Virgin Australia to trim domestic capacity, axe a Hong Kong route

Virgin Australia Holdings said Wednesday it plans to cut domestic capacity by at least 2% and remove five aircraft from its fleet as it grapples with stagnant demand. It will also axe its Melbourne-Hong Kong route, which Virgin said had underperformed amid widespread pro-democracy protests in Hong Kong and the carrier will fly from Brisbane to Tokyo’s Haneda Airport instead. The reduction in domestic capacity, which will take place before end-June and comes on the heels of restructuring moves unveiled this year, is aimed at lifting airfares as domestic revenue and demand have flatlined, CE Paul Scurrah said. “We are seeing a flat market compared to a very robust first half last year,” he said. “We are seeing the same things our competitor is seeing.” Virgin said in August it would cut 750 jobs, merge business divisions and conduct a sweeping review of its operations after swinging to an annual underlying loss due to soft market conditions and higher fuel costs. Scurrah said on Wednesday the airline was working to get the balance right between Virgin Australia and its budget brand, Tigerair Australia, so that the pair were no longer operating on the same routes at the same time.<br/>