Virgin Australia cleared for China flights | ATWOnline

The daily Beijing flight will use 1,925 seats per week.

Australian regulators have approved Virgin Australia’srequest for daily flights to Hong Kong and Beijing, which will be a key part of Virgin Australia’s new partnership with China’s HNA Group.                                                                       

HNA Group is set to own almost 20% of Virgin Australia after a series of share-issue agreements is finalized. As part of this deal, Virgin Australia and HNA intend to cooperate on routes between their countries. Virgin Australia does not serve China, but signaled it will launch flights to support its new partnership.

Virgin Australia applied to Australia’s International Air Services Commission (IASC) for the allocation of capacity under the relevant aviation agreements. It is seeking daily flights to Hong Kong and China, using Airbus A330-200s, although it has not specified which Australian gateway airport the flights will use.

The IASC granted both requests, and in each case there is more than enough capacity available to be allocated under existing aviation agreements. The daily Beijing flight will use 1,925 seats per week, and there are more than 26,000 weekly seats available to Australian carriers for flights between Guangzhou, China; Beijing and Shanghai, and the four largest Australian cities.

The Australia-mainland China market is fast-growing and highly competitive, the IASC said. China Southern Airlines has a 23.4% market share, Cathay Pacific has 15.3%, China Eastern Airlines occupies 13.7%, Qantas has 12% and Air China has a 9.1% share.

There are 42 weekly frequencies available for flights between Hong Kong and Sydney; Melbourne; Brisbane; and Perth, Australia. The two major players in this market are Cathay Pacific with a 45.3% share, and Qantas with 36.2%. Virgin Australia currently offers service to Hong Kong via codeshare on Singapore Airlines flights.

Capacity allocated to Virgin Australia by the IASC must be fully used from June 1, 2017, and the authority is valid for five years.

Virgin Australia CEO John Borghetti recently said China will be a very important market for the carrier. Inbound traffic from China to Australia has been increasing faster than in any other market, in contrast to slowing demand in the domestic market.

While Virgin Australia’s six A330-200s are primarily used on domestic routes, the airline has always intended to use them internationally as well, Borghetti said. He said the A330-200s are well-suited to China routes, as the -300s would not have the range to viably operate Beijing routes from Australia.

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