‘Some people may die’ but border must open says Virgin chief Jayne Hrdlicka

Virgin’s CEO says international borders need to reopen so Australia won’t get left behind, even though ‘some people may die’.

Virgin Australia CEO Jayne Hrdlicka says international borders need to be reopened despite some risks. Picture: Sarah Marshall

Virgin Australia CEO Jayne Hrdlicka is clinging to the hope the airline will be flying to Bali by Christmas, saying Australia risks being left behind if international borders don’t reopen once the most vulnerable people were vaccinated.

Despite acknowledging that “some people may die” as Australia learned to live with COVID, Ms Hrdlicka said it was critical for our health and economy that borders reopened, well before June 2022.

“It will be a difficult thing to do politically because the narrative needs to change. It needs to change so that COVID will become part of the community,” Ms Hrdlicka told the QUT Business Leaders Forum in Brisbane on Monday.

“It will make us sick but won’t put us into hospital. Some people may die but it will be way smaller than the flu.

“We’re forgetting the fact we have learnt to live with lots of viruses and challenges over the years and the government has to learn to live with this and sooner than June 2022.”

As well as New Zealand flights from mid-September, Virgin Australia remained hopeful of restoring services to Fiji and Bali in December.

Ms Hrdlicka said given that was seven months away, it was reasonable to think such flights could be on the cards.

“I just don’t think that’s practical (to keep borders closed). The rest of the world will be pretty much behaving normally and we’ll be shut off from them and I don’t think that’s a viable place to be, certainly socially,” Ms Hrdlicka said.

“I think 40 per cent of Australians have a parent or loved ones overseas. and a year away from loved ones is a long time, but two years is unthinkable. So I think socially we’re getting to a point where it’s no longer acceptable.”

Virgin thinks it is impractical to keep border closed. Picture: Gaye Gerard

A Virgin Australia spokeswoman later clarified the comments saying Virgin Australia has and will continue to work closely with both state and federal governments to support the health and safety of the Australian community.

“We agree with State and Federal leaders that eradication of COVID-19 cannot be the goal for our country. We must learn to live with COVID-19 in the community in a way that protects the health and safety of our people but also opens Australia up to the rest of the world,” the spokeswoman said.

Economically, Ms Hrdlicka said it would take international borders to reopen to get airlines back into profit, by helping to lift confidence and drive up price points.

She said airfares were currently unrealistically low to stimulate travel demand and “get everybody back to old patterns of behaviour”.

“The industry has stepped back and said ‘it’s our job to build demand’ so we’ve done that with very sharp prices,” said Ms Hrdlicka.

“But for me getting the domestic travel market rebalanced and reformed will take international borders to reopen.”

Virgin Australia was also embroiled in a fierce rivalry with domestic market newcomer Rex, with both carriers competing for the “middle ground” book-ended by premium airline Qantas and budget partner Jetstar.

Although Qantas CEO Alan Joyce has suggested only one of those two carriers would survive, Ms Hrdlicka was not fazed.

“We’re going to fight to the death to hang on to our customers,” she said.

Watching the battle from the sidelines, former Virgin Australia group executive John Thomas said he believed his old employer could be heading down the same path as Ansett.

Now a Boston-based aviation consultant, Mr Thomas said it appeared Virgin had turned its back on the corporate market by targeting the middle ground, with at least major 25 clients jumping ship to Qantas.

“If you look at the last five years of Ansett, they turned their back on the corporate market,” Mr Thomas said.

“I don’t think Virgin is doing it deliberately but once you go down that path it can be hard to recover.”

Ms Hrdlicka insisted Virgin Australia had not given up on the corporate market and in fact retained “quite a big piece”.

She said many corporate and business travellers were value conscious and that’s the market Virgin Australia was targeting, along with leisure travellers.

“We’ve always said ‘we’re not going to try to be Qantas, we’re not going to be trying to compete with the premium end of the corporate market’,” said Ms Hrdlicka.

“Right now the volume (in the market) is leisure which is back to about 90 to 100 per cent of pre-COVID levels. The corporate market is about 50 to 60 per cent.”

Tuesday will mark six months since Ms Hrdlicka formally took over the job of Virgin Australia CEO, following the sale of the airline to US private equity firm Bain Capital.

Despite the challenges of the ongoing pandemic and a merry-go-round of state border closures and openings, Ms Hrdlicka said she was happy with the progress being made.

“It feels more like a couple of years (than six months),” she said.

“We’ve achieved quite a lot and there’s still so much uncertainty. We’re steeling for the next round of the story unfolding with respect to borders and COVID.”