Virgin Atlantic to quit Sydney-Hong Kong from May
Virgin Australia loyalty program members will lose the benefits of flying to Hong Kong on Virgin Atlantic from Sydney from early May, after the competitive heat proved too much for the UK carrier.
This is the statement from Virgin Atlantic, Tuesday night Australian time:
Virgin Atlantic has announced its intention to withdraw operations between Sydney and Hong Kong from 5th May 2014.
Increasing costs and a challenging economic environment have affected revenues and the route is no longer considered profitable. Virgin Atlantic will continue to operate services between London Heathrow and Hong Kong.
This decision will affect some staff based in Sydney and Hong Kong. A consultation period has commenced with all employees likely to be affected.
Craig Kreeger, Chief Executive at Virgin Atlantic said, “Unfortunately we intend to withdraw our services between Sydney and Hong Kong. Despite the best efforts of our employees, external factors such as increasing costs and a weakening Australian dollar have affected our profitability.
“These are still difficult times for the airline industry and as part of our strategy to operate more efficiently, we need to deploy our aircraft to routes with the right level of demand to be financially viable.”
It is Virgin Atlantic’s intention that the last flight departing Sydney to Hong Kong will be on 5 May 2014 and the last flight departing Hong Kong to Sydney will be on 4 May 2014. Up to that date, Virgin Atlantic will continue to operate its published schedule and customers can be confident booking flights for travel prior to then.
The winners from Virgin Atlantic’s capitulation are Cathay Pacific, by a large margin, followed by Qantas, as well as arch foe British Airways, in so far as its code sharing with Cathay Pacific to provide an alternative route to London from Australia is concerned.
The dropping of Hong Kong again points to a lack of convenient links to northern China, as well as to the SAR for Virgin Australia.
Virgin Atlantic is 51% owned by Richard Branson’s family company, and 49% by US carrier Delta, which is in a trans Pacific alliance with Virgin Australia.