Bain Capital, the US private equity firm that purchased Virgin Australia in June, has now revealed its restructuring plans for the airline. Significant as they are, it’s hoped that these new plans will ensure the airline’s future under its new ownership.
The operator is set to become a domestic and short-haul international-focused airline with an all Boeing 737 fleet, although these new plans come at a cost of 3,000 job losses and the suspension of its LCC Tigerair Australia.
“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19, with many Australian airports recording passenger numbers less than 3% of last year and ongoing changes to government travel restrictions,” commented Virgin Australia Group CEO Paul Scurrah.
The new plans for Virgin Australia will see it focus on its critical domestic and short-haul networks which made the operator such a potent force within the country for 20 years. Long-haul international flights will remain suspended for the time being, until the impact of the COVID-19 crisis eases. Coupled with the suspension of Tigerair, it means that the operator’s fleet will undergo a drastic change with its Airbus A330s, Boeing 777s and its ATR 72s along with Tigerair’s Airbus A320s all being grounded.
The loss of Tigerair means that Jetstar is now the only LCC operating out of Australia, which perhaps, given the significant drop in customer demand, can be seen as a sensible choice for Virgin Australia.
The reorganisation of airlines due to the impact of COVID-19 looks set to continue for some time yet, with each country’s airlines having to adjust to new ways of working and operating with a far smaller pool of passengers seeking to travel.
With the continued media talk of a possible second pandemic wave sweeping the globe, radical restructuring plans such as those at Virgin Australia look set to become more commonplace as airlines big and small struggle to survive.
