Virgin Australia has announced a significant return to low-cost travel by introducing a new low-cost ticket that does not contain a budget allowance.
New Economy Lite tickets between Sydney and Byron Bay will start at $59 one-way, bringing it on level with low-cost competition Jetstar.
It comes despite Jayne Hrdlicka’s repeated assertions that the airline will adopt a hybrid strategy in which it would sit between rivals Qantas and Jetstar, as well as the shutdown of its former low-cost affiliate, Tigerair.
However, on ‘Economy Choice’ and ‘Economy Flex,’ the airline will continue to provide economy seats with baggage, as well as business-class alternatives.
According to Virgin, while all tickets allow consumers to earn Velocity Frequent Flyer points and Status Credits, Economy Lite looks to have fewer of both.
According to the airline, about one-third of customers do not require check-in baggage on domestic itineraries, and this number is growing on the country’s major Golden Triangle routes connecting Melbourne, Sydney, and Brisbane.
“Every client is unique, with different wants and budgets, and we want to welcome all of them onboard to experience our award-winning service in the way that best suits them,” said a Virgin spokeswoman.
Virgin will continue to offer Economy X and business class rates in addition to the three-tier economy booking system.
On her first day on the job, Virgin chief executive Jayne Hrdlicka reiterated the resurrected airline’s commitment to not revert to a budget carrier like its predecessor, Virgin Blue.
“Australia already has a low-cost carrier and a typical full-service airline, and we will not be one of them,” Hrdlicka explained. “Virgin Australia will be a mid-market carrier aimed at passengers looking for a good deal on fares and superior service.”
“The travel environment is changing, and our consumers’ interests are evolving,” she noted.
“We know that after COVID-19, leisure travelers, small and medium companies, and many corporates are looking for better value. They want flexibility and choice, a trustworthy brand that shares their values, and amazing prices, as well as the premium features they appreciate the most.”
The airline has previously discontinued its complimentary refreshments for domestic economy passengers, currently offering simply tea, coffee, and water, and has also conducted a “end-to-end” evaluation of its business class product.
Despite the assessment, the airline appears to be devoted to its business class product, recently announcing the re-opening of some of its premium lounges in major countries.
TWU national secretary Michael Kaine told the Australian Aviation podcast earlier this year that the “jury is still out” on Virgin’s plan to become a hybrid airline.
“Virgin needs to improve its ability to articulate what the hell mid-market means,” added Kaine. “Because it is a matter of tremendous concern for the workers that it is not possible.”
“If there’s one thing crazier than running full tilt at Qantas at the very, very top of the market, it’s thinking you can defeat them at the very, very bottom of the market,” Kaine added.
“You must find the sweet spot in the middle. However, the sweet spot in the middle requires you to have an offering that is appealing to the Australian leisure and business markets.
“They want lounges, a nice frequent flyer program, a point system that combines beautifully with foreign travel when it becomes available again. They also desire the ability to travel regionally.
“And, once again, if Virgin wants political backing in its quest to become a truly vital airline in Australia, it must ensure that it meets all of those criteria.
“All of this means that mid-market involves more than just hedging your bets. You must be viable, and I believe the jury is still out on that point at the moment.”
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