Is Australia’s new standard of domestic business class sustainable?

This week saw Virgin Australia’s new business class product take flight. Its mid-August introduction on Virgin’s first reconfigured Airbus A330 aircraft was exclusively confirmed by Miles Down Under on 22 June.

Virgin claims that this new product, dubbed ‘The Business’, is “setting a new standard in domestic business class around the world”. We agree. We’ve flown the top tier domestic products around the world, such as those offered by American Airlines, and see Virgin’s new product as delivering a higher standard.

Configured in a 1-2-1 reverse herringbone cabin layout, all 20 seats in ‘The Business’ have direct aisle access.

The seating is really designed for long-haul flying (indeed the same seats will be fitted to Virgin Australia’s entire Boeing 777 fleet by April 2016). The seat itself is similar to that used for Qatar Airways’ Airbus A380 and Boeing 787 business class cabins.

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Virgin’s first reconfigured A330 aircraft (registered as VH-XFH) arrived back in Sydney on Saturday, following reconfiguration in Singapore. The aircraft has quickly been pressed into service, pinging back and forth to Perth on transcontinental services from Sydney and Melbourne.

We expect another reconfigured aircraft to be flying within a week and Virgin’s sixth (and final) Airbus A330 aircraft to be off to Singapore for reconfiguration before the end of October. This consistency will give Virgin Australia a valuable advantage over Qantas. While Qantas started reconfiguring its fleet of Airbus A330 aircraft earlier, Qantas is still over a year away from finishing its competing project (albeit on a much larger fleet).

Even after the reconfiguration project is complete, Virgin Australia will still need to be careful to manage customer expectations. Otherwise passengers could book expecting ‘The Business’ and end up with Business Class on Virgin’s Boeing 737 aircraft, a vastly different proposition altogether.

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Virgin Australia A330 ‘The Business’ (picture courtesy Virgin Australia)

Unique passenger services in ‘The Business’ include the ability to dine when you want. The aircraft also feature the first ‘Nespresso by B/E Aerospace’ machines in the world.

With Virgin’s business fares starting at AU$3,798 roundtrip between Sydney and Perth, and AU$3,598 roundtrip between Melbourne and Perth, the significance of winning market share can not be understated – for either airline. At present, Qantas’ business class fares come in at about AU$100 more on either roundtrip journey.

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Virgin Australia A330 ‘The Business’ (picture courtesy Virgin Australia)

Having arguably the best domestic business class product in the world on offer right here in Australia is great for customers. The challenge for Virgin Australia is to use this to grow its premium market share on these lucrative transcontinental routes.

We will be watching with interest to see how the transcontinental premium product war between Virgin Australia and Qantas pans out. Virgin’s new ‘The Business’ seating would be competitive on long-haul international routes, so Virgin Australia always has the ability to deploy its reconfigured A330 fleet on international routes if that would be more profitable.

1 Comment on "Is Australia’s new standard of domestic business class sustainable?"

  1. Given Qantas is downgrading some services on the Coast to Coast, to redeploy it’s domestic configured A330-200s onto International routes (where that only one J toilet will hurt!), VA definately will be the airline of choice in the coming months for trips to/from Perth (the Qantas lottery will get worse, not better).

    The question will be, over the longer term, is whether the VA might also redeploy some Perth services onto other routes (Qantas cited their reason for downgrading services as the mining slow-down although I think other reasons are more in play at present). Borgetti says he has no intent to, but nothing is ever in stone in the aviation world.

    As to sustainability of the newly configured aircraft, I think they will be, it’s just a matter of using them on premium routes were margins are good. Looking forward to giving The Business an up close and personal evaluation.

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