Virgin Atlantic will axe its Sydney-Hong Kong flights from May 5 and exit the Australian market, unable to compete against incumbents Qantas and Cathay Pacific.
According to a statement issued by the Richard Branson-backed airline "the route is no longer considered profitable" due to "increasing costs and a challenging economic environment."
However, Virgin Atlantic will continue to operate a daily service between London's Heathrow Airport and Hong Kong.
Virgin Atlantic CEO Craig Kreeger said that "external factors such as increasing costs and a weakening Australian dollar have affected our profitability" on the route.
“These are still difficult times for the airline industry and as part of our strategy to operate more efficiently, we need to deploy our aircraft to routes with the right level of demand to be financially viable.”
Virgin's competitors on the Sydney-Hong Kong route are Cathay Pacific, which operates four flights a day, plus a single Qantas service which was recently upgraded to an Airbus A380 every day from January to March.
The last Virgin Atlantic flight from Hong Kong to Sydney will be on May 4, with the final Sydney departure the following day.
Virgin Atlantic says that passengers booked for travel between Sydney and Hong Kong after May 5 will be rebooked on alternative airlines, while "passengers requiring a refund should go back to their travel agent/provider."
For more details visit Virgin Atlantic or contact their Sydney office on + 61 2 9004 5549.
From one Virgin to another?
Virgin's withdrawal will no doubt spur speculation that Virgin Australia will take over the Sydney-Hong Kong route using one if its Airbus A330s, which are configured for medium-range international flights as well as the domestic east-west services they currently ply.
However, as Australian Business Traveller reported earlier this week, Virgin Australia says it won't rush into adding international routes to its map.
Virgin's chief commercial officer Judith Crompton says a new international destination would need to be "extremely commercially viable", compared to the efficiencies offered by using partner airlines such as Air New Zealand, Delta, Etihad and Singapore Airlines.
High hopes a decade ago...
Virgin Atlantic began flying to Sydney in December 2004 and as recently as July last year said it was considering introducing flights from Melbourne to Hong Kong or adding a second daily service from Sydney.
"Melbourne is definitely a good option" suggested Virgin Atlantic's General Manager Australia, Luke Fisher, "or whether we consolidate with our Sydney focus and move to a second operation, it is really a 50-50 consideration."
Virgin Atlantic reported an uptick in travel from Australia to the UK on the back of the Qantas-Emirates alliance.
While Virgin Atlantic travellers out of Sydney were once evenly distributed between those who hopped off at Hong Kong and those who continued to London, Fisher reported that "now there is more London than Hong Kong. And I think that is a direct result of the changes that Qantas and Emirates have made."
"There are still people that prefer Hong Kong as a stopover or transit point" Fisher continued, drawing a contrast against Qantas' shift from Singapore to Dubai as the pivot point for its European flights.
"We have seen a transition that more people, when they are going to the UK, would prefer to go this way, whether they are stopping over in Hong Kong or going direct."
A survey conducted by Qantas in March last year saw Hong Kong rated just behind Dubai and Singapore as the most popular transit point or stopover city for flights between Australia and Europe.
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About David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.