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Sep 7, 2017

Virgin Australia reveals a little more of its Hong Kong and China strategy

Virgin Australia gets dailies to Hong Kong. But when will it score non-stops to cities in China?

Hong Kong is a vital preliminary to Virgin Australia securing non-stops into China

Virgin Australia has moved quickly to lift its new Melbourne-Hong Kong service from its initial five flights a week to daily from November 12, and reminded observers that there is likely to be much more to come in terms of its China related strategy.

The A330-200 flights will continue to leave Melbourne in the middle of the day and depart Hong Kong in the early to mid evenings, but you will have to visit its website to sort out the lack of uniformity in the exact times that apply to them on each day.

That said, the emphasis Virgin Australia has put on the amenity of its long haul business class, as well as full service economy with an option for extra legroom seating is seen within the travel trade as a major plus for competition on a route dominated by Cathay Pacific and Qantas.

Virgin Australia is some 40 percent owned by two China based enterprises, the HNA Group, and the Nanshan Group. The former owns Hainan Airlines and part owns Hong Kong Airlines and the low cost brand Hong Kong Express, while the latter owns the very small Qingdao Airlines operation, together with some other charter or specialist aviation businesses.

Hong Kong Airlines faces significant access problems to the Hong Kong-Australia market because of the historic dominance of Cathay Pacific and Qantas in the allocation of traffic rights up until the present. These matters are compounded by the chronic inability of Hong Kong to provide itself with an airport large enough to deal with global demand for access to the Special Administrative Region.

All of which makes Virgin Australia’s participation in the broader market for Hong Kong flights of obvious importance to its PRC investors. Hints about the need for traffic treaty ‘reforms’ between Australia and the SAR which is Hong Kong have filled the air for years.

One day, such reforms will happen. Virgin Australia and its China investment partners are ensuring they are in the strongest position that would be sensible before that day dawns. (And of course they are keen on the non-stop China-Australia possibilities as well.)

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8 comments

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8 thoughts on “Virgin Australia reveals a little more of its Hong Kong and China strategy

  1. Jacob HSR

    Hong Kong’s old airport at Kai Tak was quickly converted into a sea port. Does Hong Kong make more money from exporting shipping containers compared to exporting jet fuel and hotel rooms? No idea. Even if exporting airline food and blankets is more lucrative than exporting ship fuel, perhaps it is too dangerous to re-open the Kai Tak runway.

    Could China build a new airport on the mainland and a high speed railway from that airport to the existing HKG airport? Who controls the radar at HKG airport now? Who controls the ATC tower? The new mainland airport would have to be declared an extension of the SAR – where Western web pages are not blocked. “I am flying to Europe via the new manland airport but because it is the mainland, Facebook is blocked” – unless the new mainland airport is declared to be an extension of the SAR.

    1. Dan Dair

      This came up in another discussion on these pages;
      According to what was said, the SAR control their own airspace & HKG ATC.

      However, China controls all of the remainder of Chinese airspace & HKG have no input into the status of Chinese airspace availability.
      Anything into & out of HKG which doesn’t overfly Chinese airspace is wholly controlled by HKG ATC, & therefore entirely under the authority of the SAR.!

      1. Dan Dair

        I would have thought it reasonably plausible to build at least one more runway, in the bay directly East of Chep Lak Kok.
        It wouldn’t be cheap, but if building the airport itself was cost-effective, then presumably the further expansion into a third & possibly fourth runway/s, could be equally worthwhile.?

        I would suggest the runway/s would be parallel but offset from the existing ones. Effectively the two Southern runways would then be one landing, one taking off & the Northern runway could be used for either, responding to the particular pressure for departures or arrivals.? (or two Northern runways if that proved easier to construct.?)

        1. JW (aka James Wilson)

          Dan, they’re building a third runway and a new terminal to the north of the existing complex. The third runway will be parallel to the existing runways. The project requires the reclamation of an additional 650 hectares of land and the total cost is HK$141.5 billion (A$22.5 billion). It’s due for completion in 2023.

          1. Dan Dair

            JW,
            Obviously I didn’t know that.!
            I assumed that if they reclaimed the land to the East of the existing complex, it would be in shallower water & therefor easier & cheaper to do.

            ‘2023’ you say,
            to create an artificial island, build & runway & a whole new terminal on it & it costs $22.5 billion.
            Makes all the Badgery’s Creek plans look like bloody nonsense.?

          2. JW (aka James Wilson)

            Dan, I’m not sure which bay you’re referring to, but the following photo shows a view looking east from abeam the airport. The airport is out of view on the left. If that’s the area you’re suggesting, I’d suggest a third runway wouldn’t be possible due to the terrain and the high-rise apartment blocks in Tung Chung.
            https://cdn1.i-scmp.com/sites/default/files/styles/980×551/public/2014/06/13/hk_mtr_496385405_43380075.jpg?itok=J37jc0lm

            Yes, 2023 is the time frame they’re promoting. The construction of the original airport only took about 5½ years from the time the contracts were awarded. That work included flattening two islands, reclaiming 938 hectares of land, new expressway and railway links with associated bridges, tunnels and reclamation projects on Hong Kong island and Kowloon to support the new roads and railway. And it all opened the same day as the new airport. Overseas projects such as that makes our efforts here in Australia look somewhat pathetic!

          3. Jacob HSR

            James Wilson, that is a ton of money! Surely a high speed railway could be built between DXB airport and AUH airport for that price? Then they can act as 1 airport. There are cities that Etihad flies to that EK does not fly to.

            The railway could also serve the people that reside between the 2 airports.

  2. moa999

    The Guangzhou-Shenzhen-Hong Kong express rail link is well under construction (started 2010 and due to complete end-2018) and will deliver China rail passengers into Kowloon – only a 45min from Guangzhou South.
    This will open up Shenzhen Airport, and Guangzhou Baiyun Airport as potential options for travellers to Hong Kong.