Capacity-cutting Virgin opts for smaller planes for Brisbane-Cairns

Virgin Australia has cut back capacity as the airline heads for another annual loss.

Virgin has cut back on its capacity as it heads for another loss. Picture: AP

The new boss of Virgin Australia has pulled more than 300 seats a week from the Brisbane-Cairns route by replacing Boeing 737-800s with smaller planes ­operated by Alliance Airlines.

The air charter operator will fly two return services a week for Virgin, on Thursdays and Fridays, in response to weaker demand.

It is the latest in a series of ­capacity cutbacks overseen by chief executive Paul Scurrah, with Perth-Geraldton to be axed in July and services between Auckland, Christchurch and Sydney scaled back from May to ­September.

The Brisbane-Cairns capacity reduction would begin immediately but Virgin Australia said it remained “committed to this area of our network”.

“We will continue to provide a strong schedule proposition on this route,” it said in a statement.

Virgin Australia’s Boeing 737-800s can carry up to 176 passengers, including eight in business class, while Alliance Airlines’ Fokker 100s seat 100 in a single cabin.

A trading update released by Virgin Australia last week showed the airline was headed for another annual loss as a result of weaker demand, and fuel and foreign exchange headwinds.

At the time, Mr Scurrah said capacity would continue to be ­reviewed, with the airline already reducing its number of seats in the market by 1.5 per cent. “There’s going to be a very, very tight look at where we’re flying and how those routes are performing,” Mr Scurrah said last week.

A note released by market ­analysts Credit Suisse this week said Virgin’s commitment to ­capacity cuts was “clearly positive” for Qantas.

“The clear election result is likely to now be positive for corporate travel ­demand that has been weak in the run-up to the election,” Credit ­Suisse analysts said. “Lower risk of unionised ­labour unrest and wage inflation due to the ALP failing to win government is also a positive.”

Brisbane-Cairns is the country’s 12th-busiest return route, and carried 106,700 passengers in March last year across all airlines. The latest Bureau of Infrastructure, Transport and ­Regional Economics data showed that fell to 99,600 in March this year.

Other routes performing poorly, according to the BITRE data, included Brisbane-Darwin, with passenger numbers down 12.5 per cent in March across all airlines; and Brisbane-Hamilton Island, with numbers down 8.2 per cent despite a 5.3 per cent capacity boost.

Alliance operates other ser­vices for Virgin Australia, including between Brisbane, Bunda­berg, Gladstone, Moranbah and Port Macquarie, and between Brisbane and Port Moresby.