Virgin Blue's decision to exit the New Zealand domestic market comes after it lost "millions of dollars" since starting operations three years ago.
"The prospects of it turning a profit are not good so there really is no point continuing," CEO John Borghetti told Australian media after this morning's announcement.
The losses racked up by subsidiary Pacific Blue came up to "tens of millions of dollars" since it began operations, he said in comments confirmed by a spokeswoman from the carrier. Borghetti added that there was no end in sight as there were three airlines competing for in market of only four million people.
Pacific Blue's fleet of Boeing 737s will be redeployed on its services on the trans-Tasman, Pacific and Southeast Asian markets, in line with growing demand and higher revenue potential in these sectors, says the carrier.
The carrier has announced increases on its Brisbane-Hamilton services. In the coming weeks, it will up its Denpasar-Melbourne services from five-weekly to daily, increase Perth-Phuket and Brisbane-Dunedin flights to thrice-weekly from twice-weekly, and ramp up Christchurch-Melbourne operations from four-weekly to daily.
It will also take over the six-time weekly service from Sydney to Nadi in Fiji operated by the group's long-haul carrier V Australia.
The change is part of a wide-ranging restructure of Virgin Blue's network, which the airline announced this morning. V Australia will be fully devoted to the long-haul market from end-2010, with additional services on flights from Australia to Los Angeles, Johannesburg and Phuket. Virgin Blue is increasing capacity in the domestic market, in particular in Western Australia.
Source: Air Transport Intelligence news
