Revamped Virgin to maintain market share, keep business class

by AirlineRatings editors
November 18, 2020
virgin airlines australia

Virgin Australia aims to keep its current one-third market share, retain business class and re-open much of its domestic lounge network as it tackles a volatile market under new owners Bain Capital.

But changes are in store for both the lounges and business class with the first  “new look”  lounge opening in Adelaide in early 2021 and a “more accessible” business class aimed at better aligning with customer expectations relaunching next year.

New chief executive Jayne Hrdlicka unveiled the new vision for the airline at Brisbane Airport on Wednesday as she took up the reins from former CEO Paul Scurrah.

READ: Virgin changes hands well-placed to tackle challenges, administrators say.

Targeting the mid-market, Virgin is re-opening lounges from today and will retain three domestic aircraft seating options: business class, Economy-X extra legroom seating and economy.

Complimentary snacks in economy class will be replaced by a buy onboard menu but passengers will still get free tea, coffee and water.

Inflight Wi-Fi and entertainment are under review with more details to be announced in 2021.

Virgin will re-open a network of domestic lounge network at airports with high volumes of frequent travelers as demand resumes. It will retain the Premium Entry feature at those lounges that have it.

The network will include lounges in Melbourne, Sydney, Brisbane, Adelaide, Perth and Gold Coast and will initially offer an interim food and beverage menu that will be reviewed as demand rises.

Lounges in Darwin, Cairns and Mackay will close while Canberra remains under review.

On the way are new state-of-the-art check-in facilities— due to open across major airports by December 2021—and an enhanced mobile app.

There will be no change to Velocity Frequent Flyer with the airline promising “substantial airline and non-airline earn and redemption opportunities” for its 10 million members.

“In a commitment to members, Velocity granted a 12-month status extension earlier this year, and there has been no change to the number of points needed to redeem rewards,” the airline said, adding that it will announce new partnerships in 2021.

The new plans also promise a comprehensive network of domestic and regional destinations and the retention of Virgin Australia Regional Airlines (VARA), although it will be restructured following a business review.

“The travel environment is changing and so are our customers’ preferences. We know that leisure travelers, small and medium businesses, and many corporates are now emerging from COVID-19 wanting better value,” Hrdlicka said in her first statement as CEO.

“They are hungry for flexibility and choice, a trusted brand that resonates with their values, and great prices, along with the premium features they value most.

 “Today, we’ve announced a plan that will ultimately give our customers what they value without the big price tag: premium lounges, a new and fresh retail offering onboard, a choice of cabins, better digital technology and a more streamlined check-in experience.

“We will also continue to deliver our award-winning service, strong network of destinations, an award-winning frequent flyer program and a safe and reliable operation.

 “Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either.

“Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service

“We will continue to evolve our offering for our customers based on data and feedback, but the Virgin Australia experience millions of travelers know and love is here to stay.”

Hrdlicka said the airline was emerging from administration stronger and more competitive and ready to face the challenges ahead but acknowledged the market was still volatile.

“We have removed an enormous amount of complexity from our business, greatly improved our cost base, and have an extraordinary team on the ground and in the air to deliver our new plan,” she said.

“We are more resilient than ever and have the backing of Bain Capital who are deeply invested in seeing us succeed over the long term.

“As we have seen with the recent issues with South Australia, the travel market remains uncertain.

“We are however seeing some positive signs of recovery. Borders are beginning to open and a potential vaccine is on the way.

“We expect continued volatility, but as demand recovers, we’ll achieve a market share consistent with our pre-COVID position and continue to invest in, and grow, the fleet in line with increases in demand.”

 “Shaping our future will be a collaborative effort across the Virgin Australia Group and I’m thrilled to see the genuine excitement from our people about the future of their airline.”