Loading

Virgin Australia to commence Beijing and Hong Kong services in 2017 under HNA deal, if slots allow

Analysis

Virgin Australia's long haul network will double in 2017 as Abu Dhabi and Los Angeles are complemented with daily flights to Beijing and Hong Kong, which Virgin intends to launch from an undisclosed Australian city on 01-Jun-2017. The A330-200 flights help Virgin move widebodies out of the domestic Australian market. The Beijing and Hong Kong flights will be part of an alliance with mainland China's HNA Group, which has announced an investment of 13% in Virgin with the intent of taking it up to 19.99%.

Beijing is the home of the HNA flagship Hainan Airlines, while Hong Kong is home to HNA's Hong Kong Airlines. Restrictions in China and bilateral constraints in Hong Kong mean that the HNA group airlines cannot fly trunk routes. Virgin Australia is free of the restrictions that Hainan Airlines faces in China, and can use the available frequencies for Australian airlines to Hong Kong (Hong Kong-based airlines have exhausted their allocation).

Virgin will however need to secure slots in these opaque markets - Beijing especially. Its partners could help or even give slots, but protective action by competitors should not be underestimated. The focus turns to the commercial arrangement and whether it will be profitable for Virgin. Hong Kong will generate some outbound Australia traffic, but the routes will be heavily sold by HNA - its airlines and travel agency partners. The Hong Kong service will be able to tap into Hong Kong Airlines' mainland China network, with some connections more efficient through Hong Kong than Beijing.

Read More

This CAPA Analysis Report is 2,052 words.

You must log in to read the rest of this article.

Got an account? Log In

Create a CAPA Account

Get a taste of our expert analysis and research publications by signing up to CAPA Content Lite for free, or unlock full access with CAPA Membership.

InclusionsContent Lite UserCAPA Member
News
Non-Premium Analysis
Premium Analysis
Data Centre
Selected Research Publications

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More