Virgin Australia 3.0: Future direction announced by new CEO Jayne Hrdlicka
Well, they didn’t wait too long, did they. It had been rumoured that Virgin Australia would announce its new direction on the day that Bain Capital got the keys to the planes and lounges, and sure enough, here it is. All apparently crafted by CEO Jayne Hrdlicka’s, and other Virgin staff expertise and ‘detailed customer research’.
There are not too many surprises here – most lounges stay, economy catering is buy-on-board, Velocity scheme stays the same, and anything not nailed down is up for review.
“Today, we’ve announced a plan that will ultimately give our customers what they value without the big price tag: premium lounges, a new and fresh retail offering onboard, a choice of cabins, better digital technology and a more streamlined check-in experience. We will also continue to deliver our award-winning service, strong network of destinations, an award-winning frequent flyer program and a safe and reliable operation.”CEO Jayne Hrdlicka, Virgin Australia
It is interesting to note that the statement sees the airline maintaining its one third share of the domestic market – the same as it was pre-COVID, and pre-voluntary administration, despite its new mid-market focus.
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We already knew this, Virgin is going to target itself between the full-service of Qantas, and the budget carrier Jetstar:
“Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either. Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service. We will continue to evolve our offering for our customers based on data and feedback, but the Virgin Australia experience millions of travellers know and love is here to stay.”CEO Jayne Hrdlicka, Virgin Australia
Virgin will maintain three seat categories: Business, Economy-X and Economy.
They are going to review Business with a relaunch in 2021- although we don’t know when. Economy-X will maintain its extra legroom and dedicated overhead luggage space, but economy catering will be dropped and revert to a buy-on-board model from early 2021. Booooo! But you do get free tea, coffee and water. In-flight WiFi and Entertainment is ‘under review’, which I think means they will make you pay, unless that is a disincentive for ticket purchase. I’d go with a free for business and pay for economy model. Expect answers to this question in 2021.
They are ‘in’ for the new mid-market airline. Expect Adelaide, Brisbane, Gold Coast, Perth and Sydney to be open now or soon. Cairns, Darwin and Mackay lounges are dead to them. Canberra is hanging by a thread – or ‘under review’ as they say. Re-opened lounges will have COVID-safe protocols and offerings.
‘. . . will include fresh and pre-made food, including sweet and savoury snacks, sandwiches and fruit, along with barista-made coffee, juices and premium sparkling, wine and beer.’Virgin Australia Media Release, 18 November 2020
The Adelaide Lounge which was meant to open earlier this year, will now open in early 2021, acting as a prototype for future lounges.
At the Airport
By December 2021 expect hybrid check-in facilities like the mix of kiosks and assisted check-in counters already present in Melbourne and Perth. Lets hope that they deal with the chaos of Sydney check-in earlier rather than later!
Other bits and pieces
Velocity Frequent Flyer scheme will essentially be unchanged, but expect new partners in the future, and the scheme will retain 12 month extension of status granted earlier in 2020. The new management will work on upgrading the Virgin Australia mobile app, as well as other back of house technology.
Change fees will continue to be waived through until the end of January 2021, thus ensuring no penalty to flyers who need to change flights during the uncertainty of COVID-19 conditions. The airline is restructuring its regional and charter subsiduary Virgin Australia Regional Airlines based in Western Australia.
What they haven’t announced
We still don’t know the fate of the invitation only ‘The Club’ – the equivalent of the Qantas Chairman’s Lounge. We are still in the dark about Business in-flight catering, and the all important way they will segment their economy, and to a lesser extent their business product. Baggage included or not – for instance?
The aviation industry has a difficult road ahead when it comes to sustainability. It’s going to require a relative revolution in technology, with ‘electric planes’ or hydrogen planes, or some form of jet engine that doesn’t require a carbon based fuel. And that is going to require the development of an alternative to jet engines probably.
It’s a big ask. It will take time to develop.
This move to home grown and manufactured SAF is a first step – maybe even a baby step in a very long road of innovation. In the long run, US$200 million won’t even touch the sides.
Most of this had been predicted, and some, like the upgrading of lounges, technology and check-in improvements were probably on the cards prior to the sale of the airline.
I look forward to sampling their product in 2021, once a few of these promises are bedded down. Oh, what the hell, now that the lounges are back online, I might try them in 2020.
What did you say?