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Virgin Atlantic axes Sydney-Hong Kong flights

By David Flynn     Filed under: sydney, Hong Kong, Virgin Atlantic

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 weekVirgin 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.

Read: Virgin Australia cautious about new international routes

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."

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.

 

Have something to say? Post a comment now!

1 on 4/2/14 by chrisjrn

Well that was predictable.

I wonder if we'll be seeing Virgin Australia start operating on the Hong Kong route with their next A330?

1 on 4/2/14 by Hugo

If VS can't make it work, is there any reason why VA should? A bigger market presence in Australia, I guess. 

1 on 4/2/14 by chrisjrn

I think I read somewhere that the SYD-HKG service was VS's most successful code-share ever, so it sounds like VA shift at least a few seats for VS.

1 on 4/2/14 by watson374

I think VA can make it work based on a few things.

  1. Lower costs. I believe that VA should be able to run the SYD-HKG service with lower costs than VS, having crew based in Australia rather than far away. It also would use an A332, not an A346; this should be cheaper to operate and easier to fill up.
  2. Better feed. I believe that VA should be able to feed it better with more marketing, and if the initial route is successful it should be much easier for it to launch routes from other Australian ports. If they can snag a codeshare into China, Korea and Japan through HKG they would be onto a serious winner.
  3. Better scheduling. The rotation would only need one plane, but more importantly it could have more agreeable timings that treat HKG more as a destination than as a transit point.

I think it'll be sad to see it go, but if they can't make it work, they can't make it work.

1 on 5/2/14 by kash

its not possible for foreign airlines ot codeshare HKG- CHINA

else QF would not need Jetstar just codeshare with China eastern.

and almost every Dragonair flight would have had an MH/AA code.

1 on 5/2/14 by hutch

Correct about the codeshare. Not sure about QF needing JQ for HKG-China flights... pretty sure they also have Dragonair for that.

2 on 6/2/14 by Alvin

I wouldn't put an angled lie flat seat from HKG - LHR (which is currently equipped in most/all A330-200s on VA), especially when CX is running award winning seats on the same route. If a route had to be flown, try the 777-300ER.

1 on 6/2/14 by watson374

Only if they take the plunge and copy across the VS products.

2 on 4/2/14 by Ol647

Dammit!!! VS had some of the best reward flight options! 

1 on 5/2/14 by spinoza

Yes.. I have 80,000 points sitting in my account just for this flight. Hmm..

3 on 4/2/14 by hutch

Sad to see airlines go.

I wonder how long BA will keep the SYD-SIN route.

1 on 4/2/14 by AndrewYes

Not Very Long.

1 on 5/2/14 by eminere

I hope BA keeps that route for years to come!

2 on 7/2/14 by crosscourt

BINGO! BA have been cutting back and cutting back. I have been predicting for some time they will terminate in SIN. QF wont get the codeshare from SIN to Australia with BA, BA will send pax via HKG with CX.

4 on 4/2/14 by Ben84

Too many players with better prices and products on the SYD route.

1 on 5/2/14 by kash

more like 1 player that's pwning the competition- they even want to launch a 5th daily

1 on 5/2/14 by watson374

It's funny 'cause it's true.

5 on 4/2/14 by Richrrrd

Bugger - got a flight booked from SYD-LHR in June, used points to upgrade the return to J too, wonder how VS will approach that. Will be disappointed if they just refund my money and miles - it's been a nightmare trying to find a way of using them + the J product is very good IMO. Would be happy if they swapped me for an equivalent journey on Singapore Airlines or Etihad - guessing not though!

1 on 5/2/14 by Ol647

Would be interested to know what solution VS offers you. 

1 on 6/2/14 by Richrrrd

VS have just switched us to CX for the MEL-HKG and HKG-MEL. They have honoured the Points Upgrade to J - so rather than Upper on VS from HKG to SYD, its Business on CX.

I'm looking forward to checking out the CX J Product - never experienced it before

1 on 6/2/14 by JBH

I'd say that's a very good result, you'll be very pleased with CX J.

2 on 6/2/14 by spcb

How did you contact them? I've been trying their AU phone numbers, but none of them even ring. Left a message through their "contact us" on the website, but no response yet.

1 on 6/2/14 by cssaus

Call them on 9004 5549.

I rang quite early this morning and got straight through. The number put me straight through to a CSR at call centre in the UK, no waiting on hold.

Booking changes were handled very quickly and efficiiently. I was told I need to wait about 48 hours to have the new ticket emailed out to me.

2 on 6/2/14 by willygee

I too was just rebooked on CX. I asked about mile earning on CX and the fact I'd purchased one of their miles boosters for the entire SYD-HKH-LHR-HKG-SYD trip. Was advised to contact the customer services by email and the Reservations Agent seemed to indicate their may be scope to credit miles for the CS leg of the route despite them not being a partner.. shall wait and see..

1 on 17/2/14 by willygee

Virgin Atlantic have confirmed that mileage earning will be honoured on re-booked SYD-HKG with CX. I would imagine that the same would go for re-bookings on this leg with other airlines (regardless of partner status). I didn't ask about Tier Points but given their flexible stance on the mileage I would imagine they would honour the tier point earning also.

6 on 5/2/14 by eminere

Sad news. Wonder if using a more fuel-efficient aircraft would've made a difference to the commercial viability of the route.

7 on 5/2/14 by 180mis

As a frequent traveller on SYD-HK route - I am really gutted. I enjoyed travelling Upper Class with the very generous 3 pc checked bag limit (each up to 32kg)

Interestingly enough, over the last 12 months I have noticed all classes (including Upper class) being close to full or full.

Ho Hum.

8 on 5/2/14 by AD

Sad news! My boss flew VS a while back and reported that it was amazing. Was hoping to give them a try at some point.

9 on 5/2/14 by Merc25

I will be sorry to see VA go as they had a great service and one of the best FF award programs,

10 on 5/2/14 by mrp

I wonder if this will force VA to create a usable round the world fare program now out of their virtual alliance partners?

11 on 5/2/14 by moa999

It's funny.

So if Virgin Atlantic is saying more pax on the SYD-HKG service were travelling onto London, lets say half the plane.

Well if Virgin isn't flying them SYD-HKG then their HKG-LHR services are going to be very empty as well now.

1 on 6/2/14 by Radar

Not if they do a deal with CX to feed their flights.  The problem will be if you travel Sydney to HGK on CX why would you bother to book on VS. 

12 on 5/2/14 by TheRealBabushka

I'm going to be lynched for this but, what is so special about Sydney?

If an airline can't make it work for Sydney, they can't make it for the rest of the country?

How about HKG/MEL, HKG/PER or HKG/ADL?

I'm reading this in the context of Turkish cancelling their planned Australia flights. Seems to me that QR is quite sensible to head to MEL and PER instead.

 

1 on 7/2/14 by Longreach

Interesting three cities to select.

2 on 7/2/14 by Himeno

Why not CBR?

When CBR phase 3 opens, they'll have full customs/immigration set up.

13 on 5/2/14 by willygee

This is bitterly disapointing - I was looking forward to one day getting a HKG-MEL service on a Virgin Atlantic plane without the need to go through Sydney. As with some other people I'm booked on VS to fly out in June. One thing that did worry me in the email I received from VS Flying Club was a throwaway line indicating there may be an impact on the Flying Club program in Australia:

"We will update you on what this might mean for your existing Flying Club miles balance in due course, however in the meantime please continue to earn and spend miles as normal."

It made me wonder whether there is the possibility they will end up with a similar relationship with Velocity as British Airways Executive Club has with Qantas FF- with VS not allowing AU members, instead directing them to Velocity (or other partner FF program?

1 on 7/2/14 by willygee

Further to this, they've added new information to the announcment on their website"

"What would happen to Australian Flying Club members who have a balance of Flying Club miles?

We would encourage our Australian Flying Club members to continue earning and spending Flying Club miles as normal for now.  We would then contact those members with a further update, following the final decision on the intention to withdraw our operations."

Makes me think they really are considering pulling Flying Club out of Australia also... 

14 on 5/2/14 by cssaus

I can understand VS wanting to terminate the service because of what they believe to be economic reasons but I question the timing for when the service will cease.

I would have thought that they might have said the service would cease at the end of the European summer thereby catering for Australians travelling to London & onto Europe during this period. Last year during the same period I travelled on VS between HKG & SYD for my trip to Europe and the flights looked quite full to me.

This decision is certainly going to piss-off a lot of people who might have had mikes stored in their VS FF account. I wonder if AMEX will reconsider their partnership arrangement for points transfer to VS?

15 on 5/2/14 by Radar

In the very challenging operating conditions it was inevitable Virgin Atlantic would pull up stumps on this flight. While it is rumoured VA would like to stop the London to Hong Kong flight due to losses they are keen to offer the landing slot to Cathay Pacific. UK authorities may not be keen with Cathay already operating 5 daily services between the two ports.  If VA stay on the route they would be smart to do what BA did when Qantas dumped them for Emirates and enter into an alliance with Cathay Pacific to have CX carry their passengers on to Australia. CX have a very strong network of flights to all key destinations in Australia. It could be a win win for VA and CX.

16 on 5/2/14 by Dubya

I can see three possibilities here:

1. Virgin Australia use it's unallocated eighth A330 on the route

2. Cathay add a 5th service, the possibility of which has been discussed by CX management previously.

3. Emirates extend one of their DXB-HKG 777 services on to Sydney. EK already SYD-BKK, MEL-SIN and MEL-KUL onto DXB, so SYD-HKG probably isn't out of the question. An additional flight for the QF/EK alliance would likely benefit Qantas as it would provide more flexible travel frequencies, which is very very helpful at attracting business dollars.

@Radar: I doubt an alliance between CX and VS would come to fruition. If BA had half a brain that they would have incorporated an element of exclusivity into their agreement with CX for services between LHR-HKG and on to Australia.

1 on 5/2/14 by hutch

1. While a VA to HKG service is possible and it would be good to see, my gut says they won't as it'll cost them to establish a new route and they are bleeing cash (like QF).

2. CX don't have any more air rights to AUST main 4 airports - unless a bilateral agreement has been reached and I don't know about it.

3. Does EK have rights from HKG?

4. Agreed that VS looks partnerless from HKG.

2 on 6/2/14 by Radar

I guess time will tell but I note VS are rebooking quite a few of their pax onto CX services between Sydney and HGK. In relation to BA and their brain power they had little bargaining power and made the best if what was 'tough love' from Qantas. 

1 on 6/2/14 by willygee

I don't think the fact they're rebooking on CX can be taken as a sign of any potential partnership. When I was rebooked I was told they could only rebook on another airline on an identical route SYD-HKG. The options I was given were either CX or Qantas. 

3 on 6/2/14 by jamesanderson

Well, by extending EK's route from Hong Kong to Australian ports would be rather stupid. Indeed, if that was the case, passengers would have to do a stopover in Dubai, then Hong Kong before finally arriving at Sydney or Melbourne. 2 cities to stopover would increase the flight duration, which, in turn, would greatly reduce the attractiveness of these flights. 

1 on 6/2/14 by Dubya

By that logic EK would never have openned up MEL-SIN, MEL-KUL nor SYD-BKK. All of these services continue on to DXB. EK don't necessarily expect people to take these routes all the way to DXB- that's what the direct services are for. But if there is a case for a DXB-HKG service and a seperate case for SYD-HKG, then they may use their gigantic widebody fleet to extend the service from HKG-SYD. I'm certainly not saying that it will happen, but it could happen. It would also seal EK's place for travel between Australia and the four major Asian ports. Say all you want about how good EK's entertainment or service is, their advantage above all is connectivity and this adds another piece to the puzzle.  

1 on 7/2/14 by Brian

Agree totally - and I'm very happy to have those EK flights with the stopovers in KUL and SIN, because it's often much easier to get a miles upgrade to J on those flights than it is on the direct flight to DXB, even though the former ones use a 777 for the service.

4 on 9/2/14 by Alvin

1. Cathay already runs fully flat award winning beds in business class on the route, so if VA really starts this route they can't expect a full J cabin.

2. There is arguably enough traffic on this route run by Cathay alone, so starting a fifth flight would be a little too much.

3. That's a good theory, but if it stays a 777 I would avoid this route especially with the uncompetitive J and Y products. SYD - BKK and MEL - KUL are feasible because neither TG or MH (respectively) offer a better product (correct me if TG runs an A380 on that route). As for SIN - MEL, I'm not sure.

17 on 6/2/14 by Patrick

Saddened but not that much.  I flew with them up to Hong Kong to visit relatives and while the flight was decent and at one point better than Cathay and Qantas. it was not a universally happy experience. Anyway sad to see that another carrier is pulling out. I wander how it will affect the code share between VS and VA.

18 on 6/2/14 by jamesanderson

I think if VS had changed its schedules a bit, then it may have reduced the need to suspend the flights completely. At the moment, there is a 7 hour stopover/layover in Sydney, which can be very costly. 

1 on 6/2/14 by willygee

7 hour stopover in Sydney? Where are you transferring to?  

1 on 6/2/14 by jamesanderson

What I meant was it arrives Sydney at around 7am but doesn't leave for Hong Kong and London until 3: 45pm. 

1 on 7/2/14 by watson374

It can't leave any earlier because that would have it arrive in HKG too early to have a morning LHR arrival, but too late to arrive in LHR at night.

There are ways around it, though.

19 on 7/2/14 by Skippybear

I don't wonder VS are leaving the route. I flew on them once MCO/LGW on 747 supposedly 31" seatpitch. It was the most uncomfortable flight I have taken. 6 foot tall and 31" seatpitch doesn't work on an 8-hour flight let alone all the way to London. The A340-600 is not the right airfcraft for the route. As legacy carriers are quickly learning 2 engines (eg 777, A330) are cheaper to operate than 4 engines (747, A380, A340). In addition to cramped seating I found the inflight service to be indifferent and nothing to write home about. 

 

The premium product might be good, but the economy product gave economy new meaning.

1 on 2/3/14 by comcats2168

Virgin Atlantic really don't have any other aircraft that can do the job. Their B747s have way too much capacity, and their A333s don't have the legs to go all the way. The A343 is a slight possibility but with load factors seemingly high already with their current aircraft and worse economics per seat it isn't really much of an option.

20 on 7/2/14 by Alvin

What about Virgin Atlantic's 787 that was due to fly to Sydney?

1 on 3/3/14 by David

Errr, what about it? It's obviously not going to fly to Sydney, for starters!

21 on 26/4/14 by franz

This sucks.For Us South Australians It was the only service now that CX have switched to a four times a week nonstop ADL-HKG with a god awful schedule that didn't mean having to be at the airport for the connecting flight to Sydney before the sunrise like what QANTAS now subject us too.I have done the Adelaide-Sydney to Hong Kong in 2002 and while the timings were good it was the tight connection that we were disappointed in to make the outbound service.I was the one left holding the things while my father went to register his cameras with customs and had to get a new boarding pass done as we lost one during the wait.

 

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