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Virgin hints business will change post-crisis, shuts pilot base

written by Adam Thorn | March 25, 2020

Virgin Australia chief executive Paul Scurrah has hinted the airline group will not simply carry on as before when the COVID-19 crisis finally ends.

In a statement released on Wednesday morning, he warned, “We plan to return Tigerair Australia and Virgin Australia to the skies as soon as it’s viable to do so, however, I am mindful that how we operate today may look different when we get to the other side of this crisis.”

The business has indicated it is to close its New Zealand cabin crew base and Tiger Australia Melbourne pilot base, with the company commencing consultation.

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Earlier, Virgin said it would temporarily stand down 80 per cent of its staff, and increase domestic capacity restrictions from 50 to 90 per cent from midnight, Friday, 27 March until 14 June. Tigerair is to suspend all services immediately.

Scurrah said, “My focus has been on guiding this company through the crisis, and at the same time ensure the business is set on a sustainable path when the recovery eventually comes.

“I am only too aware of how much our people are hurting at the moment and these very tough decisions have weighed heavily on me and my leadership team. We are talking to our teams and we are working hard to do what we can to protect jobs and extend payments for as long as possible.”

On Tuesday, it was revealed Virgin wrote to the competition watchdog, the ACCC, to formally complain about Qantas’ recent attacks on the airline, questioning its future viability.

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Virgin Australia Airbus A330-200 VH-XFG at Townsville Airport on May 6 2018. (Dave Parer)
Virgin Australia Airbus A330-200 VH-XFG at Townsville Airport on May 6 2018. (Dave Parer)

In the letter, later obtained by The Sydney Morning Herald, Scurrah said Qantas’ actions “could cause immediate and irreparable damage to a competitive Australian air passenger transport industry”.

Scurrah continued, “Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia.”

He accused Qantas of falsely briefing journalists that Virgin Australia’s cash reserves were running low.

Scurrah was thought to be referring to numerous statements by Qantas chief executive Alan Joyce urging the government not to bailout Virgin.

Speaking to Sky News on Friday morning for instance, Joyce said, “It would be completely unfair to our sector. We’d be competing against the Australian government. Qantas couldn’t do that, it would be an unbalanced, uncompetitive environment.”

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9 Comments

  • Alan Brown

    says:

    Joyce is being disruptive and childish to say the least!! He should be looking after his own backyard instead of commenting on other airlines.
    Jobs are being lost, people are suffering, but this moron has Virgin in his sights.
    shows how low one can geo in order to progress.

  • john

    says:

    maybe Virgin International will no longer exist ?

    The profits must all be from the golden triangle (BNE, SYD, MEL) & to lesser extent CBR & PER.

  • SGS

    says:

    I agree. Now is not the time to be trying to run anyone out of business. Having said that I also understand why people have a reluctance to see financial aid going to a carrier which is essentially majority foreign owned. At the end of the day I would like to see a fairness for all where possible and it will be up to the respective management teams to pull their businesses through this. It serves no real purpose to eliminate the opposition at this time other than to make the other a little more profitable. I only wish everyone well.

  • Rais

    says:

    Virgin Blue cheap and cheerful was profitable. They may be thinking of returning to something like that model, perhaps with some premium economy.

    • James

      says:

      How do you know it was profitable? Are you assuming that it was?

      And if so, why the change to VA, lounges and business class?

  • Richard

    says:

    What gets me is, why did VA wait so long to make these cuts, QF did so last week, they then doubled down and sold and leased back $1B of aircraft. VA are slow to react, have little wriggle room to do anything, have nothing left to sell to raise cash, but all they do is squeal to the ACCC about foul play. The shareholders clearly don’t matter as they actually only account for about 7% anyway, the other 5 big airlines that own the other 93% are calling the shots. If that’s not a breach of ASX listing rules then I wonder what else they aren’t doing.

    Basket case, should be left to fail, with no bail out. Doomed the moment Borgetti tried to be a mini QF.

  • Agentgerko

    says:

    Ditch Tigerair. Its never made money, has a very poor reputation and is clearly no match for Jetstar.

    • James

      says:

      Again, how do you know it’s never made money.

      People need to stop throwing out ridiculous statements based on what they “think” or “hear”.

  • Peter

    says:

    I dread if Virgin Australia went under. QANTAS would have a field day increasing their prices ?

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