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Virgin Australia’s new Melbourne-Hong Kong service that commenced on July 5 2017 has been on average more than two-thirds full during the first two months of operations, new figures show.
An analysis of the Bureau of Infrastructure, Transport and Regional Economics (BITRE) monthly reports on international passenger traffic indicated Virgin Australia carried 15,818 passengers (7,887 inbound and 7,931 outbound) between Melbourne and Hong Kong in the months of July and August.
That translates to an average load factor – an industry measure of how many seats are occupied – of 68.3 per cent for Virgin Australia flights departing Hong Kong and 68.7 per cent for the airline’s flights departing Melbourne.
Virgin Australia began flying between Melbourne and Hong Kong with Airbus A330-200s configured with 20 lie flat business class seats with direct aisle access for every passenger and 255 seats in economy at eight abreast on July 5.
Initially the flights were operating five times a week with a split schedule featuring either daytime or overnight departures from Melbourne, depending on the day of the week, and evening departures from Hong Kong.
However, the airline has managed to secure additional slots at the busy Hong Kong Airport to boost the schedule to daily and offer a more consistent timetable of morning departures from Melbourne and evening departures from Hong Kong.
Virgin operates the route as part of an alliance with Hong Kong Airlines.
The airline has said previously its entry on the Melbourne-Hong Kong route dominated by oneworld alliance members Qantas and Cathay Pacific led to 30 per cent decrease in fares.
Indeed Virgin Australia offered some eye-catching sub-$400 promotional fares in July, believed to be a new low for full-service airlines offering nonstop or one-stop itineraries between Australia and Hong Kong. There have also been sales from Qantas of $499 return between Australia and Hong Kong.
Virgin Australia chief executive John Borghetti said recently he was pleased with how the flights were performing and described the various sale fares as more about “competitiveness rather than the market not growing”.
“Our loads are good, I’m very happy with the way our Hong Kong services are going,” Borghetti told reporters after Virgin Australia’s annual general meeting in Brisbane on November 8.
“One of the things that we are experiencing, frankly it surprised me how much we are seeing of this, is traffic from China boarding our flights in Hong Kong through our alliance with Hong Kong Airlines.
“The Hong Kong-China market is quite strong.”
Borghetti said Virgin Australia was continuing to work on securing additional takeoff and landing slots to further expand its Hong Kong operations, as well as entering mainland China.
“We are working hard in getting additional slots in a couple of cities,” Borghetti said.
“I would like to think that by this time next year we will have slots. Now I won’t say which city that will be but we will have slots.”
Any additional flying to North Asia would be with Virgin Australia’s existing fleet of six Airbus A330-200s, Borghetti said.
Lechuga
says:This is very positive for VA. only issue is they’re lacking the fleet to keep expanding, unless they want to use narrow bodies on domestic flights, which they’ll lose a bit of ground to Qantas.
MP
says:VA have a few tricks up their sleeve with the new 737 Max’s on order; expect to see 6 – 10 a lie flat Biz seats for use trans – con & perhaps even trans – Tasman
Lechuga
says:@MP yeah, but honestly for something like that I would’ve thought they might have picked up the MAX 9 (or 10) just for a bit of a stretch in the plane for those lie flat seats.
Rocket
says:Their entry may have lowered fares – temporarily – but is it sustainable. I mean just because VA come in and cause fares to go down doesn’t mean it’s going to be profitable. This seems to be their problem all round. They want to offer premium service but they still want to be the price leader and with costs now higher than Qantas’ I don’t see how this is sustainable.
Tony
says:Are VA offering through tickets to London via Virgin Atlantic? Could be a viable alternative to Qantas Dreamliner flights Melbourne, Perth to London. Same 1 stop.
Scott
says:Fantastic result from a new entrant. Great loads, great product.
MP
says:Don’t assume they will all end up being -8’s
john doutch
says:Yep Rocket, I agree. Even at them cheap fares I would have expected a load factor in the high 70’s. They need to make some money.
Roger
says:This is good, but even six A330s all used on international services really can’t go to that many dinsteations, even if some are served—say—three times a week or so.
Jarden
says:The 737 Max order has been pushed out to 2019 now still a while away
Craigy
says:I think you can generally ignore quoted promotional fares as what is missing is how many seats were released at the promotional fare and for which departures. The better fare to quote would be the average fare across those carriers servicing Melb – HKG. If a load factor of 68% or 187/255 seats is covering cost then that’s a positive. The question is, if Virgin is adding to the competitive landscape effectively, why only a 68% load factor?
Scott
says:The reason they only achieved a 68% load factor is that the lead time was minuscule. Tickets were only listed for sale 4months before launch, due to approval restrictions. Airlines normally sell tickets for 9-12months before the flights day of departure.
Take this into account and it’s a fantastic result.
J
says:And you think an airline purely makes money on PAX? 😉
Craigy
says:@ J no I don’t. But we are talking about load factor not cargo.
JoeJo
says:I wouldn’t worry about a lack of planes in the fleet. The lease market is chocker block full of A330s (and not a few A380s I hear) about to or ready for immediate delivery should Borghetti need them.