MELBOURNE, Feb 5: British billionaire Richard Branson’s Virgin Atlantic today said it will wind up its sole Australia service, citing increasing costs and weak revenues.
The British airline’s last flight from Sydney to Hong Kong will take off on May 5, almost 10 years after first landing in Australia, The Age newspaper reported.
Increasing costs and a challenging economic environment meant the route was no longer profitable, the airline said in a statement.
External factors such as increasing costs and a weakening Australian dollar had affected the airline’s profitability on the route, Virgin Atlantic chief executive Craig Kreeger said.
“These are still difficult times for the airline industry and as part of our strategy to operate more efficiently, we need to deploy our aircraft to routes with the right level of demand to be financially viable,” he said.
The airlines, which currently employs 47 ground crew and an office staff in Sydney, has not yet announced any job losses.
A spokeswoman said it would take nearly a month before it will be known how many staff would be made redundant.
The development would give boost to other rival airlines, including British Airways, which is the last major European airline to still fly to Australia via Asia. The move is also good news for competitors Qantas and Cathay Pacific, who will now be the only airlines to fly directly between Sydney and Hong Kong, the report said.
The airline will, however, continue to operate between Hong Kong and London’s Heathrow Airport.
Virgin Atlantic first began flying to Sydney in December 2004.
Branson’s Virgin Group owns a 51 per cent stake in Virgin Atlantic. The mogul also holds a stake in Virgin Australia, an airline he co-founded in 2000. (AGENCIES)
Follow our WhatsApp channel