The headline of V Australia applying to return to sister-carrier Pacific Blue its rights to fly to Fiji is gaining a lot of traction, but it's important to read the details.
Emphasis added from Etravelblackboard:
In its submission V Australia said the move was in "response to market conditions" and instead would operate six services a week. The day which it will drop its service will then be taken up by sister airline Pacific Blue in its smaller B737-900s [sic].V Australia will return its rights for one day. It's not even going to have to cut capacity: while V Aus applied for and received daily flights, it has only operated the 777 six times a week. Pacific Blue already operates a flight on Wednesday, the day V Aus does not fly to Fiji.
Thus to say the reason is a "response to market conditions" is rich on Virgin's part. It's no secret the V Aus route to Fiji was launched because its 777 was spending a full day at Sydney waiting for its next LA flight, as a source with Virgin Blue confirmed to me. As the maxim goes, an aircraft not in the sky is an aircraft not making money.
Unlike Qantas, which can rotate its large 747 fleet to Asia, Europe, Africa, and South America, V Aus only flew to LA. Fiji at four hours away and a popular tourism spot, was a match. Replacing Pacific Blue capacity with unused V Aus capacity freed up Pacific Blue aircraft for new routes.
Perhaps at the time of application V Aus did think it would fly daily, but then a schedule change took time away, or V Aus wanted more time for ground maintenance.
The underlying connotation that Fiji is merely a stop-gap measure until V Aus has a larger fleet and can organically rotate aircraft hasn't been lost on Qantas.
In its response to the International Air Services Commission granting V Aus seats to Fiji, Qantas wrote:
It is entirely possible that, when conditions improve on routes to which the B777-300ER(Note: Qantas applied for its Jetstar subsidiary to gain seats to Fiji. The IASC decided to split the seats between Qantas/Jetstar and V Aus. So Qantas is understandably pessimistic about V Aus--and is right.)
is better suited, V Australia will redeploy this aircraft to other destinations.
V Aus rebutted, "The operation of services by V Australia is an important part of our long tenn growth strategy for Fiji and will remain so."
It's hard to see that Fiji, a leisure destination four hours away, is matched to V Aus's 777 lie-flat business beds and premium economy. Those cabins take up a third of the aircraft. But again, an aircraft not in the sky is an aircraft not making money. As long as V Aus has ample ground time in its schedule, Fiji will be the stop-gap measure.