Up, up and away: Virgin chief says airfares are a matter of demand versus supply

Virgin has warned airfares are likely to continue to rise as demand outstrips supply and tourism operators talk of huge surge in domestic travel activity.

Sep 01, 2022, updated Sep 01, 2022
Virgin Australia CEO Jayne Hrdlicka has revealed her personal tragedy after the death of her husband. (File image).

Virgin Australia CEO Jayne Hrdlicka has revealed her personal tragedy after the death of her husband. (File image).

At a BNE Enterprise function on Thursday, Virgin chief executive Jayne Hrdlicka said the airline was now back to 2019 levels in flight completions and on time performance.

It had also doubled its staff numbers since 2020 to 7000 and was predicting even more growth as it brings on new aircraft.

“We are fighting fit. Australia is back and flying,” she said.

“We are in a period in which demand is much higher than supply so prices have gone up. Fuel prices have gone up and we have inflation embedded in the business.

“So there will be price increases that help us offset inflationary pressure.”

While the sector had been hit by cancellations and reduced capacity, Hrdlicka said Virgin’s goal was “to get volumes back by Christmas.”

She said the company had doubled its staff numbers to 7000 since 2020 and would continue to add more as new aircraft were brought on. It had also recently signed a 10 year lease on its Brisbane headquarters so the expectation was that it would stay in the city.

Brisbane Airport also said it planned $5 billion in investment in the precinct over the next decade, including a new terminal, to cope with the expected growth in the city’s tourism.

But the huge growth being witnessed is pushing against community boundaries and aircraft noise over Brisbane’s suburbs had become a key issue.

The airport’s chief executive Gert-Jan DeGraaff said while the noise issues were real caps and curfews were not the answer and their impact could be as much as $1 billion to the state economy and 9000 jobs.

DeGraaff said the domestic airport was at about 85 to 90 per cent of pre-Covid levels and during peaks it was more than 100 per cent. The international terminal was impacted by low capacity and was still at about 45 to 50 per cent of pre-Covid levels.

He said the increase in travel had come back faster than expected. In March, it had 20,000 people a day through the airport. In July it was 50,000 a day.

Hrdlicka said there was an expectation that Virgin would eventually have an initial public offering.

“Long term capital management will be really important to Virgin. Over time I can imagine we would go through an IPO. Whenever that happens it will be driven by financial markets,” she said.

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