Virgin Australia has announced a significant shift back towards budget travel by offering a new cheap ticket that doesn’t include a baggage allowance.
New Economy Lite fares will start from just $59 one-way between Sydney and Byron Bay, putting it on a par with low-cost rival Jetstar.
It comes despite Jayne Hrdlicka repeatedly insisting that the airline would pursue a hybrid strategy that would see it sit in between rivals Qantas and Jetstar, and the closure of its previous low-cost subsidiary, Tigerair. However, the airline will still offer economy seats with baggage on ‘Economy Choice’ and ‘Economy Flex’ as well as business-class options.
According to Virgin, while every ticket lets customers earn Velocity Frequent Flyer points and Status Credits, it appears Economy Lite will include fewer of both.
The airline said almost one in three customers don’t require check-in baggage on domestic routes, with this number increasing on the country’s busiest Golden Triangle routes between Melbourne, Sydney and Brisbane.
“Every customer is unique and has different needs and budgets, and we want to welcome all of them onboard to experience our award-winning service, in the way that best suits them,” a Virgin spokesperson said.
On top of the three-tier economy booking system, Virgin will also continue to offer Economy X and business class fares.
On her first day on the job, Virgin chief executive Jayne Hrdlicka doubled-down on the reborn airline’s plans not to regress to a budget airline like its predecessor Virgin Blue.
“Australia already has a low-cost carrier and a traditional full-service airline, and we won’t be either,” said Hrdlicka. “Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service.”
“The travel environment is changing and so are our customers’ preferences,” she added.
“We know that leisure travellers, small and medium businesses, and many corporates are now emerging from COVID-19 wanting better value. They are hungry for flexibility and choice, a trusted brand that resonates with their values, and great prices, along with the premium features they value most.”
The airline has already scrapped its complimentary services for economy domestic passengers, now offering only tea coffee and water to economy customers, and also undertook an “end-to-end” review of its business class offering.
Despite the review, to date the airline has appeared to remain committed to its business class offering, and has recently announced the re-opening of some of its premium lounges in key markets.
Earlier this year, TWU national secretary Michael Kaine told the Australian Aviation Podcast that the “jury is still out” on Virgin’s plan to become a hybrid carrier.
“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.”
“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.”