UPDATE 1-Virgin Australia’s January domestic capacity missed estimates due to state travel restrictions | Instant News


* Airlines operating at 40% of pre-pandemic capacity v 60% estimate

* Will cut up to 350 head office roles as part of 3,000 layoffs

* Bigger rival, Qantas, has also downgraded domestic capacity estimates (Adds Qantas capacity breakdown, Virgin’s layoffs)

SYDNEY, 27 Jan (Reuters) – Virgin Australia said Wednesday it was operating at 40% of domestic capacity before the pandemic in January, missing forecasts of 60% as country-based travel restrictions hindered the aviation market’s recovery.

Australia recorded a 10th consecutive day of no new local COVID-19 cases on Wednesday, but many states have imposed some travel restrictions following the outbreak in Sydney last month.

Bigger rival Qantas Airways Ltd expects to run 60% of pre-pandemic domestic capacity in the March quarter, below a previously estimated rate of nearly 80%, due to the country’s travel restrictions, Chief Executive Alan Joyce said this month.

Virgin Australia, now owned by US private equity group Bain Capital, added it had notified employees on Wednesday it would cut to 350 headquarters roles in the coming months to complete the 3,000 layoffs announced in August.

“The challenging environment demonstrates the need to complete our restructuring and reduce costs in line with our simplified business model,” said a spokeswoman for Virgin Australia.

Virgin Australia has shifted from being a full service airline to occupying a mid-market position between Qantas and its budget fleet Jetstar.

Virgin Australia this month launched a new senior leadership team under executive Jayne Hrdlicka, including several executives who had worked with him while he was running Jetstar. (Reporting by Jamie Freed; Editing by Tom Hogue and Jane Wardell)

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