Virgin Australia frequent flyers face stiff rise in carrier charges

October 05, 2019
Virgin Australia

Virgin Australia frequent flyers face hefty increases in carrier charges imposed on redemptions from early next year.

The loss-making carrier says the increases are necessary to cover increased airline operating costs.

Exempt from the increases are flights on the highly competitive trans-Pacific market where Virgin flies to and from Los Angeles.

Economy class passengers on domestic and trans-Tasman face big jump from $A3.50 to $A10 while business class passengers face a lesser increase from $A5.50 to $A10.

International short haul charges will rise from $A25.00 to $A35.00 in economy and from $A50 to $A70 in business class.

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On the airline’s Hong Kong services, economy passengers will see an increase from $A35 to $A45 while business class travelers will a jump from $A50 to $A98.

The increased charges will apply to bookings made after January 8 on Virgin Australia operated flights and can be paid with Velocity points or a combination of Velocity points and cash.

Virgin announced in August it would conduct a sweeping review of its operations, layoff staff and streamline its various divisions to return the company to profitability.

The group reported an underlying pre-tax loss $A71.2 million and a statutory loss after tax of A$315.4 million for the 12 months ended June 30, 2019.

The underlying loss compared to an underlying profit before tax of $A64.4 million for the prior year and, was a decline of $A135.6 million.

Virgin said market demand moderated in the second half of the financial year, impacted by the timing of the Easter holiday period and the Australian federal election, which saw both the corporate and leisure travel sectors soften.

It said the challenging second-half trading environment was compounded by increasing costs.

These included fuel and foreign exchange headwinds of $A158.8 million and a $A15.0 million investment in Trans-Tasman routes following the end of the alliance with Air New Zealand.