Virgin Australia boss Paul Scurrah is adamant the carrier will not become a downmarket, budget airline after announcing a third of its workers will go once it re-emerges from voluntary administration.
The airline will provide domestic and short-haul international flights after its administrator and investment group suitor Bain Capital gain approval from creditors and once travellers return in the COVID-19 economy.
While Virgin is slashing costs, including dropping its current budget offshoot Tigerair, it intends to compete in the lucrative business market and won’t cede the corporate sector to major rival Qantas.
“We’re not about to create a business travel monopoly (for Qantas) by exiting that space,” Mr Scurrah said during a teleconference on Wednesday.
Bain Capital had done a data-led study to determine how to best position the airline in a post-COVID-19 world.
“We know businesses do want to start travelling when the market recovers and there’s pent-up consumer demand,” Mr Scurrah said.
“You won’t see us go back to the days of Virgin Blue, cracking jokes and rolling toilet paper down the aisle.”
Mr Scurrah was unable to say which short-haul international routes the new look airline might serve due to COVID-19 uncertainty.
However, Bali, Fiji and other Pacific Islands are on its radar.
About 3000 of 9000 jobs will go at Virgin, which has been hit by turmoil in the aviation market caused by the coronavirus pandemic.
But when the aviation market recovers, Virgin plans to pick up 2000 extra workers, although it warns that might not be for at least three years.
“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer,” Mr Scurrah said.
Customers would notice some changes to services, according to Mr Scurrah, but these would be based on feedback from customers about what they don’t value.
Meanwhile, Virgin will streamline its fleet by shedding its Boeing 777s, Airbus A330s, Tigerair Airbus A320s but it will retain its Boeing 737s and regional and charter aircraft.
He said voluntary administration had given the airline the chance to reset costs without taking the services down-market.
“In a post COVID world, business travel budgets will be impacted and people will be looking for value,” he said.
The airline will combine its operations into its existing headquarters in Brisbane, which will move from Bowen Hills to Southbank.
Bain Capital has yet to take legal ownership of Virgin, and the next meeting of creditors expected on August 25 is expected to tick off on the sale ahead of its completion in the coming weeks.
Virgin had been struggling under billions of dollars worth of debt and the impact of the pandemic on the passenger jet market, which has led to the near-collapse of international travel and a huge slump in domestic markets.