Virgin Australia: Withdraws from Hong Kong

As of 2 March, 2020, Virgin Australia and its daily Sydney-Hong Kong service are out of here. That will end the three-year trial to crack Hong Kong as its hub in Asia.

Virgin Australia had previously announced in November 2019 the axing of its Melbourne-Hong Kong service as of 11 February.

The last 12 months have been a particularly bad time to try and capitalise on Hong Kong, what with the anti-government protest movement, and now the coronavirus outbreak. Virgin Australia had hoped to use it as a beachhead to capitalise on the vast Chinese market and exploit its Chinese shareowners and their airlines.

‘While the decision to withdraw from the Hong Kong market has been a difficult one, it demonstrates our strong focus on driving greater financial discipline through our network.’

Virgin Australia Group Chief Commercial Officer, John MacLeod

Department of Infrastructure Data shows that Virgin Australia has had a 36% vacancy rate on their Hong Kong flights, compared to market leaders – Cathay Pacific and Qantas with 20%.

Virgin Australia will be contacting customers booked to fly to Hong Kong after 2 March to arrange alternative flights.

2PAXfly Takeout

Paul Scurrah, the newish CEO – he’s been in the job for about a year – has been sorting through route profitability with a fine-toothed comb, and has not been afraid to cut loss-making routes.

What is not clear is what routes he is going to reassign those aircraft too, and where he sees possibilities for route development for Virgin Australia. Maybe those A330-200’s will go back to trans-continental Perth routes instead of the unflyable 737 MAX’s they have on order?