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Qantas boss Alan Joyce predicts Virgin and Rex won’t both survive post-pandemic battle


Qantas boss Alan Joyce says Australia still only has room for two major airline groups and it is unlikely both Virgin Australia and new rival Regional Express (Rex) will survive the post-pandemic aviation dogfight.

Mr Joyce said in an interview on Wednesday that country airline Rex launching flights between Sydney and Melbourne in March would spark fierce competition on the busy route.

Rex will start Sydney-Melbourne services in March.

Rex will start Sydney-Melbourne services in March. Credit:Robert Pearce

“My personal view is that this market has never sustained three airline groups and it probably won’t into the future,” he told an online event hosted by Reuters.

“You can be guaranteed that Qantas will be one of them – it’s who else is going to be in the market place post this and into the future is going to be interesting.”



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Australian News

Woman flies into Queensland on Virgin flight before testing positive


Queensland health authorities have added a number of venues to a contact tracing alert after a woman infected with coronavirus travelled into the state from Sydney.

The patient, in her 50s, linked to the cluster on Sydney’s northern beaches was infected when she flew into Brisbane on Virgin flight VA925 landing about 9.30am on Wednesday.

Queensland Health has now issued new alerts about places the woman visited across Brisbane and the Sunshine Coast.

The woman is said to have visited these places on Wednesday December 16:

  • Virgin flight VA925, Sydney to Brisbane – Arrival time 9.00am/9.30am
  • Brisbane Domestic Airport, Brisbane City – 9.00am/09.30am to 09.54am
  • Hertz Car Rental, 1980 Sandgate Road, Boondall – 10.00am (Exchanged vehicle at 10.15am) to 10.30am
  • The Glen Hotel, Eight Mile Plains – 11:00am to 2.30pm (Any patrons after 2:30pm should continue to monitor for symptoms and get tested if any develop)
  • Sunshine Coast University Hospital, Birtinya – 5pm to 8.30pm
  • Kawana Waters Nightcap Hotel, Buddina – 9.00pm to 7.00am the following day
  • Hungry Jacks, Kawana Waters – 8.00pm to 10.00pm

She also visited these places on Thursday December 17:

  • Hertz Car Rental, 1980 Sandgate Road, Boondall – 8.30am (Exchanged vehicle at 8.55am) to 9.00am
  • The Prince Charles Hospital Fever Clinic, Chermside – 10.19am to 10.26am
  • Coles Express, Mooloolaba – 7.00am to 7.30am

The woman travelled to the Sunshine Coast from Brisbane and stayed overnight at a hotel before returning to Brisbane on December 17 to get a test at Prince Charles Hospital after a friend notified her of the outbreak in Sydney.

The woman was considered to be infectious in Queensland for two days but is now self-isolating back on Sydney’s northern beaches after driving home following her test which came back positive on Thursday night.

Queensland chief health officer Dr Jeannette Young said the woman had been an “excellent individual” who left the state straight after her test.

“She got a hire car and drove straight down to Sydney,” she said.

“She did stop along the way but again she managed her interactions.”

Dr Young said the woman “didn’t realise” she was a risk during her stay in Queensland and she was “confident” that Queensland Health would track down all potential contacts.

She is now asking anyone who was sitting near the woman on the Virgin flight to get tested immediately and quarantine for 14 days.

“Passengers on flight VA925 on 16 December seated in rows 7, 8, 9, 10 or 11 are required to get tested and quarantine for 14 days from Wednesday 16 December,” she said in a statement.

“If you were in one of those rows, you should be contacted directly by our contact tracers. Alternatively, these passengers can contact 13HEALTH.

“While the risk is low, I’m also asking all other passengers from flight VA925 on 16 December to remain vigilant and if you develop any symptoms to get tested.

“Similarly, any close contacts who dined at the Glen Hotel in Eight Mile Plains on 16 December will be contacted directly by our contact tracers.

“However, I am also asking anyone else who was at the Glen Hotel on 16 December after 11.30am to be vigilant and if you develop any symptoms to get tested immediately.”

The northern beaches has been declared a hotspot in Queensland and any resident who travels to the state from Saturday will need to quarantine for 14 days in a government hotel.

NSW Health said in a statement on Friday woman’s case was one of two fresh diagnoses under “urgent investigation”.

NSW’s chief health officer Dr Kerry Chant told media in Sydney the woman attended Avalon RSL on December 11 and left the state not knowing about the virus outbreak that had flowed from the venue.

The number of cases linked to the RSL club and the Avalon Bowling Club now stands at 28, with 15 cases of community transmission recorded in the last 24 hours.

“That individual was identified through our contact tracing efforts in NSW and we contacted that individual and that individual had already departed and was in Queensland at the time,” Dr Chant said.

“We advised them to isolate and get a test. They then contacted the Queensland officials prior to the test result coming back and were advised about safe transport back to NSW so they drove their own car and made their way back here and during that journey, they received a positive test result.”



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Australian News

Coronavirus borders: Qantas, Virgin flight changes


Australia’s major airlines are scrambling to adjust their schedules as passenger change fights amid a coronavirus outbreak that has Sydney’s Northern Beaches region exiled from many parts of the nation.

So far 28 cases have been detected across Sydney’s Northern Beaches with NSW Premier Gladys Berejiklian telling residents on Friday to brace themselves for the number of COVID-19 diagnoses to increase.

Queensland has declared Sydney’s Northern Beaches a hotspot while WA has implemented self-quarantine measures for NSW arrivals. Victoria has also reintroduced a permit system for NSW travellers, and said northern beaches residents and visitors would not be eligible.

A Qantas representative said they will be contacting passengers affected by the border changes although they are already being inundated with calls.

They have asked passengers to not contact their call centre which is being placed under pressure.

“We are seeing a high level of inquiry from customers in Sydney looking to change their travel plans, so we’d ask anyone not travelling in the next 14 days to please avoid calling our contact centre to help us manage these volumes,” they said.

“Customers can manage their booking directly via qantas.com and jetstar.com or via the Qantas app.”

Virgin Australia has already started making changes to its schedule as it meets the demand of those wanting to return from Sydney to avoid quarantine.

A Virgin Australia spokesman said their scheduling changes would be flexible to deal with passengers, either wanting leave Sydney or return from interstate.

“While New South Wales services are currently operating as normal, changes to customer demand and booking trends may require us to adjust our forward schedule,” the spokesman said.

“Any impacted customers will be provided with options to re-book on alternative services or be able obtain a travel credit for use at a later stage.”

One new case in Queensland involved a woman from Sydney’s Northern Beaches, said Queensland Premier Annastacia Palaszczuk.

“We are on high alert,” she told reporters on Friday.

Queensland chief health officer Jeannette Young has instructed any Queenslanders who had been to the Northern Beaches since December 11 to isolate at home for 14 days and come forward for testing.

“From midday tomorrow, anyone who has been in the Northern Beaches region in NSW since December 11 2020 will not be able to visit Queensland residential aged care centres, hospitals or correctional facilities,” Dr Young said.



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Virgin Australia renegotiates deal with Boeing for new 737 MAX aircraft


Virgin Australia has revealed it has renegotiated a multi-billion-dollar deal with plane manufacturer Boeing for its order of the grounded 737 MAX aircraft.

In a statement on Wednesday, the embattled airline said it had halved its original purchase, slashing its plane order from 48 to 25.

Virgin initially signed the contract for 25 B737 MAX 10 and B737 MAX 8 aircraft prior to the coronavirus pandemic, but due to its financial turmoil sparked by the health crisis, the major airline decided to scale back and only purchase the larger planes.

Virgin Australia chief executive Jayne Hrdlicka said the restructured agreement would enable the airline to be more flexible as the industry emerges from the 2020 mass grounding caused by COVID-19 travel restrictions.

“We have already moved to simplify our main line fleet and committed to the Boeing 737 aircraft as the backbone of our future domestic and short-haul international operations,” Ms Hrdlicka said.

“The restructured agreement and changes to the delivery schedule of the Boeing 737 MAX 10 gives us the flexibility to continually review our future fleet requirements, particularly as we wait for international travel demand to return.”

The B737 MAX 10 will be used on major domestic routes and short-haul international flights.

Boeing’s 737 MAX fleet has only recently been recertified to fly by the US Federal Aviation Administration after a technical malfunction caused two planes to crash in the past two years.

All models were grounded globally in 2019 after a MAX 8 plane flown by Ethiopian Airlines crashed and killed 157 people. Indonesian airline LionAir also had one of its MAX 8 planes crash into the sea in October 2018, killing 189 passengers.

The Civil Aviation Safety Authority is yet to approve the planes for operation in Australia.

Virgin’s order of MAX 10s is expected to arrive in mid-2023.

“The MAX 10 will allow us to build on the operational flexibility we have been able to achieve with our existing fleet throughout administration to ensure we remain competitive on the other side of COVID-19,” Ms Hrdlicka said.



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Business

Virgin cuts, delays Boeing 737 MAX order as grounded jet returns to skies


“The MAX 10 will allow us to build on the operational flexibility we have been able to achieve with our existing fleet… to ensure we remain competitive on the other side of COVID-19,” Virgin chief executive Jayne Hrdlicka said.

“The restructured agreement and changes to the delivery schedule… gives us the flexibility to continually review our future fleet requirements, particularly as we wait for international travel demand to return.”

Virgin, which went into voluntary administration in April and is now owned by US private equity giant Bain Capital, has stripped its domestic fleet back from around 80 jets to just 56 older variant 737s and also shut down its long-haul operations.

The new 737 MAX order could be used to grow Virgin’s fleet or to replace existing planes as their leases expire. Boeing’s 737 MAX planes – an updated model of the world’s most common aircraft – started flying in 2017 but the newer MAX 10 variant, which can carry up to 230 passengers compared to 176 on Virgin’s existing workhorse 737s, is yet to enter service.

Ms Hrdlicka said Virgin would deploy the larger capacity jets on busy domestic and short-haul international routes or where there is a shortage of airport slots.

All 737 MAX models were grounded globally in March last year when a MAX 8 aircraft flown by Ethiopian Airlines crashed killing 157 people, coming after the same type of aircraft flown by Indonesian carrier Lion Air went down in October 2018, killing 189 people.

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Virgin said that it remained confident that the MAX would be cleared for service by 2023 in light of the US Federal Aviation Administration’s re-certification of the aircraft last month.

“With support from Boeing, any new aircraft will undergo careful evaluation to ensure we are comfortable with it prior to entering service,” Ms Hrdlicka said.

“We will also continue to invest in capability that delivers a safe and efficient aircraft operation, and one that ensures safety remains our top priority.”

American Airlines is set to become the first airline to resume passenger flights with MAX aircraft, beginning on December 29.

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Australian News

Virgin Australia to add 78,000 seats per week


Virgin Australia is expecting close to 80,000 additional seats will be added to its east coast flight routes by January 2021.

As Queensland opens its borders to Victoria and Sydney on Tuesday, the country’s second airline carrier says it is anticipating an extra 78,000 seats per week will be available on flights between the three major eastern capital cities.

With coronavirus restrictions easing across most of the nation, Virgin said it believes its capacity will be at 60 per cent of pre-pandemic levels.

It also noted on Tuesday flights from Victoria and NSW to Queensland are at near capacity, with high demand stretching through for the rest of the month.

Virgin Australia chief executive Jayne Hrdlicka said the decision by the Queensland government to open borders will mean families will be able to reunite for the holiday season.

“We’re seeing strong demand throughout December across all of our Queensland services from Victoria and New South Wales, so we know many Australians have been itching to visit Queensland to reunite with their loved-ones or do business,” Ms Hrdlicka said.

“The broader economic contribution that open borders will bring cannot be underestimated in what has been the most difficult year for many businesses, particularly in the tourism and hospitality industries.”

Known as the Golden Triangle, the Brisbane — Sydney — Melbourne flight corridor is one of the busiest flight routes in the world.

Virgin said it will reopen its Sydney and Melbourne lounges on December 15 and will also offer flexible bookings until March 31 because of the pandemic.

“We have always advocated for the safe reopening of borders and we thank the Queensland Government for their actions in helping to reconnect the nation ahead of Christmas,” Ms Hrdlicka said.



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Business

Virgin Australia’s Paul Scurrah to depart


Bain confirmed it will replace him with Ms Hrdlicka, who was a Bain executive prior to joining the Qantas group in 2010 and advised the private equity firm on its bid for Virgin.

We need a hands-on CEO with deep aviation, commercial, operational and transformation experience. Jayne is the right person to take the business forward.

Bain Capital boss Mike Murphy

Mr Scurrah’s departure was imminent on Wednesday afternoon, as revealed by The Sydney Morning Herald and The Age, with sources saying he was locked in a meeting with Bain negotiating his exit.

Mr Scurrah joined Virgin in early 2019 and was engineering a turnaround plan to improve the airline’s poor financial performance when the COVID-19 pandemic forced it to ground its fleet and pushed it into insolvency owing $6.8 billion.

He said it had been a “great privilege” to lead the airline for the past 18 months, even through “the most challenging time in aviation history”.

Jayne Hrdlicka will be Virgin's next CEO.

Jayne Hrdlicka will be Virgin’s next CEO.Credit:Chris McKeen

“I have continued to be so proud of the way my team and our entire organisation has fought to save this airline and to keep competition alive and well in Australia,” Mr Scurrah said in a statement on Thursday.

“We have succeeded in not just ensuring the future of the company, but also reset the business to ensure it is well placed to deliver for Bain Capital for many years to come.”

Bain Capital managing director Mike Murphy paid credit to Mr Scurrah’s leadership and personal commitment in guiding Virgin through its insolvency, but said that Virgin needed a “different form of leadership to survive in the long term”.

“We need a hands-on CEO with deep aviation, commercial, operational and transformation experience,” Mr Murphy said. “Jayne is the right person to take the business forward.”

Virgin’s unions have long had apprehensions about Ms Hrdlicka due to her budget airline background and some residual ill-will stemming from her time at Qantas during a period of toxic relations with unions.

Ms Hrdlicka said she was delighted to join Virgin and appreciated its “unique culture and I want to protect and build on it.”

“I am determined that Virgin Australia re-invigorates its strong brand and its passion for customer service, while embracing the diversity, talent and strength of its people,” she said.

Mr Scurrah’s impending exit on Wednesday heightened fears among Virgin’s workforce that Bain would renege on earlier assurances about the airline’s size and direction.

The Transport Workers Union said it would suspend wage negotiations with Bain until it clarified its intentions for Virgin’s future.

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Deloitte administrator Vaughan Strawbridge said he had reaffirmed with Bain that Virgin Australia would not be repositioned as a low-cost carrier.

“Virgin Australia will be a ‘hybrid’ airline, offering great value to customers by delivering a distinctive Virgin experience at competitive prices,” Mr Strawbridge said. “This will appeal to the full spectrum of travellers, from premium corporate through to more budget-focused customers.”

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Virgin Australia Bain takeover puts Paul Scurrah’s job in doubt


Another said company insiders had expected Bain to replace all of Virgin’s senior executives and management, with former Jetstar boss Jayne Hrdlicka – a former Bain executive who advised the firm on its bid for Virgin – expected to play a key role.

“We think they’re going down a budget path, and Paul doesn’t have budget carrier experience” the senior management source said.

Mr Scurrah successfully talked Bain around to backing his view, after the private equity firm’s local boss Mike Murphy earlier said he envisioned Virgin as a “hybrid” airline operating somewhere between Qantas and Jetstar.

Mr Scurrah’s ongoing involvement at the airline and vision for it to remain a full-service carrier with international operations was critical for Bain to win the support of Virgin’s 9000 workers over and vote in favour of its takeover offer last month.

The Transport Workers Union said it had suspended negotiations with Bain over a new enterprise bargaining agreement, and believed Bain was reneging on its commitment to maximise jobs, maintain a full-capacity network, full-service offering and to fly internationally.

“The ink is not yet dry on the sale of Virgin and it appears that private equity firm Bain Capital are behaving as we feared: ripping out the heart of Virgin and reneging on promises to the Australian people,” TWU national secretary Michael Kaine said in a statement.

“If the plan and scope of the airline as outlined in August by Bain Capital has already been scrapped then this is a serious betrayal that must be addressed.”

A suite of senior executives have quietly left Virgin in recent weeks following the approval of Bain’s takeover, but their departures have not been announced publicly. That includes chief strategy officer Michael Jones, head of corporate sale Anne Elliot and general manager of alliances and international sales Phil Squires.

One of the company insiders said that before the all-important creditors vote last month, “Bain were saying all the nice things about keeping as much of the workforce as possible”.

“But now, being a private equity firm, they are likely to cut as much as can,” they said.



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Bain offers unions key advisory role in Virgin reboot


Virgin Australia’s presumptive owner Bain Capital has extended an olive branch to the airline’s unions in the form of a workers’ advisory council that will consult on how the carrier is relaunched from administration.

The establishment of the body made up of three union representatives, Bain and Virgin chief executive Paul Scurrah follows a union revolt over the US private equity firm’s choice of directors to oversee Virgin.

Virgin creditors, owed $6.8 billion, will vote on the ownership transfer to Bain this Friday.

Virgin creditors, owed $6.8 billion, will vote on the ownership transfer to Bain this Friday.Credit:Getty Images

In a letter sent to unions on Sunday, Bain’s local boss Mike Murphy said he agreed to the unions’ request to establish a union advisory council, which will meet every fortnight until the end of the year.

“We see this confidential forum as an important opportunity to discuss key matters that go to the heart of Virgin’s recovery, including how we can secure long lasting employment for as many Virgin people as possible,” he said.



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Virgin staff told JobKeeper at risk if Bain deal voted down


Virgin Australia’s administrator Deloitte has warned thousands of stood-down workers that their JobKeeper payments might be cut off if a deal to sell the airline to Bain Capital is voted down at a creditors’ meeting next week.

Creditors owed $6.8 billion, including around 9000 Virgin staff owed $450 million, will vote on a deed of company arrangement (DOCA) to transfer ownership of the bankrupt company to the US private equity giant.

Around 4600 Virgin workers are stood down and receiving JobKeeper.

Around 4600 Virgin workers are stood down and receiving JobKeeper. Credit:

Even if the DOCA is voted down, Bain will take control of Virgin through an asset sale agreement signed in June following a fierce bidding process, which will require Bain to set up a new corporate entity to operate the airline.

Deloitte’s joint administrator Vaughan Strawbridge said in a video shared with staff on Friday that an asset sale could jeopardise access to JobKeeper payments for around 4600 employees, who have been stood down, while the airline flies a skeleton domestic network due to COVID-19 border restrictions.



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