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  • Virgin Australia (VAH) has fallen in line with competitors as it slashes flight capacities for Tigerair’s domestic market
  • Domestic routes of; Coffs Harbour, Sydney, Cairns, Hobart, the Gold Coast, Adelaide, and Melbourne, will be shaved off
  • Like its competitors, and a number of business this past month, Virgin cited the cost saving to sustain an expected loss due to the coronavirus
  • The plan will be executed on April 27 in attempt to soften a possible $75 million blow
  • Shares in Virgin Australia are currently up four per cent on the Australian market and trading for 13 cents apiece

Virgin Australia (VAH) has joined a pattern of airliners around the world slashing flights to sustain profits amidst the coronavirus.

The airliner joins a lineup including Qantas and Air New Zealand which both announced this month they would decrease their capacity of flights to Asia.

In a sea of companies releasing profit round ups for the first half of the financial year, a great number have cited the global health scare of the coronavirus impacting its profits — or posing a risk for future impact.

Being the latest company to flag plans in biding the coronavirus impact, Virgin Australia will be axing five domestic routes for its Tigerair child company.

Virgin Australia also confirmed on Wednesday that it had lost $100 million in the last six months.

In this week’s media release, the airliner described the coronavirus as having a “weakening effect on international and domestic demand”.

Routes that will be cut include Melbourne to Coffs Harbour, Sydney to Coffs Harbour, Sydney to Cairns, Adelaide to Sydney, and Hobart to the Gold Coast.

These axed routes are set to help Virgin cut the fat to sustain an expected $50 million to $75 million loss in the second half of this financial year.

“There’s further work to do on costs and we will continue to review the network and our capacity in line with demand,” Virgin Australia Chief Executive Paul Scurrah said.

The flights will be officially cut on April 27, with existing ticket holders to be given alternative flights.

Impacts on the coronavirus have taken away what otherwise could have been a positive half year for Virgin Australia with its passenger numbers growing.

However, Virgin Australia has been on track for a while now to save up to $75 million a year — with 400 jobs axed by the end of March and a total of 750 by the end of this year.

Also revealed today, Virgin Australia achieved a first half revenue of $3.11 billion — compared to $3.07 billion on the year prior.

Despite the mixed news, shares in Virgin Australia are currently up four per cent and trading for 13 cents at 11:06 am AEDT.

VAH by the numbers
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