Capacity Reductions and New Baggage Fees at Virgin Blue

In response to the record fuel prices, Virgin Blue Airlines, has confirmed it is to remove a further two aircraft from Australian flying, introduce new baggage fees and increase the airline’s Flexible Fares.

The airline is to remove a further two Boeing 737 aircraft from the Australian domestic market by October 2008, reducing capacity by approximately 3% in addition to the previously stated 6% planned capacity reduction for the fiscal year 2008/09.

The aircraft will be withdrawn from service to operate as maintenance spares and to support the airline’s focus on efficient recovery from disruptions and improvement of its on-time performance. The removal of these planes from scheduled flying will result in frequency reductions on a number of under-performing routes.

Virgin Blue has also agreed with the Embraer corporation to delay five committed 2009 deliveries. This will reduce planned capacity by a further 3% in fiscal year 2008/9.

These decisions, coupled with those announced in June 2008, take the Virgin Blue capacity to be withdrawn from the Australian market to 12%. There are no expected redundancies at either Virgin Blue or Pacific Blue as a result of these capacity reductions.

New Baggage Fees

Virgin Blue will introduce a new “pay for weight” baggage policy which will apply to Virgin Blue and Pacific Blue domestic flights for fares booked from Monday 18 August on flights departing from Monday 1 September 2008. This policy replaces the current allowance of up to 20kg of free checked baggage.

A flat fee of $8 will apply for an increased allowance of 23 kgs of checked baggage for passengers travelling on all discount fares including new “Go Fares!” and “Blue Saver” fares when purchased online or through Virgin Blue’s Guest Contact Centre as part of the booking process. If the checked baggage allowance has not been pre-purchased, a $20 charge for up to 23kgs will apply at airport check-in.

The new baggage policy will include:

Increased baggage allowances and exemptions for families, with infant equipment (such as prams, portable cots and car seats) to be carried free of charge.

For passengers with special needs, mobility aids (such as wheelchairs and special medical equipment and similar) will continue to be carried free of charge.

Passengers travelling with sporting equipment (such as bikes, surfboards, skis and tennis bags) are also eligible for an extra 5kg of baggage.  No fees will apply for baggage up to 23kgs for Velocity Silver Members and Guests travelling on “Flexible Fares”.

No fees will apply for baggage up to 32kgs for Velocity Gold Members and Guests travelling on “Corporate Plus” and “Premium Economy” fares.

New Excess Baggage Fees

New Excess Baggage fees will apply from 1 September 2008. Virgin Blue and Pacific Blue domestic excess fees will be $8 per kg for baggage over 23kg (or over 32kg for Premium Economy, Corporate Plus and Velocity Gold Member travellers).

Lead-in Fares Reduced with Launch of New “Go Fare!”

Virgin Blue is to launch a new “Go Fare!” cutting its lowest lead-in fares by up to $20 across more than half of the airline’s domestic route network.

The year round “Go Fares!” are intended to allow price sensitive travellers to offset the new baggage fees and to stimulate support for leisure markets. The “Go Fares!” will go on sale from 18 August 2008.

Flexible Fares to Rise

Virgin Blue has also increased Flexible Fares by up to 5% on about half of its more demand resilient business markets.

Recently Austrian Airlines, Cathay Pacific, Northwest Airlines, United Airlines, Air New Zealand, Qantas, Continental Airlines, American Airlines and Air Canada have announced significant reductions to their international operations. British Airways is also expected to make an announcement about a similar move in the coming weeks.

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