Virgin Australia Applies for Daily Australia to Beijing, Hong Kong Flights
1st Jun 2016
Only a day after it has welcomed China?s HNA Group to its board, and sold a 13 per cent stake to it, Virgin Australia has applied for daily flights to Beijing and Hong Kong from Australia.
The Australian carrier has applied with the International Air Services Commission, which is responsible for allotting capacity on both China and Hong Kong routes. The application was lodged on Tuesday and, if successful, VA will begin servicing these routes in June.
Virgin Australia also revealed it will use Airbus A330-200 aircraft, with 275 seats, to service both Beijing and Hong Kong. At the moment, the airline has six such planes in its fleet, all with 275 seats, but they are busy on other routes, namely between Perth and the east coast and between Fiji and the east coast. Whether VA will divert some or all of those planes to the new routes or buy or lease new ones, remains to be seen.
According to Virgin Australia Chief Executive Officer John Borghetti, VA could lease the planes from HNA. HNA Group owns one of the largest aircraft leasing companies in the world, Bohai Leasing.
Borghetti also said he expects most of the traffic to include inbound travelers from China, rather than the other way around and Australians heading to China.
The deal works for both sides. Not only does Virgin get to compete with Qantas, which is codesharing with China Southern and China Eastern, for the Chinese market, but HNA also gets a wider reach.
One of the problems for HNA Airlines lies in the difficulty to receive government approval to launch flights to Australia, namely to Sydney, Melbourne, Perth or Brisbane, as another carrier, Cathay Pacific has already used up all the traffic that is available for Hong Kong airlines.
In addition, the Hong Kong-based carrier also can?t receive approval to launch international flights from larger hubs like Beijing, Shanghai or Guangzhou, as the Chinese government usually keeps these for state-owned China Eastern, China Southern and Air China.
By codesharing and revenue-sharing with Virgin Australia, HNA has effectively side-stepped this problem.