Virgin Atlantic exits Australian market, not a surprise

Courtesy Virgin Atlantic

Courtesy Virgin Atlantic

IS anyone at all surprised that Virgin Atlantic is ceasing its operations between Sydney and Hong Kong come May 5?

Virgin issued a statement to say that “the route is no longer considered profitable” due to “increasing costs and a challenging economic environment.” CEO Craig Kreeger added that “external factors such as increasing costs and a weakening Australian dollar have affected our profitability.”

Virgin has never quite made it in this part of the world and prefers to focus on the direct traffic from London Heathrow to Hong Kong and Tokyo Narita. Even Singapore Changi and Bangkok Suvarnabhumi as stopover hubs present no real attraction. For onward traffic the competition is tough. Out of Hong Kong, Qantas and Cathay Pacific dominate. Virgin is also feeling the pinch with more passengers flying London to Australia direct on the back of the Qantas-Emirates alliance instead of routing through Hong Kong.

Exiting the Australian market may pose more a concern to Australian tourism as demand lags capacity. As for Virgin, there is speculation that the void may be filled by Virgin Australia which would find it more efficient operating the medium-range Airbus A330. Even then the Australian carrier prefers to be cautious, weighing the advantages of code-sharing with partners that include Singapore Airlines, Etihad Airways and Air New Zealand for international operations while it works at its domestic market.

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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