Virgin Australia chief Jayne Hrdlicka says flying between Cairns and Tokyo’s Haneda Airport provides the airline with a better and more unique tourism opportunity than if it were to run flights from Queensland capital Brisbane.
The Cairns-Haneda service will launch next June after a three-year delay due to COVID-19 and a trip into voluntary administration, and means the carrier finally achieves a long-held ambition to operate flights to Japan.
Virgin under its previous management had planned to start flying from Brisbane to Tokyo in March 2020. However, the emergence of COVID-19 delayed the launch. A month later, Virgin called in the administrators.
Virgin, which is now owned by US private equity giant Bain Capital and run by Ms Hrdlicka, announced on Wednesday that it would instead run the service from Cairns when flights begin on June 28 next year.
“We know the Japanese market is hugely important to trade and tourism in Far North Queensland and the Sunshine State, and our service will result in more international visitors arriving in Cairns every year, having a very positive impact on the state’s economy,” Ms Hrdlicka said.
The service will operate with Virgin’s new Boeing 737-8 MAX jets, about 30 of which have been ordered and which are set to enter its fleet from next year. The flights will run daily, offering about 2000 seats a week.
‘It was just irresistible’
Ms Hrdlicka told The Australian Financial Review a “combination of things” had led to the decision to ditch the Brisbane-Haneda flight, saying there was a “very significant tourism” opportunity in flying from Cairns.
“We looked at the competitive dynamics in the marketplace and figured out where we think the supply and demand imbalances exist, and therefore really think about where we can open up and opportunity that is unique,” she said.
“It was just irresistible to use Far North Queensland as the opportunity to open up Australia to Haneda. It is unique; it has never been done before. There is pent-up demand here.”
Ms Hrdlicka said there was inbound demand from Japanese tourists looking to explore Far North Queensland and the Great Barrier Reef, and did not believe moving the flight away from a capital city would cause any shortfall in outbound demand.
“Outbound demand from Far North Queensland is pretty significant. You would expect us to do quite a lot of research and modelling on this. We think there is both-ways directional demand,” she said.
The Financial Review
previously reported Virgin Australia’s strong interest in flying to Japan, and Ms Hrdlicka said in October the airline would expand its international offering when its new jets arrived.
It will be the longest route in Virgin’s network.
The airline currently flies only short-haul international routes in the Asia-Pacific to places such as Bali and Fiji and allows customers to book longer trips via overseas airline partners such as United, Qatar and Singapore Airlines.
Queensland Tourism Minister Stirling Hinchliffe said the new route showed the benefit of the state’s $200 million Attracting Aviation Investment Fund, which Virgin used to start the Cairns-Haneda route.
“Japan is an important part of our inbound international tourism recovery plan for iconic destinations like Cairns and Tropical North Queensland,” he said.
“Virgin Australia direct from Japan is terrific news for tourism operators, generating almost $70 million for the Tropical North’s visitor economy and supporting 680 good Queensland jobs.”
Article courtesy Australian Financial Review 14/12/22
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