Virgin resumes flights to Bali despite ongoing eruptions

MT Rinjani is still blowing its top near Bali and Australian airlines have finally resumed flights. But it won’t stop Virgin from taking a financial hit.

Virgin Australia CEO John Borghetti at the AGM. Pic Darren England.

VIRGIN Australia will resume flights into Bali today despite being uncertain as to whether conditions will allow for scheduled return services.

Jetstar began flying back into Bali yesterday after 16-days of cancellations enforced by the erupting Mount Rinjani.

The volcano has a history of erupting every seven years for two-years at a time — a reputation airlines are all too aware of.

Speaking after the Virgin Australia AGM yesterday, CEO John Borghetti said if people wanted to go to Bali, they wouldn’t stop them.

“If people want to fly up, of course we’ll carry them up,” said Mr Borghetti.

“Eventually (the eruptions) will stop. These are very difficult situations to read.”

The full impact of the volcanic ash disruptions which have dogged Bali services in July, August and again this month should be evident in Virgin Australia’s half year results, he said.

“We don’t want to put a number on it just yet simply because (eruptions) haven’t finished,” Mr Borghetti said. “It is obviously costing us money.”

Although flights into Bali have not operated since the start of the month, thousands of people have been brought home on recovery flights operated by Virgin and Jetstar.

Those with bookings to travel to Bali were offered the chance to change their destination at no extra cost, and Mr Borghetti said the take-up had been significant.

The most popular alternative destinations included Vanuatu, Fiji, Samoa and Thailand, along with Hamilton Island and Broome.

Mr Borghetti acknowledged the impact flight cancellations had on Bali but said he was confident it would bounce back quickly.

“Clearly while this situation is happening, people are to some extent holding back and waiting to see if it clears up,” he said.

“But we’ve got a pretty strong plan for Bali and from next year Tigerair starts flying there, and the forward sales are looking very good. They’re ahead of expectation.”

Virgin Australia also announced more capacity on trans-Tasman flights from next March, adding another five return flights between Sydney, Melbourne and Auckland each week and four more weekly seasonal flights between Brisbane and Queenstown.

Mr Borghetti said they were on track to return Virgin Australia to profit in 2016, and get their international arm back in the black by the end of 2017.

In the first three months of the financial year, Virgin Australia managed a $1.7 million after tax profit, representing a $60.7 million improvement on the previous corresponding quarter.

“It’s not easy to succeed against a dominant, incumbent competitor,” director Rob Thomas told the AGM.

“I don’t think shareholders fully appreciate what has been achieved, how we’ve reshaped Australia’s aviation industry.”

Originally published as Virgin resumes flights to Bali despite ongoing eruptions