Virgin Blue announces capacity reductions and cost-savings initiative

16 Jun 2008

1

With the fuel bill for the current fiscal year, ending 30 June, set to rise 21 per cent year-over-year, Australia's low fare airline, Virgin Blue, announced a range of capacity reductions as well as a A$50 million ($46.9 million) cost-savings package on Friday.

Fuel prices now account for 35 per cent of the carrier's total costs. According to airline officials, high fuel prices are here to stay. "It's not a case of planning interim measures to offset a spike in the cost of fuel. All airlines must come to terms with a new reality in our industry," CEO Brett Godfrey said.

Blue says that it will add on a A$50 million savings initiative to its New World Carrier strategy, which has delivered good results over the past 18 months. It is also set to increase fares by an average A$5 on around 55 per cent of domestic routes and remove four aircraft from domestic routes during the September quarter. This will equal a 6 per cent reduction in planned capacity growth.

It said that it will redeploy an additional 2 per cent domestic capacity onto more profitable routes.

Blue is also set to commence layoffs, though no details are available as yet.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more