Aviation watchers say some of Virgin Australia’s most high profile routes are under threat after the airline announced a dire $349.1 million annual loss.
Virgin Australia has announced it will review every single flight route on its network, as well as cut 750 jobs, as part of a drastic restructure to claw back a “disappointing” full-year loss of $349.1 million.
The airline, which recorded its seventh consecutive annual loss on Wednesday, said the job cuts were aimed at saving $75 million by the end of the 2020 financial year.
In addition, the airline is going to review all routes in its network in a bid to lower costs and use aircraft more efficiently.
But aviation expert Neil Hansford told news.com.au the losses were “totally predictable” and passengers who used the airline for leisure flights would be hit the hardest following the review.
“The business model that Virgin has now is not financial sustainable,” Mr Hansford, chairman of Strategic Aviation Solutions, told news.com.au.
“Virgin set out on a course to become a head-to-head competitor with Qantas. They invested enormously when they weren’t a profitable business. They tried to be the Qantas alternative … focusing on expensive lounges and provide certain service levels when they were having losses.
“Reviewing the flight route is the standard response when you’re in trouble like this.
“I think cuts will likely be made to leisure routes … and the time has come to address whether they should stay in the international market because when you’re in this much trouble, you need to get rid of anything that’s not making money.”