Virgin Australia cuts flights, slashes executives’ bonuses as it feels the hurt from coronavirus

Aussies will have travel plans scrambled with Virgin Australia announcing cuts to services to New Zealand, LA and other destinations due to coronavirus.

Virgin Australia will cut flights and slash bonuses for executives as it copes with the fallout from the coronavirus crisis.

It will also seek relief from government charges as it joins airlines around the world in attempting to soften the blow from global downturn in travel due to the pandemic.

The airline announced this morning it would reduce services to Los Angeles, Japan and New Zealand, as well as end its Auckland services to and from Tonga and the Cook Islands.

Passengers will be contacted about any changes to their existing bookings.

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Customers with new or existing bookings to international destinations until June 30 will be given the option of changing their flight to a later date, and/or a different destination, with change fees waived.

“The circumstances we are in at the moment, be it the softness from bushfires or coronavirus, see a lot of hard decisions being made,” Virgin Australia’s chief executive officer Paul Scurrah said at a press conference this morning.

The announcement came as Virgin Australia confirmed a member of its cabin crew was being treated for coronavirus.

Mr Scurrah said the company would cut back flights to Japan from seven services a week to three, and its flights to Los Angeles from seven services a week to five.

Domestic services will also take a hit, being cut back by 6.2 per cent by December.

Virgin Australia had previously announced it was slashing its Tigerair fleet and cutting back on flights in response to the virus crisis. It expected an earnings hit of between $50 million and $75 million in the second half but has now suspended this guidance, AAP reported.

However, Mr Scurrah said the company was “well positioned to weather the storm”.

“What I announced today was steps that will mitigate the risks presented to our airline,” he said,

“We are in a very strong position … We have taken strong action to mitigate the risks of coronavirus today. I am really happy with that position and the actions we have taken today to

make sure that we mitigate the risk, however if further hard decisions are required, we will make those hard decisions.

“As an airline that is more than 80 per cent leveraged to the domestic market here in Australia, we are well positioned to weather the storm.”

He said a silver lining of the downturn in international travel was increasing interest in domestic destinations such as Western Australia, the Gold Coast, Sunshine Coast and Hamilton Island. “This demonstrates Australians are continuing to travel within our own backyard and support local tourism,” he said.

Virgin’s rival Qantas has previously announced flight cuts to Japan, Hong Kong and New Zealand.