New planes, luggage tracking: Virgin Australia’s plan to turn its tarnished image around

Virgin Australia hopes new aircraft and technology will improve its tarnished reputation ahead of an expected $1bn IPO in 2024.

Virgin Australia is banking on new aircraft and luggage tracking technology to improve its poor performance under which it has surpassed Qantas for flight cancellations.

Virgin, which was bought out of administration by Bain Capital in 2020, has been stymied by threatened industrial action in recent months which could have hurt its prospects for a mooted $1bn stock market listing in 2024.

In November Virgin Australia cancelled more flights than any other carrier and also had the worst level of on-time departures, according to Australian government data.

Virgin said aircraft maintenance issues, crew resourcing, weather, and air traffic controller shortages affected its performance which it acknowledged was below par.

The carrier has outlined initiatives to boost its performance such as new Boeing aircraft being delivered next year and a national luggage tracking system. Virgin said it was even enlisting its executives to help out at major airports during the Christmas rush.

“We always work hard to deliver our customers great value and choice, underpinned by a reliable and stable operation,” a Virgin spokesman said.

“We apologise that in November our operational performance was below our standards and did not meet all of our customers’ expectations.”

Virgin Australia’s on-time performance was similar to Qantas, excluding QantasLink, and ahead of Jetstar throughout 2023, while operating a higher volume of flights than both airlines.

Baker Young portfolio analyst Toby Grimm said Virgin would need to improve its performance before a possible stock market listing. Bain reportedly plans a $1bn initial public offering of Virgin Australia next year.

“Back in October when Qantas was going through its troubles, Virgin was riding but now we have seen a bit of a turnaround with the latest performance figures,” Mr Grimm said.

Airlines were capital intensive and it was “a necessity” to invest in things like new aircraft and technology, he said.

Virgin Australia’s flight cancellations recently overtook Qantas.

Virgin last month announced six more fuel-efficient Boeing Max-8 aircraft would enter service with its fleet in 2024, bringing the Max-8 order to 14 and the total planned for latest generation of aircraft to 39.

Virgin Australia chief strategy and transformation officer Alistair Hartley said the investment would create a more “modern, sustainable, and streamlined fleet”.

Virgin Australia said it had one of the youngest commercial fleets in Australia, with an average age of 11.7 years, and over the past two years it had committed to investing more than $400m in customer experience improvements and new technology

In August, the Brisbane-based carrier launched the nation’s first-ever airline baggage tracking tool that now covers more than two thirds of its domestic network.

“We also launched our rapid rebook tool earlier this year, which guests can access in the event of disruption to rebook a flight that suits them online,” the spokesman said.

During the peak holiday period Virgin was running a “Guest Ambassador” program which involved corporate staff volunteering to support frontline teams at major airports.

Virgin Australia averted expensive industrial action in the lead-up to Christmas by reaching a deal with cabin crew for increased pay and more time off.

The Transport Workers Union said the agreement with Virgin would deliver salary increases of between 14 per cent and 18 per cent to crew over a three-year period.

The TWU said cabin crew, who recently voted 99 per cent in favour of industrial action in support of their claims, had achieved an agreement that “delivers better pay, safer and fairer rosters, and work-life balance”.