* Targeting about a third of the domestic market share
* Will end a decade-long corporate travel arms race
* Introducing new food purchasing options in economy class (Adds administrative details, comments Qantas CEO)
SYDNEY, Nov 18 (Reuters) – Virgin Australia will position itself as a mid-market carrier targeting about a third of the domestic aviation market share under US private equity firm Bain Capital, the airline’s new chief executive said on Wednesday. .
Virgin’s shift from being a full-service airline will mark the end of a decade-long arms race with Qantas Airways Ltd for corporate travelers involving luxurious airport lounges, celebrity chefs and reclining business seats on longer domestic flights.
“Australia already has low-cost carriers and traditional, full-service airlines, and neither would we,” Virgin Australia Chief Executive Jayne Hrdlicka said in a statement, referring to Qantas and its low-cost subsidiary Jetstar.
“Virgin Australia will be an attractive mid-range airline for customers who want good airfare and better service.”
The country’s second-largest airline said it would introduce a new food-purchase option in economy class but would retain business class seats and airport lounges in major cities. It will also continue to include checked baggage at its economy class fare. Wi-Fi and in-flight entertainment are still under review.
Virgin was removed from the stock exchange on Tuesday after Bain’s buyout closed, allowing it to exit voluntary administration.
Qantas Chief Executive Alan Joyce said he expected Virgin to appear “leaner and ruthless” given it was able to amend its charter terms as part of administrative proceedings, Australia’s closest equivalent to the US Chapter 11 bankruptcy regime.
Qantas has announced plans to achieve A $ 1 billion ($ 729.8 million) annual savings by financial year 2023 to help contain the coronavirus pandemic.
Analysts said Virgin’s market decline would give Qantas room to cut product costs or introduce fees at lower rates while maintaining its premium market position.
“We have no intention of changing Qantas products other than what we’ve been doing around COVID-19,” Joyce said in the Aviation Week webinar.
$ 1 = 1.3702 Australian dollars Report by Jamie Freed; Edited by Sam Holmes and Stephen Coates