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VIRGIN BLUE IMPLEMENTS CAPACITY CONSOLIDATION

27/03/2009

Thursday 27 March 2009: Virgin Blue said today it had revised its Australian domestic schedule following the descheduling of five Boeing 737 aircraft from May 7, 2009.

 

The airline said the capacity reduction equated to the removal of 28 flights daily from a total of over 330 domestic daily services. The schedule changes are effective for flights from 7 May, 2009. As of this morning they are reflected on Virgin Blue’s web site and will be progressively updated in travel agent and global GDS systems over the next few days.

 

Virgin Blue had not withdrawn from any markets and had conducted a thorough review to identify high frequency routes where projected traffic flows could bear a temporary consolidation of capacity. The airline said it would contact Guests whose bookings may be affected to ensure any changes are advised and inconvenience minimised.

 

Virgin Blue announced its intention to remove this further 8% of annualised capacity or up to 5 aircraft, from Australian domestic flying for 2009/2010 on 17 February, 2009.

 

The airline said the reductions were a prudent interim capacity management plan due to continued and forecast deterioration in domestic demand. The aircraft will be managed as operational spares and will not be redeployed in to scheduled service for at least 12 months.

 

The capacity reduction has propensity to impact up to 400 full-time equivalent positions at Virgin Blue. The company has been exploring a range of initiatives to minimise associated headcount reduction including leave without pay, transfers to new international airline V Australia, shorter hours, job sharing and other initiatives.

 

“We have been very open with our team, outlining in a realistic manner the current operating environment and what we have to do to keep our business sustainable during economic downturn,” said Virgin Blue Chief Executive Officer Brett Godfrey.

 

“We are very encouraged by the attitude of people. While we started the month of March with a challenge to reduce our operational fleet by 5 aircraft and therefore 400 positions, it is because of their flexibility and spirit of co-operation, that we will likely manage our way through this phase with fewer redundancies than initially indicated”.

 

“All in our business appreciate that we must remain vigilant and continue to adjust to changing market conditions. If that means we must implement further austerity measures, we will do that in order to keep our business strong.” he said.