Australia, insurance, car, home, live, holidays

Virgin chief Jayne Hrdlicka said the route was important to the Brisbane-based business and hoped it would boost trade and tourism in Far North Queensland.Credit:Dan Peled

Virgin chief Jayne Hrdlicka said the route was important to the Brisbane-based business and the airline would likely continue to expand its international network.

“We’ve got lots of opportunity ahead of us to stretch a bit further than we have so far,” she said.

Hrdlicka declined to weigh into whether the route signified a return to the ASX board for Virgin.

“We’re honoured to get into a position where we have options in terms of managing future funding,and at some point,I’m sure we’ll contemplate an IPO,but there’s no new news on that account,” she said.

The route announcement follows the airline’s recent declaration it has returned to profitability two years after its near-demise. Bain Capital took over Virgin when it entered voluntary administration in 2020 for $3.5 billion.

The route is Virgin’s first direct international flight longer than seven hours since the takeover. Virgin’s old guard had intended to start flying from Brisbane to Tokyo in March 2020,but that plan fell into disarray because of the coronavirus pandemic.

The Tokyo route has long been thought to be Virgin’s first step to re-emerging as a long-haul carrier. In 2020,the International Air Services Commissionsought a meeting with the airline after it tried to extend its seat allocation between Brisbane and Tokyo after its departure from voluntary administration.

“We know the Japanese market is hugely important to trade and tourism in Far North Queensland and the sunshine state,and our service will result in more international visitors arriving in Cairns every year,having a very positive impact on the state’s economy,” Hrdlicka said.

Bain retired Virgin’s former international subsidiary Tiger Airways in 2020 and has so far contained the airline’s international presence to short-haul destinations including New Zealand,Bali and Vanuatu. Until now,it has left long-haul flights to its partner carriers including United Airlines and Qatar Airways.

The airline’s former long-haul fleet of Boeing 777s and Airbus A330s was scrapped under the new ownership. The Haneda route will be serviced by the airline’s 30 Boeing 737-MAX 8 jets,due to begin flying from next year. The Max 8s have a weekly capacity of about 2000 seats,giving the airline the ability to explore less-travelled routes without the pressure to fill seats.

“Japan is the first announcement to really demonstrate what we can do,” Hrdlicka said.

Financial statementslodged with the corporate regulator in Septembershow Virgin’s operational loss ballooned to $386.7 million last financial year,compared with $76.8 million in 2021. Hrdlicka announced the group had returned to making profits in November.

The airline has reduced its costs by $300 million since November 2020 to facilitate its price restructure and has grown its fleet by more than 50 per cent since February last year.

Ailevon Pacific Aviation Consulting director Matthew Findlay said the Cairns-Tokyo route signified the airline was looking for unique routes with high yields.

“I think we’ll see Virgin continue to fly between smaller,profitable destinations. Gone are the days where airlines are looking to find marquee routes,” Findlay said.

Findlay said it was likely Qantas and Virgin would seek out new routes to capitalise on their investments in smaller,low-emissions aircraft.

The Business Briefing newsletter delivers major stories,exclusive coverage and expert opinion.Sign up to get it every weekday morning.

License this article