Two of Australia’s big aviation stories in 2020 were the collapse of Virgin Australia and the grounding of Qantas’ international fleet. Both happened earlier in the year. One of the stories has played out. But the other still has some while to go.
Virgin Australia’s collapse, sale, and relaunch
Australia’s number two airline, Virgin Australia, went into voluntary administration in mid-April. It was sunk by excessive debt, some historically poor management decisions, and a general unwillingness to keep bailing the airline out.
Virgin Australia never stopped flying. For months, it staggered on, sometimes only operating a few flights a day. Administrators kept the airline ticking over, but only just. In late June, a white knight was found. A Boston-based private equity group, Bain Capital, bought Virgin Australia.
The formalities surrounding the sale process took some time to complete. Creditors, between them, owed around US$5.3 billion, needed to approve the sale. But by mid-November, the process was complete, and Virgin Australia unveiled its new mid-market offering.
“Australia already has a low-cost-carrier and a traditional full-service airline, and we won’t be either. Virgin Australia will be a mid-market carrier appealing to customers who are after a great value airfare and better service,” said newly installed CEO Jayne Hrdlicka at the time.
A few weeks later, this writer flew Virgin Australia a couple of times. The airline is yet to find its new groove fully. Some things haven’t changed – lovely cabin crew, clean cabins, same look. Other aspects need work – namely the inflight catering and terminal experience. No doubt Virgin Australia aims to iron out these kinks over the next couple of months.
Qantas abruptly halts international flying
Local arch-rival Qantas had a better 2020, but only just. Qantas never faced the threat of collapse, but the airline undertook some radical surgery to prevent that threat. Most notoriously, Qantas elected to ground its international fleet in late March and cease almost all international flying.
“With the possible exception of New Zealand, international travel demand could take years to return to what it was,” Qantas CEO Alan Joyce later said.
It was a decision that divided many Australians. Some appreciated the airline’s pragmatism and willingness to make tough decisions. Others thought the national airline should maintain a minimal strategic presence at key airports around the world. In the neighborhood, competitors such as Air New Zealand, Garuda Indonesia, Air Niugini, and Singapore Airlines took the latter option.
Except for running some government-subsidized repatriation flights and some New Zealand services, Qantas has stayed true to its March decision. Repeatedly, the airline’s management team has set mid-2021 as the tentative resumption date for international flying.
The bread and butter of Qantas’ flying is domestic flying within Australia. They’ve maintained that flying throughout 2020. This was and is despite some formidable barriers to flying within Australia. The revenue from domestic flying is helping to keep Qantas ticking over until their international flights resume.
A few other stories that snuck under the radar
While Qantas and Virgin Australia have hogged the local headlines, some other significant aviation stories have emerged out of Australia this year. They include Tiger Airways’ demise, the low-cost subsidiary Virgin Australia had previously picked up for one dollar, the success of Brisbane’s Alliance Airlines, and Rex’s jet plans for 2021. There’s always plenty going on.
What do you think? What were the big aviation stories out of Australia in 2020? Post a comment and let us know.