Virgin to cut seven regional flights under new owner Bain

Virgin to cut seven regional flights under new owner Bain

Virgin Australia (ASX: VAH) will withdraw from several regional flight routes as part of its business recovery plan under new owner Bain Capital.

The airline says due to ongoing subdued customer demand it will be cutting services from Uluru, Albury, Tamworth, Harvey Bay, Port Macquarie, Mildura and Cloncurry for the foreseeable future.

The announcement comes just under a week after Virgin creditors accepted the terms of a $3.5 billion handover to new owner Bain Capital which will see a partial return of funds to unsecured creditors.

Virgin is currently not operating flights to the aforementioned regional hubs and says even before the COVID-19 pandemic disrupted travel these routes were already under review as they were underperforming.

"We remain committed to regional Australia and we plan to continue to fly to 20 regional destinations in Australia," says a Virgin Australia spokesperson.

"We will continue to review our network as travel restrictions ease and demand returns.

"We will continue to contact affected guests who booked with us to advise them of their options. Guests who booked with a travel agent will need to contact them directly."

With regard to the Port Macquarie route specifically, Virgin says it remains committed to the NSW town through its partnership with regional airline Alliance.

Alliance's route from Brisbane to Port Macquarie is currently suspended, but Virgin assures customers it will continue to codeshare when the flight path can resume.

The reduction of regional flights is part of Virgin's recovery plans, which involve cutting around 3,000 jobs and scrapping budget airline Tigerair.

When the plan was announced Virgin Australia CEO Paul Scurrah said it would re-establish the brand as an iconic Australian airline, securing approximately 6,000 jobs in the process.

"Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world," says Scurrah.

"Even when we do see a return to pre-COVID-19 levels of travel, successful airlines will be influenced by demand and look very different than the way they did previously, requiring long-term capital, a lower cost base and be more focused on providing exceptional experiences through a combination of great people and world class technologies.

"Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market. We believe that over time we can set the foundations to grow Virgin Australia again and re-employ many of the highly skilled Virgin Australia team."

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