While en route from Sydney to Hong Kong on the inaugural flight with Virgin Australia, I caught up with the airline’s Group Executive Rob Sharp to talk about the flight and where VA plans to go from here.
You’re launching this Sydney to Hong Kong service a year after your Melbourne flights launched; what have you learned about customer habits on that route, and how has that contributed to the decisions you’ve made for this service?
Firstly, we were really pleased with the take up on travel from the Southern Peninsula and Hong Kong down to Melbourne. Normally that takes quite a while to grow. So clearly our product was resonating up there. Our loads have been very good. We’ve also had ambassadors from Hong Kong Airlines on board our flights, who can speak Mandarin and Cantonese, and they’re on board this flight too, working alongside our own crew. And that’s helped with communication. Moving that forward, we’re doing similar things on the ground and at the airports, making sure we have staff who can communicate.
The other thing is the food, you can see we have a marvellous offering on board – but we’ve taken and implemented feedback. Like we have an egg tart on board. I was quite surprised at how many travellers from Hong Kong were aficionados of these… and what we initially had on board wasn’t very good – and they told us so. So we went back to the supplier to fine tune it and make sure it would resonate with our travellers. And now they’re fantastic. They’re all little things, but they make such a difference. And we have feedback mechanisms to continue fine tuning it.
What about the travellers from Australia? Are they using Hong Kong as a hub or a destination?
We have a long history between Australia and Hong Kong, you’ll find regular people just going there for long weekends, for personal travel. Over the last five years, business travel has picked up. There’s more conferences, more trade between the two countries, which is generating quite a lot of business traffic, so we’re picking up on both business and personal. We have announced the codeshare between us and Virgin Atlantic, and there are good connections now for people transiting through. So we expect a good baseload of business of coming through for that too. But why just transit? Hong Kong is a great city. I think people should come and stay there.
Virgin has long been saying that China is a focus for the airline, what are your plans beyond this new route?
The code share with Hong Kong Airlines has opened up ten more destinations within mainland China, and we also just added a codeshare with Hainan Airlines, so all up we’ve got 17 destinations, including our code on some direct flights. So those partnerships are working well. For now it’s about getting feedback on this flight (Sydney to Hong Kong), fine tuning it and the relationships with our partners too. But access to the infrastructure in mainland China is very tight, it’s very very competitive. There’s a lot of Chinese carriers flying to Australia now. Last year there were 1.4 million Chinese tourists (to Australia). In the next eight years (it’s predicted) that will grow to 4 million, so there’s a big market there, and we want to take advantage of that growth. So we’re positioning ourselves and raising our brand profile and we’ll see what emerges. So for now it’s more of a work with our partners and keep our head down on these routes from Sydney and Melbourne.
What about outside China?
Right now out international growth is focused on greater China and the US, but we have 13-14% increase in capacity on the New Zealand route, particularly to Auckland, to suit the demands of the business traffic there. So the Hong Kong services not only connect domestically but the destinations like Auckland too.
Any chance you’ll fly to Japan?
Japan isn’t on our immediate agenda, and certainly not going to announce anything today! Never say never, but you’ve got to keep focused on what you’re doing. It’s a big industry, and one of our success factors has been staying focused on what we do. And so the greater China market is our current focus.
What’s the timeline over the next few years looking like?
Our focus will remain the same – America and China are our major trade partners. It’s where most of the volume is growing. In terms of the US, we’ll continue developing our partnership with Delta. Domestically we’re effectively consolidating, we have quite a solid market share there and as the economy grows we’ll put more capacity in. Our short haul international network is quite substantial too, up through the Pacific Islands and through to NZ, and I can see that growing a little bit as well. But it’ll be that same story line as well for us. We’re focused on tapping into those growth markets.
Is there any development with the Air Canada partnership beyond the LAX connections?
We’re still in discussions with them. We have relationships with a number of airlines, and we are constantly exploring whether there are commercial benefits or not. So that’s a work in progress at the moment.
As you’re pushing into using Hong Kong more with Virgin Atlantic as a connection to the UK, does that cause any dramas with your existing partnerships? (Etihad goes via Abu Dhabi and Singapore goes via Singapore).
We have the benefit of having five major airlines that we deal with, so it’s all about choice. We don’t want to tell the customer who to fly with. So we’re all about creating that virtual international network that allows choice. So if you want to fly via Singapore or Hong Kong, you can. The benefit of Virgin Atlantic is that you’re on a Virgin product for the whole trip, and now you can fly all around the world with Virgin now, going via LA back to Australia. But then those who like to fly via Singapore, and use the Singapore product, have that choice.
Will you keep using the A330 on this route? Are there any plans for more 777 aircraft and/or adding Premium Economy to the service?
The Airbus 330 is the perfect product for this market, it’s the ideal length (in flight time). These aircraft are very expensive, so the utilisation of the route and the type of aircraft is very important. We believe this is a really good aircraft for that. The business product is a second to none, and we get very good feedback on it, so we wouldn’t be looking at changing that. In fact our long haul fleet, we don’t need to revisit that for at least another two years. We have leases on these aircraft and they expire in five years time. So in a couple of years time we’ll start to look at what we’ll do with the fleet and what new aircraft types we’ll explore. Whether it’s the 787, or the A350… they’re all new technology and at that point we’ll have a look at it.
We have ordered the 737 max, which will be the next generation of the work horses that will be used for the shorter routes. It also gets used across to New Zealand. They’re pretty much the same as the current 737s, but the air pressure is higher so you don’t get a bit more humidity in the aircraft, and you don’t get as dried out (which is a similar technology that we’ve seen in the 787). But for us, getting the product right is the most important part, rather than the aircraft itself. The competition is still the service you give, and we compete with the product like the business class we have here, and making sure we focus on great customer service through training and positioning.
As for premium… we find this configuration works really well. And we do have the Economy X product as a third class, which has been very successful. Just that extra legroom, and priority boarding and extra space above… our customers are loving it, particularly domestically. So there are no plans to change it.
What is there to come for the Hong Kong service in the future?
Technology is the only thing missing from this aircraft. We don’t have live connectivity and wi-fi on this aircraft yet. But that will start coming by the end of the year, across our entire fleet… we’re just waiting on FAA approval. We have 20 of our 737s so far loaded up with wi-fi, and and we just finished the roll out of the 777s for the LAX route. We’re getting great feedback on that service, the Gogo technology is really great and reliable. And this will open up a new world of options for travellers in terms of content on board – Netflix, video streaming and other services.
To book your next flight with Virgin Australia, head to their official website.
The writer flew as a guest of Virgin Australia on the inaugural flight from Sydney to Hong Kong.