Jury’s out on Virgin’s mid-market plan, says TWU

written by Adam Thorn | February 24, 2021

The TWU’s national secretary, Michael Kaine, has told the Australian Aviation Podcast that the “jury is still out” on Virgin’s plan to become a hybrid carrier.

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“Virgin needs to get better at articulating what the hell mid-market means,” said Kaine. “Because it’s a source of great concern to the workforce that that’s not able to be done.”

The influential industry figure was speaking to host Adam Thorn on the episode that is set to go live on Thursday.

The airline has been adamant since it emerged from administration that it will not return to its Virgin Blue budget routes, but there has been concerns as to whether it could make the strategy successful after the exit of its architect, former CEO Paul Scurrah.

Kaine reiterated that he believes Virgin’s intentions are genuine but hinted more work needs to be done to make it a success.

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“There’s one thing crazier than having a full-throttled go at Qantas at the very, very top of the market, it’s thinking that you’re going to beat them at the bottom of the market,” Kaine said.

“Yes, you need to hit the sweet spot in the middle. But the sweet spot in the middle means that you still have to have an offering that is attractive to the Australian leisure and business markets.

“They want lounges, a good frequent flyer system, a system of points that connects beautifully with international travel when that’s available again. And they want the capacity to travel regionally.

“And if Virgin wants political support in its endeavour to become a really, really vital airline in Australia, again, it needs to make sure that it hits all of those marks.

“This all means that mid-market means something more than kind of hedging your bets. You’ve got to be viable, and at the moment, the jury’s still out I think on that point.”

Former chief executive Scurrah’s surprise exit in November 2020 was significant because he was synonymous with the airline’s plan to operate as a mid-market ‘hybrid’.

However, his replacement Jayne Hrdlicka has also been adamant the business will continue down the same path, despite it reducing its 737 fleet from 85 to 56.

“Australia already has a low-cost carrier and a traditional full-service airline, and we won’t be either,” said Hrdlicka on her first day.

“Today, we’ve announced a plan that will ultimately give our customers what they value without the big price tag: premium lounges, a new and fresh retail offering onboard, a choice of cabins, better digital technology and a more streamlined check-in experience.”

The airline also reaffirmed its plans to operate a domestic lounge network that includes Melbourne, Sydney, Brisbane, Adelaide, Perth and the Gold Coast.

On Tuesday, it even unveiled its ‘lounge of the future’ in Adelaide, which features breeze block feature wall, canopy ceilings, large light-filled spaces and sustainable furniture.

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2 Comments

  • Nate

    says:

    The ‘jury’s out’ actually on the TWU.
    How many 100’s of their members’ have deserted them?
    How many 1000’s $$$$ of Members’ funds have they lost in court cases against QANTAS, with yet another in April? More waste.
    It’s amazing there’re any members’ left in such a useless union.

  • Steve A

    says:

    Everyone knows that I am not a Joycite, and I have criticized him constantly for his wasting of billions of dollars of shareholders’ cash on everything from his premium-only Asian airline to his Asian Jetstar franchises, of which only two are in existence still.
    But, despite this, QF isn’t about to be beaten by any strategies that either Rex or Virgin have in mind.
    QF is much, much more than just a few B737s on the golden triangle. It could be much, much more than it is of course, but QF management don’t need to be very smart to beat Rex and Virgin if what they are putting up as credible competition is all that they have up their sleeves.
    QF gets nearly $10 million a week from its loyalty program alone. So competing with Qantas and staying solvent while doing it requires a very different approach from what both Rex and Virgin are doing.
    That is why Alan Joyce can confidently say that QF will boost its share of the market. Because what is being done by Rex and Virgin will only dent the sides of QF.
    If either want a very different approach then they should come and see me and I will show them how.

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