Virgin to play its part in making travel ‘irresistible’ again
Having emerged from voluntary administration in 2020 under new managers Bain Capital, Virgin Australia is now revving its engines in preparation for the country’s return to travel. The airline’s CEO, Jayne Hrdlicka, spoke to James Kavanagh, Managing Director Australia for Flight Centre Travel Group, at the recent Illuminate virtual conference.
James: A lot has changed for Virgin Australia, what has the past 18 months been like and how is the airline being repositioned?
Jayne: “It has been an interesting Covid journey. We have used the opportunity to step back, reflect on who we are, transform the cost base and focus on the things that matter to guests the most, which is value and choice. We have redesigned pretty much every aspect of our go-to-market model to make sure we deliver on that.
James: What are the plans for Virgin Australia’s scheduling and capacity?
Jayne: “You will have seen us adding lots of flights in markets that are open, so we are flying between South Australia, Tasmania, Queensland, Western Australia and the Northern Territory more than we have done in our history. We have added 12 new routes to make it possible to ensure people who can fly, can do that with a direct service, with great value and enjoy the special Virgin flair.
“We are now planning … a day-by-day adjustment to make sure we have the right capacity against the network at the right time. We know we will have more businesses coming back and flying, and we're really looking forward to bringing you all back. We know the network will need to continue to adjust as the demand builds.
What you will see already is a very strong schedule serving the triangle of Brisbane, Sydney and Melbourne and that will remain. We’ll be ensuring we have the right frequencies to serve the demand and that the schedule is nice and robust if you are travelling for work.”
James: What are Virgin Australia’s plans for international flights?
Jayne: “We've already started with New Zealand, and Fiji flights will start in the middle of December and we're also looking to add Bali to that mix. We will bring forward as much as we can within the bounds of what we are able to scale up within that timeframe. For international more broadly we will continue to add capacity to New Zealand, and once that opens up, we'll include more short-haul markets and then look at what we can do with long-haul in the coming months.”
James: What are your thoughts on airfare pricing?
Jayne: “Fuel prices are going up, so that will put a limit on what prices can be. I think customers will enjoy a price reduction on tickets in the next six months. We have a real responsibility as an industry to make sure that [travel] is irresistible, absolutely irresistible, so we can start pumping up the tyres of the people who have done it really tough over the last 12 – 18 months.
There are a lot of small- and medium-size businesses out there who are desperate to get people flying around the country again. We have an important role in making that happen and keeping fares nice and low is a big piece of the puzzle.”
James: What are some of the changes that your corporate customers are looking for now and what were some of the changes for Virgin when the airline was assessing how it contracted with customers?
Jayne: “What we did is put ourselves in your shoes and looked at the way things worked. It was super-complicated. The fares were high and the discounts were big, so the net fares were relatively reasonable. And then if you were travelling for leisure, the fares were high, and you couldn’t access your corporate account benefits. So, none of it really made sense. We were creating an artificially high price structure for the benefit of people thinking they were getting a big discount.
We thought … let's create a meaningful discount structure but let's do it off pragmatic, value-driven fares and give all our corporate accounts, small, medium and large, the benefits of great value, every single day.”
James: What can customers expect from Virgin when they start flying again?
Jayne: “Most important is to remember what is not changing. That is our people. They are so passionate, dedicated, loyal and hungry to get you back in the air and see your smiling faces again.
“Our aim is to make sure we continue to deliver an authentic exceptional service, that is at the core of everything. And on top of that, our lounges are being refreshed, we’re investing in technology such as your Wi-Fi experience in the airports, we’re working on getting our meal services back in a really good position and ensuring the Velocity program is better than it has ever been.
“The whole [Virgin Australia] ecosystem is just bubbling with energy, to surprise and delight, and make sure you have an awesome experience every time you engage with us.
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