Virgin Australia will end all flights to Hong Kong from next month, the airline announced yesterday.
Virgin currently operates daily Airbus A330 flights from both Melbourne and Sydney to Hong Kong. The airline already announced last year that it will end Melbourne-Hong Kong flights on 11 February – which happens to be next Tuesday – because the ongoing protests in Hong Kong had reduced demand and made the route unprofitable.
With the coronavirus crisis further reducing demand in the region, the Sydney-Hong Kong flight is also now on the chopping block. The Sydney-Hong Kong route will cease operating from 2 March 2020.
“Hong Kong has continued to be a challenging market. With a decline in demand following ongoing civil unrest, and growing concerns over the coronavirus outbreak in the wider region, we have made the decision to withdraw services,” Virgin Australia Group Chief Commercial Officer John MacLeod said.
Virgin has been struggling on the Hong Kong route for some time. In November 2019, the most recent month for which data is available, Virgin Australia filled an average of 66% of seats on its flights to and from Hong Kong. By comparison, Qantas filled 81% of seats and Cathay Pacific’s load factor was 82% in the same month. (This was before the coronavirus outbreak.)
“Current circumstances demonstrate that Hong Kong is no longer a commercially viable route for Virgin Australia to continue operating, however international tourism remains an important part of our strategy through our other international routes and partner airlines,” Mr MacLeod said.
Another factor working against Virgin Australia in Hong Kong would be the financial difficulties of its partner Hong Kong Airlines. Virgin has publicly said in the past that a significant proportion of passengers on its Hong Kong flights were connecting from mainland China on Hong Kong Airlines flights. Not only is the future of Hong Kong Airlines uncertain, but travel from China is also now being restricted due to the coronavirus scare.
Yesterday’s announcement is in stark contrast to Virgin’s bullish rhetoric on expansion into China just three years ago.
Last year, Virgin Australia launched a joint venture partnership with Virgin Atlantic to offer passengers one-stop services from Australia to London via Hong Kong under the Virgin brand. Passengers can still fly with Virgin Australia and Virgin Atlantic to London via Los Angeles, however this route is substantially longer than flying via Asia or the Middle East. Virgin Australia also offers connections to Europe through its partnerships with Singapore Airlines and Etihad Airways.
With Virgin’s withdrawal, Qantas and Cathay Pacific will resume their duopoly on flights between Australia and Hong Kong. In 2019, the Oneworld partners’ application to codeshare on each others’ flights between Australia and Hong Kong was rejected by the International Air Services Commission over concerns it would harm Virgin Australia’s ability to compete on the route.
Airfares to Hong Kong reduced significantly when Virgin launched its initial Melbourne-Hong Kong service in July 2017. (Sydney-Hong Kong was added in July 2018.)
In response to the announcement that Virgin Australia will withdraw from Hong Kong, the union representing Virgin pilots expressed concerns over the future of the airline’s Airbus A330 fleet.
However, Virgin has already announced that it will launch daily A330 flights from Brisbane to Tokyo on 29 March 2020 in partnership with All Nippon Airways. The loss of Hong Kong services could also free up another A330 aircraft for use on Virgin’s coast-to-coast routes between Perth and Sydney, Melbourne & Brisbane.
Virgin Australia will contact passengers with affected bookings (or their travel agents) by email. Passengers booked to travel until 30 April 2020 can be re-booked onto other flights at no cost. However, according to Virgin Australia’s Commercial Policy, passengers booked to travel to/from Hong Kong after 1 May 2020 will be offered only a refund.
Incidentally, if you do wish to travel on one of the final Virgin Australia services between Sydney and Hong Kong, some flights later this month currently have as many as five Business class reward seats available for booking.
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