Virgin Blue May Shift V Aus Flights to Pacific Blue; Delays Break-Even for V Aus

Pacific Blue 737.jpg Virgin Blue could shift some of its V Australia routes to Pacific Blue, whose B737-800 is seen touching down at New Zealand’s Christchurch. Photo: Will Horton.

The Virgin Blue Group has affirmed its commitment to a number of its destinations but acknowledges it could shift some flights operated by its long-haul and full-service V Australia subsidiary to its Pacific Blue subsidiary. This comes following public talk the group could axe international services as part of a network-wide route review.

“We will not be withdrawing services to Bali, Phuket and Fiji as a group,” a spokesman for the carrier says.Pacific Blue serves the three destinations while V Australia serves Thailand’s Phuket and Fiji’s Nadi.

The spokesman did not rule out the possibility Pacific Blue could take over the V Australia services, but notes that would be “speculation”.

V Australia’s fifth B777-300ER, due to enter service in November, will be used to increase frequencies to existing destinations, the carrier’s timetable shows. After that its growth will be stunted as it cancelled in April its two last B777s on order. Shifting existing flights to Pacific Blue would enable V Australia to expand without new aircraft.

“All schedules and route networks are under review,” the spokesman says. The review will look at “better ways to maximise efficiency and adjust capacity,” he says. “We’re nimble in terms of readjusting capacity,” he notes. “Within the next three months you will start to see adjustments. It’s not going to happen in one big bang.”

The review follows former Qantas executive John Borghetti taking the reigns in May as CEO. The review also comes as the carrier last month slashed its profit outlook for the year from A$80-100m ($70-88m) to A$20-40m ($18-35m) due to a softening market.

V Australia is now not projected to break-even by August, the spokesman says. Since V Australia’s February 2009 launch it expected to break-even within 18 months. Former CEO Brett Godfrey affirmed that target in February at the carrier’s half-year earnings results.

“As a result of the recent downturn it’s unlikely we’ll meet this target,” the spokesman says. He declines to comment if V Australia will break-even by 2012, saying, “There is no guidance for 2011 due to the volatility of the market.”



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