Mackay airport lounge closed as airline reviews network

Virgin announces new direction for struggling company, as it closes lounges and forms new partners for regions

Mackay Airport. Picture: Cas Garvey

A STRUGGLING airline has chosen a different direction as Virgin Australia announces a new business model to stay in the skies.

But Mackay flyers may be less comfortable with the changes as the company closes its airport lounge, alongside Darwin and Cairns lounges, with the Canberra rest area under review.

New Virgin Australia Group chief executive officer Jayne Hrdlicka said the lounges were forced to close because of low visitation numbers at the three airports.

Other lounges across the country reopened this week, as the airline exited a voluntary administration period.

Virgin Australia collapsed in April and went into voluntary administration following the onset of the coronavirus pandemic, with debts of $6.8 billion.

In September Bain Capital, an American investment giant, secured control of Australia's second-largest airline for $3.5 billion, ensuring $650 million in customer flight credit and protecting 6000 aviation jobs.

This week Ms Hrdlicka said the new Virgin business model would target the mid-market of the aviation industry and would cater to price-conscious travellers wanting a premium experience.

The new Virgin Australia Group chief executive officer Jayne Hrdlicka said the lounges were forced to close because of low visitation numbers at the three airports. Picture: Evan Morgan

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"Australia already has a low-cost carrier and a traditional full-service airline, and we won't be either," she said.

"Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service."

Ms Hrdlicka said the airline would retain its regional flight business and was expected to retain one-third of the Australian aviation market, which it held before the health crisis.

"(We have) a commitment to regional Australia including the restructuring of Virgin Australia Regional Airlines to become a more sustainable and profitable business following a comprehensive business review," she said.

The new business model comes as the ACCC granted interim authorised the airline to co-operate with Alliance Airlines to support 41 regional services.

The co-operation would allow Virgin Australia and Alliance Airlines to share information, and to agree on service capacity, schedules and potentially revenue sharing on the routes on which they operate, including for new routes not currently serviced by either airline.

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It would mean that Virgin Australia and Alliance Airlines would not compete with each other on the routes covered by the agreement.

"This interim authorisation will help facilitate a more competitive aviation landscape as Australian consumers resume travelling and demand for flights increases," ACCC Commissioner Stephen Ridgeway said.

"We acknowledge there is some urgency to this matter. A delay in Virgin Australia fully re-establishing its network, while other airlines are increasing services in response to greater demand as travel restrictions ease, is likely to result in less competitive markets."

Mr Ridgeway said the partnership would still have to compete fiercely with Qantas Airways and Qantas-owned Jetstar.

It is understood the agreement could impact flights from Brisbane to Mackay, Proserpine, Emerald, and Moranbah.

A Mackay Airport spokeswoman declined to comment on the lounge closure, but said the airport would investigate how the new airline partnership would affect flights across the region.

 

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