Virgin Australia Group yesterday said that it is canceling its flights between Sydney and Hong Kong, just 18 months after launching the route, due to reduced demand caused by the pro-democracy protests and the 2019 novel coronavirus outbreak.
The airline began flying from Australia’s biggest city to Hong Kong in 2018, calling its China expansion a “key pillar” of its international strategy, but now admits the route proved “challenging.”
Virgin Australia chief commercial officer John MacLeod said that demand had declined following months of sometimes violent protests in Hong Kong that have been followed by the coronavirus outbreak in China, which has spread to the territory.
“While the decision to withdraw from the Hong Kong market has been a difficult one, it demonstrates our strong focus on driving greater financial discipline through our network,” MacLeod said in a statement. “Current circumstances demonstrate that Hong Kong is no longer a commercially viable route for Virgin Australia to continue operating, however international tourism remains an important part of our strategy through our other international routes and partner airlines.”
The route is to cease operating on March 2.
Australian Department of Transport data showed that Virgin Australia’s outbound Sydney to Hong Kong flights were operating at just 64 percent capacity in November last year, compared with 80 percent for Qantas Airways Ltd and Cathay Pacific Airways Ltd (國泰航空).
The announcement came as the airline faces wider financial troubles, posting an underlying pretax loss of A$71.2 million (US$48.1 million) last year after achieving an underlying profit of A$64.4 million the previous financial year.
Virgin Australia in November last year announced that it would suspend services between Melbourne and Hong Kong from Tuesday next week.
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