Bali flights set to become a budget carrier battlefield
VIRGIN Australia is trying to turn around its international arm by calling in low cost carrier Tigerair to take over a number of Bali services.
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VIRGIN Australia will pull out of a number of international routes next year, to allow budget partner Tigerair to take over.
From March 23, 2016, Virgin will no longer operate flights between Melbourne, Perth, Adelaide and Denpasar after a poor financial performance for its international arm.
The move will see Bali services become a battlefield for low cost carriers, with Tigerair going up against Jetstar and AirAsia.
Virgin has also announced it is axing Perth-Phuket services from January, but it will increase flights to New Zealand and add capacity to its Fiji and Solomon Island services.
Virgin Australia will continue Bali services out of Sydney, Brisbane and Port Hedland.
The Tigerair flights to Bali will be the first international segments flown by the budget airline that was bought by Virgin Australia last year.
Three “all economy configured Boeing 737-800 aircraft” will be used by Tigerair on the Denpasar services subject to relevant regulatory and operational approvals.
Virgin Australia Velocity Frequent Flyer members will still be able redeem points on seats for Tigerair services to Denpasar.
The major overhaul follows a worse than expected result for Virgin Australia’s international sector.
Although the airline achieved a significant financial turnaround on its domestic operation, Virgin Australia International suffered a $22.8 million decline to record an underlying loss of $68.9 million for 2014-15.
“Increased competitive pressure particularly in the South East Asian and long haul markets” was blamed for the struggle.
But the financial results noted that improvement was now occurring as a result of new initiatives such as the introduction of Business Class on Tasman and Pacific routes.
Overall, Virgin Australia recorded a $49 million underlying loss for the financial year, an improvement of $162.7 million on the previous year.
Virgin Australia Group CEO John Borghetti said the business was “well positioned for future growth”.
“While there are challenges on the international front, we are confident with our improvement plan,” said Mr Borghetti.
“Our people have demonstrated enormous skill and dedication in their disciplined execution of the Virgin Vision strategy.”
Originally published as Bali flights set to become a budget carrier battlefield
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