The move was part of a strategy to tap into growing travel demand in Greater China, while linking up with alliance partner airlines owned by its major Chinese shareholders, but it has been a loss-making venture.
Thirty-six per cent of the seats on Virgin’s Hong Kong flights were empty in November, according to Department of Infrastructure data, compared to only 20 per cent for Qantas and Cathay Pacific.
Virgin on Thursday said demand on the “challenging” route had been battered by months-long anti-government protests in the financial hub which, along with uncertainty around the coronavirus outbreak, led to the decision to drop the route.
“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,” said Virgin’s chief commercial officer, John MacLeod.
“International tourism remains an important part of our strategy through our other international routes and partner airlines”.
Dominant local carrier Cathay Pacific’s passenger numbers collapsed by as much as 46 per cent in November amid the crippling protests. Virgin faced an additional challenge with the near collapse of its local alliance partner Hong Kong Airlines.
Virgin said it would contact guests booked to fly to Hong Kong from March 2 onward to arrange alternative travel plans.
Dropping Hong Kong services is the latest move by Virgin chief executive Paul Scurrah, who in his first year in the top job has been cutting unprofitable routes, and looking for cost savings in an attempt to improve the loss-making airline’s financial performance.
More to come