Summary
- Virgin Australia’s quick approval for more seats to Vanuatu leaves the door open for Qantas to join in.
- Air Vanuatu’s grounding has opened up opportunities for other airlines like Virgin Australia to increase capacity.
- VA was granted 1,304 weekly seats for additional services between Australia and Vanuatu, securing a strong position.
Gaining additional air rights on international routes can be a long and drawn-out process, particularly if there are objections or competing airlines bidding for more seats on a route. Fortunately, that has not been the case with Virgin Australia’s application for more capacity between Australia and Vanuatu, which received the regulatory green light just 18 days after it was lodged.
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A longer-term solution for Vanuatu
When Air Vanuatu placed itself in voluntary liquidation and handed control to financial administrators on May 9, 2024, its fleet was grounded, although even before that, its only Boeing 737 jet was already out of action in Melbourne. The grounding stranded thousands of tourists and locals, and when the full extent of Air Vanuatu’s problems became known, the race was on to secure flights to resume connections to major destinations in Australia, New Zealand, Fiji and other Pacific Islands.
Photo: Ryan Fletcher/Shutterstock
With Air Vanuatu grounded, Virgin Australia (VA) was the only carrier connecting Australia and Vanuatu with a weekly Boeing 737 service from Brisbane Airport (BNE) to Vanuatu’s Port Vila Bauerfield Airport (VLI). The airline quickly increased that service to twice weekly, and on May 10, it lodged an application with the Australian Government’s International Air Services Commission (IASC) to increase capacity between the two countries.
VA applied for an allocation of 1,304 seats weekly to operate an additional seven Boeing 737 services per week between Australia and Vanuatu from July 2024. The airline also said it would use the extra capacity to change aircraft configuration from 176 to 182 seats on the existing service on the Brisbane to Port Vila route.
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Last week, VA confirmed it intended to use the capacity to operate up to three weekly services between Sydney and Port Vila, increasing to up to five weekly services from the Northern Winter 2024-25. The airline also confirmed it intends to operate up to an additional two services per week from Brisbane to Port Villa.
The Commission invited other applications and received no competing applications, although it did receive an application from Qantas/Jetstar on May 21 seeking an allocation of 1,798 weekly seats between Australia and Vanuatu. Before the application judgment, Virgin Australia had a total allocation of 880 weekly seats.
Virgin Australia has what it wanted
There are 3,120 seats per week available for allocation to Australian designated airlines to operate passenger services between Vanuatu to four Australian destinations: Sydney, Melbourne, Brisbane and/or Perth. The Commission said that Australian designated airlines may determine the frequency of service, capacity and aircraft type to be operated to or from points in Australia other than Sydney, Melbourne, Brisbane and/or Perth
Photo: Virgin Australia
On May 28, the IASC published a Determination that Virgin Australia satisfies the relevant criteria, and the Commission decided to allocate the capacity as requested by the airline. The Determination is valid for five years from May 28, 2024, and is subject to the following conditions:
- Only Virgin Australia International Airlines Pty Ltd [VAIA] is permitted to utilize the capacity.
- VAIA is required to fully utilize the capacity no later than December 31, 2024, or such other date approved by the Commission.
- VAIA is not permitted to utilize the capacity to provide codeshare or joint services with another Australian carrier or any other person unless approved by the Commission.
- There was another condition relating to any changes in ownership or control of VAIA that would need to be approved by the Commission.
With a total of 3,120 weekly seats available on the route, granting 1,304 to VA leaves just 1,816 open for allocation. Looking to squeeze as much out of the situation as possible, Qantas has applied for 1,798 seats, which will create a cozy duopoly on the route eerily similar to the one in the Australian domestic market.
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