Virgin Australia seeks Hong Kong, Beijing traffic rights

A330-243_VH-XFD_SYDNEY_14MAY2016_SETH JAWORSKI-1
Virgin Australia A330s could be flying to Hong Kong and Beijing from June 1 2017. (Seth Jaworski)

Virgin Australia has applied to the International Air Services Commission seeking traffic rights to operate daily services from a “major Australian gateway” to both Hong Kong and Beijing as part of its newly-announced alliance with Hainan Airlines parent company HNA.

“As part of a proposed alliance with the HNA Aviation Group Co. Ltd, Virgin Australia International Airlines Pty Ltd (Virgin Australia) intends to commence a daily service between an Australian major gateway airport and both Beijing and Hong Kong,” Lee-Anne Tomkins, Virgin Australia’s head of government and international relations, wrote in the letter of application to the IASC.

“These flights will be operated with Airbus 330-200 aircraft configured with 275 seats from 1 June 2017.”

Tomkins’ letter – included as part of the IASC’s notice of application published on Wednesday – notes Virgin Australia is seeking an allocation of 1,925 seats per week on the China route and an allocation of seven frequencies per week on the Hong Kong route.

The application comes only a day after Virgin Australia and HNA announced their “strategic commercial alliance”, which is also seeing HNA take an initial 13 per cent equity stake in the Australian airline.

On Tuesday Virgin Australia CEO John Borghetti had told media that his airline would begin flights to China some time in the first half of calendar 2017, but declined to say which routes would be served or what equipment would be deployed to Australia’s fastest growing inbound tourism market.

“This strategic alliance will have us jointly operating to China from Australia,” Borghetti said.

“We certainly will be flying there. Whether it is all Virgin Australia aircraft or not, let’s see how that works out. It will be a joint operation and that’s what’s important. Both of us will be promoting traffic between the two countries.”

“There is a lot of attraction of operating into Beijing for example. There is also a lot of attraction of operating into Hong Kong but that is still being worked through so let’s see.”

The IASC says interested parties have until June 9 to lodge a comment on the Virgin application.

Comments

  1. Christopher Campbell says

    Are they going to pull a330-200s from the domestic fleet or order more a330s?

  2. deano says

    This is a far better use of Virgins A330s
    if there is a sustained downturn in the domestic market, a movement of 737s to Perth would appear to be a great utilization of their fleet

    I ask though, could Bejing be an economic 1 stop alternative to Europe ?
    The flight time look similar on paper
    Coincidentally Virgin Atlantic are still flying to Hong Kong, could these services be timed to offer onward traffic to London

    A whole world of opportunity seems to be opening up for Virgin if they play their cards right

    One stop to Europe with the main sector on Virgin
    Or Virgin all the way to London
    I would think that Hong Kong or Bejing would be far better stop-overs than what the ME3 have to offer

    Perhaps with foreign support, Virgin could reach the glory days of the Qantas European network in the 80s but me thinks that may be a big ask……

  3. Sam says

    Didn’t Ansett start Asian international ops a few years before their collapse…?

  4. Flyer says

    Interesting that press is saying that Virgin has done a great deal and Air Nz has lost out? Not sure how as Air NZ still has a shareholding ( greater than Chinese company) and is in a dare more profitable position that VA is. Remember VA hadmt made any money for years ! They will be flying in the most competitive cut throat region in the world ( China) and still asking for another $800 m – good luck there – no wonder shareholders ( including Branson are selling out!!)

  5. Elliot says

    Certainly one would imagine that utilisation of the domestic A330 fleet needs to be a focus for VA.

    On the subject of VA marketed tickets from AU – Europe, this gives even more flexibility, EY, SQ and now potentially VS and HU. As a business traveller, I appreciate the ability to stay within the family, while choosing the routing that suits me. Ideally, it would be easier to choose one airline to Europe and another home, allowing stopovers in multiple locations for little extra cost.

    I would have liked to see VA team up with NZ to allow routing through both EU and US…

  6. michael Jones says

    I hope Virgin flies from Sydney and Melbourne to both Beijing Hong Kong and consider Tokyo too. from Both Sydney and Melbourne

  7. Tony says

    Someone who works there couldn’t even work out reciprocal air rights with Indonesia so they had to fly empty planes to bring back Tiger passengers. Now they want to fly to China!!! Lets see if they get that right this time!

    Someone also thought it would be a good idea to sponsoring a car racing series that teams and manufactures are pulling out of! How do these people have jobs?

    Flying to China or connecting Chinese passengers should have been done 10 years ago when the money starting flooding Australian property. Its too late now. The Australian economy is in recession.

    When the US raises interest rates let’s see who is going to step up to pay the millions in extra interest on their two billion dollar debt. Not to mention the cost of USD/AUD exchange rate.

    As usual I’m sure it will the the workers that pay the price for poor decisions made at board/management level. Branson is going to have to do a lot of smiling in front of cameras to keep up the illusion.

  8. Will says

    “Hong Kong or Bejing would be far better stop-overs than what the ME3 have to offer”, deano you are dreaming.

    Being an Aussie expat based in HKG, with monthly trips to Beijing I can tell you transiting through China / HKG has nothing compared to the like of DXB et al. Not only are there poor facilities here, the lounges are mediocre, dining options limited, and, in HKG at least, the facilities aren’t even 24 HR, nor is the express rail link to the city. This is despite large volume movements up to 0130 and from 0430 each day. Unbelievable for a city this size. Then there is the congestion and poor traffic management due to incompetent ATC compounded by the Chinese military closing airspace at will. Ground delays (after passenger boarding) of 4-6 hours are now common in PEK, with the longest I’ve seen being 12 hours, after calling for pushback. Out of HKG, the story is less dramatic but still not sustainable. European flights are routinely flow-contol delayed on the ground due to their requirement to enter Chinese airspace to the north over Guangzhou. During peak times their is also the compounding issues of slot availability – there is now a mad scramble to produce a 3 runway at HKIA as quickly as possible. It won’t be a fully operational 3 runway airport for the next 10 years. That’s if there are no delays. There is also now a lack of ground equipment and suitably qualified staff to support the growth. Think hour long delays on arrival due to no qualified personnel available to drive an aerobridge onto your aircraft.

    Travelling AUS to Europe, the ME3 win hands down (by comparison). I would choose them each and every time over risking the bureaucratic mess of connecting through PEK. I might, if other options were exhausted, consider HKG, but the ME3 product is far superior to any other you will find operating through here.

    Good luck to VA, however, I think it a worthwhile strategy to access China. But European connections. Really.

  9. k lane says

    VA please get your current business in order with your international routes firmly profitable before embarking on expansion

  10. Malcolm Davies says

    There is a great deal of capacity available to Australian carriers on routes to China.Available capacity to Beijing,Shanghai and Guangzhou is 26029 seats each way per week of which 2086 are utilised.Available capacity to other cities is 26,500 seats of which none are utilised.
    The only China route operated by an Australian carrier is Qantas’s service from Sydney to Shanghai operated by a daily A330-300.

  11. Chris says

    I think it will be SYD/HKG and SYD/PEK.

    With SYD/HKG would link with VS HKG/LHR and HX services HKG/HAK and HKG to other main land China destinations and OU (Hongkong Express) from HKG to Asian destinations.

    SYD/PEK would link in with HU/HX main land China and Asia destinations.

    With regards to NZ shareholding in VA, there is speculation in New Zealand that NZ has a major decision to make, being the major shareholder. NZ could be under pressure from SQ/EY not to sell, to keep a level playing field or run the risk being shut out and NZ ruining its recently restored relationship with SQ.

    In essence, the HNA investment in VA, is going to marketing battle with HNA and participating Star Alliance Partners who have a major stake in VA and operating between China/Asia and Australia/New Zealand including to lessor extent CA.

    Its going to be interesting to see how this pans over time.

  12. Ron says

    Virgin has fought for a long time to increase it’s market share to Perth. Taking A330’s off the route and replacing them with B737s would reverse the trend. Passengers, mainly business, would walk. Qantas doesn’t fly A330s to Perth for fun. So Virgin’s only option is to get more A330s or B777s. In an ideal world they would choose one new aircraft type capable of operating trans continental and inter continental, B787s or A350s. Having just refurbished the B777 fleet means they are committed to this type for a while so more of them may be the way to go. It must have been a pain to cancel services while the refurbishment took place so a few more airframes may be of benefit. Likewise the A330 fleet have had recent upgrades to business so there is good reason to add some more of this type also. It will be interesting to see what unfolds.

  13. Bowcher says

    From what I understand VA plan to lease another 1 or 2 A330s in order to operate these services.

    Everyone needs to let go of the whole Ansett dilemma, this isn’t Ansett, this is an entirely different company who has very wealthy owners and still has a cost advantage over QF, something Ansett did not.

  14. Just Sayin says

    275 Seats on an A332 is tight. Very similar to when JQ operated A332s. China Southern operates 3 Class A333s, with 275 seats. Unless they are priced at the low end of the market, VA will struggle on load factors.