News Article: Virgin Australia's Hong Kong struggle made tougher with more partner woes

[jakeseven7]

The near-collapse of Virgin Australia’s Hong Kong code-share partner has heightened the challenge for boss Paul Scurrah in making the loss-making destination profitable.

Virgin will end its Hong Kong to Melbourne service in March but will continue to fly Sydney to Hong Kong, which Virgin boss Paul Scurrah believes can become profitable.

Industry experts say that has become more difficult because of strife at its code-share partner Hong Kong Airlines, which narrowly avoided collapse last month. The airline is facing an uncertain future and is looking to cut jobs and routes.

Hong Kong Airlines is owned by the cash-strapped Chinese conglomerate HNA Group, which also owns a 20 per cent stake in Virgin Australia.

Airline Intelligence and Research chief executive Tony Webber estimated about 15 per cent of Virgin's Hong Kong traffic would come from code-share passengers, based on industry trends. He said its partner's troubles created "big issues" for Virgin's remaining Hong Kong service.

“Demand on Sydney-Hong Kong direct will be absolutely savaged at the moment - so that by itself is going to devastate that route," he said. "Putting on top of that the Hong Kong Airlines issues, they would almost be terminating that service."

Mr Yong said HNA would probably want to sell Hong Kong Airlines, but that it was unlikely anyone would want to buy it given the challenges the local industry is facing. HNA has also been looking to offload its stake in Virgin.


FULL ARTICLE:

Virgin Australia's Hong Kong struggle made tougher with partner woes

Virgin Australia's loss-making Hong Kong services have been further strained by the near-collapse of its local code-share partner Hong Kong Airlines.

www.smh.com.au

 

[jase05]

HKG isn’t looking great for anyone currently unfortunately. The only hope VA have of salvaging HKG is if they can work better connection times with VS IMO.
If something drastic doesn’t happen then PS might have to seriously reconsider HKG

 

[HS-TQE]

One of the few suggestions is for VS and VA to renegotiate their landing slots for their LHR-HKG and HKG-SYD flights respectively.

There will be a few landing slots at HKG opening up due to the political/economic situation (possibly more pending on HX's collapse) to ensure the connection time is reasonable (e.g within 2-3 hours).

 

[ozstamps]

Been a dog route since inception. BEFORE the ongoing political upheavel there

Took a few biz flights there on Virgin as there were deals, and even did one RT there on HK Airlines from OOL and Cairns (who were hopeless!) when the Biz fares were half from ADL than from SYD or MEL for some reason (despite transitting SYD and MEL each way!) Very light loads on all our flights.

ALL tourist pax traffic to and from HK has divebombed BADLY past year, and Cathay is hurting bad, so no hope for Virgin.

Not a good choice from Day #1, and with the riots and partner having planes seized on tarmacs etc, a poison route.

 

[jakeseven7]

Been a dog route since inception. BEFORE the ongoing political upheavel there

Took a few biz flights there on Virgin as there were deals, and even did one RT there on HK Airlines from OOL and Cairns (who were hopeless!) when the Biz fares were half from ADL than from SYD or MEL for some reason (despite transitting SYD and MEL each way!) Very light loads on all our flights.

ALL tourist pax traffic to and from HK has divebombed BADLY past year, and Cathay is hurting bad, so no hope for Virgin.

Not a good choice from Day #1, and with the riots and partner having planes seized on tarmacs etc, a poison route.

Suspect it will be dialed back even further soon, in addition to the cancellation of their MEL-HKG service.

Many corporates still have bans on HKG even as a TRANSIT point let alone a destination.

 

[Isochronous]

Been a dog route since inception. BEFORE the ongoing political upheavel there

Took a few biz flights there on Virgin as there were deals, and even did one RT there on HK Airlines from OOL and Cairns (who were hopeless!) when the Biz fares were half from ADL than from SYD or MEL for some reason (despite transitting SYD and MEL each way!) Very light loads on all our flights.

ALL tourist pax traffic to and from HK has divebombed BADLY past year, and Cathay is hurting bad, so no hope for Virgin.

Not a good choice from Day #1, and with the riots chemical warfare by police and partner having planes seized on tarmacs etc, a poison route.

Correction.

 

[dajop]

One of the few suggestions is for VS and VA to renegotiate their landing slots for their LHR-HKG and HKG-SYD flights respectively.

There will be a few landing slots at HKG opening up due to the political/economic situation (possibly more pending on HX's collapse) to ensure the connection time is reasonable (e.g within 2-3 hours).

The difficulty is the curfew at LHR. The earliest VS can leave HKG for LHR is probably current schedule - around midnight (an hour earlier during northern summer) as it arrives into LHR at 4:50am. At the other end of the day VS probably can't leave LHR any later than around 10pm, which gets to HKG at 6pm. A short connection in one direction leaves a long connection in the other. During northern winter, assuming VA needs 1.5 hrs to turnaround the aircraft, the best would be 3:45 in both directions (that is an arrival from SYD at 8:15pm, which turns around to leave at 9:45pm). Could of course avoid LHR curfew issues by doing HKG-SYD and HKG-LHR during day, but these timings typically have lower demand than the overnight flights on these sectors, and reduce the opportunity for connections from China to SYD on VA.

This aside, is a connection with VS going to help? There are a lot of airlines competing from SYD to LHR already....

 

[Must...Fly!]

I noticed that SYD-HKG was 6x weekly on some weeks around April