Virgin Atlantic to withdraw from Australia

4 Feb 2014 by Alex McWhirter

Virgin Atlantic will terminate its Sydney route with effect from May 5.

The carrier currently deploys an A340-600 on its daily London-Hong Kong-Sydney route.

The popular service linking London-Hong Kong will continue, only the onward flight from Hong Kong to Sydney will be discontinued.

In a statement to Business Traveller, Virgin Atlantic said: "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 and Hong Kong."

Craig Kreeger, the airline's CEO, 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 difficult times for the airline industry and as part of our strategy to operate more efficiently, we need to deploy our aircraft on routes with the right level of demand to be financially viable."

Virgin said its last flight departing Hong Kong for Sydney will be on May 4 with the final flight departing Sydney for London being the following day.

The viability or otherwise of direct flight airlines plying the kangaroo routes has been much discussed in our online forum.

But, basically, these very long flights are costly to operate because of poor utilisation and high staff overheads along the route.

Once Virgin quits the kangaroo route it will leave just British Airways and Qantas as the only two carriers plying directly between Europe and Australia.

There can be no doubt that Virgin Atlantic was forced to quit the kangaroo route because of ever tougher competition from both the Gulf and Asian indirect carriers.

And this competition, which drives down the cost of tickets (good for passengers, not good for airlines), is set to get fiercer still in the years ahead as rivals add more flights.

Alex McWhirter

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