REVEALED: The escape routes that are most likely to be traveled by Flailing Virgin Australia after they have reported losses of $ 350 million
- Virgin Australia is set to review their flight routes after a huge loss
- National and international flights are viewed and cut if necessary
- The company suffered a pre-tax loss of $ 71.2 million for the year ending June 30
- This was due to the weakening of the Aussie dollar and higher fuel prices
- The CEO said that 750 job losses would be implemented at headquarters to get back on track
The escape routes most likely to be chosen by Virgin Australia after the airline was shocked by losses of $ 350 million were announced.
Aviation expert Geoffrey Thomas of Airline Ratings told Daily Mail Australia that the routes that are most likely to be threatened were Sydney to Perth and Sydney to Melbourne.
& # 39; They will analyze each route with a fine comb and cut back where a route does not yield any money. & # 39;
But Thomas said it is more likely that Virgin Australia will analyze and shorten flight routes instead of scrapping them altogether.
The country's second largest airline announced plans to cut 750 jobs to save $ 75 million in costs per year on Wednesday.
The country's second largest airline on Wednesday reported an underlying pre-tax loss of $ 71.2 million for the year ending June 30, and will cut 750 jobs and review their escape routes
Thomas said that despite the prospect of fewer flights, he does not expect prices to rise.
& # 39; If one airline reduces capacity, you would logically expect another to raise prices – but in fact other airlines are also under the same pressure as Virgin.
& # 39; There is currently weak demand for flights due to low economic growth.
& # 39; Other airlines would be very careful about raising prices in a soft market, so I don't think we will see a price increase, & he said.
Paul Scurrah CEO with cabin crew
Aviation expert Neil Hansford of Strategic Aviation Solutions said that there will be spending cuts in many cities, some of which are expected to lose flights altogether.
"You will look a lot at the leisure routes, and the leisure routes may have a reduction in the daily frequency," said Hansford ABC.
& # 39; Some leisure routes, say the Tasmanian routes, where they get Sydney and Melbourne, may lose their directions from Perth or their directions from Adelaide.
International cities will also see a number of cuts because they are less profitable.
Some flights to the Pacific islands and Hong Kong will be carefully watched.
After the reported loss of the airline, the CEO blamed weak demand, higher fuel costs and a weaker currency.
The company has now lost money for seven consecutive years, with total losses of $ 1.9 billion.
The loss does not come as a surprise to investors after Virgin offered guidance in May for an underlying pre-tax loss of at least $ 35.6 million.
To get back on track, the company said it aims to reduce 750 corporate and head office roles – 7.5 percent of the workforce.
By the end of the fiscal year in 2020, it expects $ 75 million in cost savings.
The company is also planning an assessment of all of its flight paths and is expected to make changes to improve efficiency.
It reduced flights by 1.5 percent in May and June and is expected to further decline.
Virgin will also change the way it is organized and bring its three arms – Virgin Australia, Virgin Australia Regional Airlines and Tigerair – into one business team.
Virgin has reduced its flights in May and June by 1.5 percent and is expected to further scale down
CEO Paul Scurrah said that job losses were difficult but necessary to make a profit again.
& # 39; I regret the need to reduce the size of our workforce so quickly. However, today's financial results tell us loud and clear that we need to reduce costs, & he said.
& # 39; If we want to position the company for the future, create new opportunities, improve competitiveness and continue to deliver to our customers, we must make difficult but important decisions that are in the long-term interest of the group & # 39; he said.
& # 39; The key to our success is ensuring that we find the right balance between the interests of our team members, customers and our shareholders. We will focus on delivering for all three groups. & # 39;
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