Virgin Australia: new 737 Business Seat development halted – more consolidation

In another sign that new CEO Paul Scurrah is going to consolidate Virgin Australia towards profit, rather than expansion, the development of the new ‘qantam leap’ domestic business class – for those 737’s that fly between the east and west coasts of Australia has been shelved.

Looks like that leap is not going to happen any time soon.

Why a new seat?

Borghetti had been planning some expansion of Virgin routes to Asia. Say –expanding the current Sydney/Melbourne to Hong Kong route to include Brisbane, and maybe add routes to other Chinese destinations.

To do this, Virgin Australia would have needed to move some A330’s with their lie-flat business seats that currently work the Perth – East Coast transcontinental route onto the Australia – Asia routes. That would mean replacing them with 737’s on the transcontinental route. These planes have, standard domestic recliner seats – which would make them uncompetitive with Qantas Business Suites.

Hence the plan to find/develop a new product to maintain competition with Qantas’s A330 Business Suite on the east/west coast route. Presumably, this was scheduled to be installed on the new Boeing 737 MAX’s that Virgin was previously scheduled to receive starting in November 2019.

Why the delay?

Now, since Scurrah has announced the delay of the 737 MAX delivery date by 18 months, and changed the order – the development of these new business seats is not so vital.

Again it is a decision that looks at worst a cost delay, and at best a cost saving. On the service side, it means Virgin Australia is kicking down the road product innovation, that will affect its competitiveness in the longer term.

Take out

Paul Scurrah continues to make decisions that are about consolidation, cost cutting, and hopefully continued profit making. Its a dangerous game, but then so is running an airline. By delaying innovation, and new metal, will is he sacrificing short term gain for long term competitiveness?