Virgin Australia cancels services to Hong Kong

Virgin Australia cancels services to Hong Kong

Virgin Australia (ASX: VAH) will withdraw its services between Australia and Hong Kong, citing ongoing civil unrest in the region and the coronavirus outbreak.

The cancellation of all services follows the airline's decision to suspend its Melbourne to Hong Kong service in November 2019, which is effective from 11 February.

Its Sydney to Hong Kong route will cease operating from 2 March 2020.

"Hong Kong has continued to be a challenging market," says Virgin Australia chief commercial officer John MacLeod.

"With a decline in demand following ongoing civil unrest, and growing concerns over the coronavirus outbreak in the wider region, we have made the decision to withdraw services."

In addition to civil unrest and the coronavirus, money appears to be a priority for the airline, with MacLeod saying that the company will focus on "driving greater financial discipline through the network".

"Current circumstances demonstrate that Hong Kong is no longer a commercially viable route for Virgin Australia to continue operating, however international tourism remains an important part of our strategy through our other international routes and partner airlines," says MacLeod.

Virgin Australia will contact those with bookings after 2 March to find alternative arrangements in the wake of the suspension of services.

Virgin's decision to withdraw services from Hong Kong follows yesterday's announcement from Qantas (ASX: QAN) that it has suspended two direct services to mainland China.

The company has cited rostering challenges as behind the decision to suspend flights connecting Sydney to Beijing and Shanghai from 9 February to 29 March 2020.

Airlines such as British Airways, Lufthansa and Air France have temporarily cancelled all direct flights to and from China, while carriers including United Airlines, American Airlines, Air Canada, Air India, Air Asia, Finnair, Cathay Pacific and Korean Airlines have either cancelled certain routes or reduced schedules.

Air New Zealand has continued to maintain its direct services with mainland China with demand as the key factor.

Shares in Virgin Australia are up 3.57 per cent to $0.14 per share at 10.08am AEDT.

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