Virgin Australia today announced plans to commence services to Hong Kong and mainland China by mid-2017.
The services will operate under a proposed alliance agreement with HNA Aviation, Hong Kong Airlines and HK Express, which is currently being reviewed by the Australian Competition and Consumer Commission (ACCC). They are, in effect, the first major step in a closer operating relationship between the Australian carrier and its Chinese major shareholder, HNA Aviation Group as Virgin looks to expand its international footprint.
The scope of the new services
- New direct services between Australia and the Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong), as well as Australia and The People’s Republic of China (mainland China) operated by Virgin Australia;
- Codeshare on each other’s flights between Australia and Hong Kong, between Australia and mainland China and on each other’s domestic networks; and
- Co-operate in relation to route planning, sales, distribution and marketing, frequent flyer programs, lounge access and other activities.
The first stage of the alliance will see Virgin Australia commence services between Australia and Hong Kong by mid-2017 subject to ACCC authorization.
Identifying the growth potential in the Chinese market, Virgin Australia Group CEO John Borghetti stated:
“The alliance will accelerate and support our access to the Chinese market, which is Australia’s fastest growing and most valuable inbound travel market.
“HNA Aviation fly nearly 100 million passengers each year and we look forward to working collaboratively with them to drive inbound visitation to Australia, resulting in significant benefits for the Australian tourism industry and broader economy.
“Importantly, this strategic alliance with HNA Aviation, Hong Kong Airlines and HK Express is a key plank in Virgin Australia’s International strategy and will help our business deliver long-term growth and success.”
No shortage of competition for Virgin to China
Virgin Australia won’t be short of competition in this market though, with no less than nine carriers operating directly between Australia, Hong Kong and mainland China, including Qantas and Cathay Pacific. Virgin Australia partner Singapore Airlines is also a significant player in the Australia – China market via its Changi hub.
Fleet wise, Virgin ‘s 777 long haul aircraft won’t be used for these new China services with the airline announcing that flights to Hong Kong will be operated using smaller Airbus A330 aircraft, ensuring that too much capacity isn’t added too soon.
Onward connections to destinations in mainland China will be offered on services operated by Hong Kong Airlines. Direct flights between Australia and mainland China will feature as part of the later stages of this agreement, once the Hong Kong services become established.
Virgin Australia will also codeshare on services operated by Hong Kong Airlines, Hainan Airlines and other HNA Aviation airlines on journeys between Australia and mainland China and between Australia and Hong Kong. Customers of Beijing Capital Airlines, Hainan Airlines, Hong Kong Airlines and Tianjin Airlines will be able to book travel on Virgin Australia’s domestic and trans-Tasman network.