Sydney.

Fisher and staff learned the news on Tuesday night. This is how Virgin Atlantic frequent flyers learned of the move yesterday morning:

We have some news that we want to share with you in that we have recently announced our intention to withdraw flights between Sydney and Hong Kong from 5 May 2014. 

The reason behind this is that increasing costs and a challenging economic environment has affected our revenue, which has meant that our Sydney and Hong Kong route is sadly no longer considered profitable. Our daily service between London Heathrow and Hong Kong will continue to operate as normal. 

Here are a few words from our Chief Executive Craig Kreeger: 

“We intend to withdraw our services between Sydney and Hong Kong. Despite the best efforts of our employees, external factors such as increasing costs and a weakening Australian dollar have affected our profitability.” 

“These are still difficult times for the airline industry and as part of our strategy to operate more efficiently we need to deploy our aircraft to routes with the right level of demand to be financially viable.” 

We wanted to let you know this news as soon as possible and appreciate that you may have some questions. So, if you’re travelling with us between Hong Kong and Sydney after 5 May and booked via a travel agent, please contact them for more information. If you’ve booked directly with us, please feel free to get in touch with our Reservations Team on +61 2 9004 5549 who will be happy to help. You can also visit our Frequently Asked Questions. 

We will update you on what this might mean for your existing Flying Club miles balance in due course, however in the meantime please continue to earn and spend miles as normal. 

Best wishes 

The Flying Club team

Virgin Atlantic plans to fly its last flight from Sydney to Hong Kong on 5 May 2014 and the last flight departing Hong Kong to Sydney on 4 May 2014.

Virgin Atlantic is 51% owned by Richard Branson’s family company, and 49% by US carrier Delta, a trans-Pacific alliance partner of Virgin Australia.

Written by : Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    Short term prophesy. Watch the prices soar as this route now becomes dominated by Oneworld partners Qantas and Cathay Pacific. Longer term prophesy. Watch for Hong kong Express to move in to add a lower cost option on the route.

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