Virgin Australia has unveiled its plan for a stronger, more profitable and competitive airline as it comes out of voluntary administration.
Its new owner Bain Capital has announced a string of bold decisions it hopes will turn the airline's fortune around and make a profit, including selling off around 20 of its aircraft, cutting 3000 jobs and closing its low-cost subsidiary, Tigerair.
The team, led by Virgin Australia Group CEO and Managing Director Paul Scurrah, want to focus on delivering "exceptional experiences and great value" within Virgin Australia's core domestic and short-haul international business.
Long-haul international services will remain suspended until the global travel market recovers and the announcement makes no mention of any return to New Zealand skies.
Although it's ditching Tigerair Australia, the company will hold onto its Air Operator Certificate (AOC) should they want to launch a low cost airline in the future.
In a statement to the ASX, the airline said it would be "securing approximately 6000 jobs when the market recovers" with another 3000 "impacted" by the changes.
The airline will also move to operating an all-Boeing 737 mainline fleet, removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types from its books.
What's staying:
- The airline's Boeing 737s and regional/charter fleet
- Approximately 6000 direct jobs and indirect employment for more than 30,000 Australians
What's gone:
- All ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types from the airline's fleet
- Long-haul international until the global travel market recovers
- Tigerair Australia brand discontinued
- 3000 jobs "impacted" by the changes
Scurrah predicts demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with a "real chance" it could be longer.
"In a country as big as Australia, strong competitive airlines are critical in helping restore the economy, which is why in the face of the worst crisis our industry has ever seen, a well-capitalised Virgin Australia Group with a solid and sustainable future is a great outcome for Australians and the nation's economy," Scurrah said.
Virgin Australia closed its New Zealand bases in March.
