Tigerair shuts Brisbane base, cuts flights in $99m crash
TIGERAIR will close its Brisbane base and dramatically slash its operations as Virgin Australia continues to cut costs following a $99 million loss in the first half of the year.
Virgin Australia Group chief executive officer Paul Scurrah told staff this morning network capacity would be reduced by 3 per cent in the next four months and five of Tigerair's loss-making routes would be cut.
He also revealed the group was "proposing to close Tigerair's Brisbane and Sydney bases".
"Unfortunately a number of our team members will be impacted as a result and we have commenced formal consultation with pilot and cabin crew representatives," he said.
How many staff will be affected and what operations will change is not yet known.
Australia's second largest carrier announced today a statutory loss of $99.9 million for the first half of this financial year, a blowout from a $55 million loss for the same period one year ago.
A 1.5 per cent revenue increase was not enough to offset higer fuel costs, labour agreements and leasing costs.
The company has also blamed the loss on one-off costs associated with the purchase of the remaining stake in the Velocity Frequent Flyer business.
Despite the result the number of passengers travelling with Virgin Australia Group increased 2.1 per cent.
To trim costs, the company also announced it would remove seven A320 aircraft from Tigerair by October and transfer two Boeing 737s into the budget carrier, reducing Tigerair's fleet from 13 to eight aircraft.
Tigerair's Sydney to Cairns route will be cut from April 27 and its Hobart to Gold Coast flight will end one day later.
The company will also temporarily reduce capacity on some routes as demand drops due to the coronavirus.
Virgin predicts coronavirus will cost the company $55 million in domestic earnings and $20 million on its international routes in the second half of the financial year.
About 400 of the 750 job cuts announced by Virgin in August last year are due to be completed by March 31, with the remaining on track by the financial year end.
A withdrawal from all Hong Kong flying will occur by March 2020.
Mr Scurrah told staff there
"We certainly have more work to do on our financial performance, but we have a very clear pathway to do so," he said.