Virgin suspends all international flights
Virgin Australia will suspend all international flights and make deeper cuts to domestic services as travel demand plunges during escalating coronavirus restrictions.
The airline on Wednesday said it will suspend all international flying for two and a half months from March 30 to June 14 and will also reduce domestic capacity across Virgin and Tigerair services by 50 per cent in response to government-imposed travel restrictions announced at the weekend.
International travellers to Australia are now required to self-isolate for 14 days upon arrival.
Prime Minister Scott Morrison has since urged Australians not to travel overseas, while the government has also handed the sector a $715 million lifeline to help it through the coronavirus pandemic.
Virgin has already reduced executives' fees as it joined rivals in attempting to soften the impact of the COVID-19 spread.
Qantas on Tuesday flagged an impending 90 per cent reduction in international flights and 60 per cent reduction in domestic capacity.
Air New Zealand will also cut 13 routes to Australia and will run just 20 per cent of regular trans-Tasman capacity.
It will take off from Wellington and Christchurch for Australia just twice a week, to Sydney, and is not ruling out further cuts.
The company suspended trading on the ASX on Wednesday.
Regional carrier Rex, meanwhile, has warned it faces closure within six months if the federal government does not increase its support measures, including a sovereign guarantee for its bank loans.
Some smaller regional carriers have only weeks of reserve left, Rex says.
Virgin's new measures are the equivalent of grounding 53 aircraft and follow already-announced service reductions on Friday.
The airline said it would aim to avoid staff redundancies "wherever possible" by fast-tracking measures such as accrued leave, leave without pay, and redeployment.
"We have entered an unprecedented time in the global aviation industry, which has required us to take significant action to responsibly manage our business while balancing traveller demands and supporting the wellbeing of Australians," Virgin managing director Paul Scurrah said in a release to the ASX.
The airline had already suspended full-year earnings guidance as it flagged reductions in its Los Angeles, Japan, and trans-Tasman services, as well as announcing the exit of Auckland services to and from Tonga and the Cook Islands.
Virgin's Melbourne to Los Angeles services will be suspended from March 20 while the inaugural Brisbane to Tokyo, and Melbourne to Denpasar services will be postponed from March 29.
The company said it and budget operator Tiger will operate a reduced international schedule between now and March 29 to enable Australians to return home and visitors to return to their point of origin.
Virgin shares were up 9.5 per cent to 6.9 cents by 1155 AEDT on Wednesday, but have shed about two thirds of their value since they were worth 14.5 cents at the start of February.
The company's first-half loss widened to $88.6 million after it bought all of its Velocity Frequent Flyer program, wrote off assets and made workforce reductions.
Qantas shares were down 11.5 per cent at a near-four year low of $2.54 by 1155 AEDT on Wednesday and have now lost about 60 per cent of their value since the start of February.
The federal government announced on Tuesday it will forgo fuel excise, air service charges and regional security fees in a move expected to create an up front benefit of $159 million to Australia's air industry, with the government refunding charges paid since February 1.
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