By James Wilkinson

The business travel market is top of the list for Virgin Blue, following today’s announcement of a range of changes on both domestic and international services that includes the introduction of widebody Airbus A330 aircraft to Perth from the east coast.

Premium Economy could be replaced with business
class on Virgin Blue flights

The changes include the introduction of two wide-body Airbus A330 aircraft for use on services to Perth from the east coast; the axing of V Australia flights to Fiji, Thailand and South Africa in favour of increased services to Los Angeles and new services to Abu Dhabi; a code-sharing partnership with UAE-based Etihad Airways; the potential introduction of business class on domestic routes; and the dumping of Embraer E170 aircraft on short-haul sectors.

Virgin Blue CEO John Borghetti said the changes were made following the airline’s latest network review and would give the carrier a greater chance at not only picking up a greater share of the business travel market, but capitalising on the airline’s popularity amongst leisure travelers.

“We have huge opportunities going forward (and) we have to move away from the reliance of the leisure market,” he said.

The introduction of Airbus A330-200s to Perth from the east coast in May 2011 is a major indication Virgin Blue is serious about challenging Qantas’ 90% share of the government and corporate travel market in Australia.

While Borghetti declined to comment on the product to be offered onboard, he did say guests would be “very comfortable” at the pointy end of the aircraft and an “enhanced flight experience” would be offered across the board.

He also refused to rule-out the removal of Premium Economy on Virgin Blue’s fleet of Boeing 737 and Embraer E170 and E190 aircraft, instead saying an announcement would be made about onboard product “in the not-too-distant future”.

However, industry insiders expect Virgin Blue to soon be flying two-class – business and economy – aircraft across the board, with business to replace premium economy.

Either way, the arrival of the A330 on trans-continental routes is a major change for an airline that originally chased the low-cost market with single-aisle Boeing 737s.

“The Airbus A330-200 will truly be a game changer,” he said. “This aircraft type is perfect for growing our fleet and network capabilities.

“The first A330-200s will operate services between Perth and the east coast of Australia enabling Virgin Blue to grow available capacity, especially at peak times, extending the airline’s appeal to business travelers.

“This is a major step in our ‘Game Changing Program’ that will enhance our domestic and international capability by providing wide body aircraft on the transcontinental routes and a gateway to a more comprehensive international long haul network through our new partnership with Etihad,” he said.

An increase in domestic capacity is also on the cards for Virgin Blue, with a 6-8% increase announced for FY2011.

However, some regional routes could be axed or upgraded, with Borghetti confirming aviation industry speculation that the 78-seat Embraer E170 aircraft would be removed from the Virgin Blue fleet.

“We are reviewing the Embraers – the E170s in particular,” he said. “It’s not an economically-viable aircraft, for the missions we fly to its not appropriate and we intend to sell them.”

Currently, the fleet of six Virgin Blue Embraer E170s are being on used on routes between Sydney and Canberra, Sydney and Port Macquarie, and Melbourne and Mildura amongst others.

For a full report on the changes to V Australia and the Etihad Airways tie-up, click here.