New Virgin Australia strategy spells end of business travel arms race

SYDNEY - Virgin Australia looks set to cut basic fares and start charging fees for items like checked baggage and food under new chief executive Jayne Hrdlicka, prompting a wider industry shake-up as the country’s airlines reawaken from the coronavirus crisis.

Unusually for airlines globally, both carriers include free checked baggage allowances, free Wi-Fi and complimentary food and drinks even in the cheapest economy class tickets on domestic flights. Unbundling, or charging fees for previously included services like checked baggage, seat selection, Wi-Fi, food and in-flight entertainment is a strategy that helps airlines attract price conscious travellers with a low base fare while allowing them to pay extra for chosen add-ons.

“I think at least it allows the optionality for Qantas to go downmarket,” said John Thomas, a Boston-based former senior executive at Virgin who helped introduce baggage fees in the United States more than a decade ago as an airline consultant.

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New Virgin Australia strategy spells end of business travel arms raceVirgin Australia looks set to cut basic fares and start charging fees for items like checked baggage and food under new chief executive Jayne Hrdlicka, prompting a wider industry shake-up as the country's airlines reawaken from the coronavirus crisis.
Source: Reuters - 🏆 2. / 97 Read more »

New Virgin Australia strategy spells end of business travel arms raceVirgin Australia looks set to cut basic fares and start charging fees for items like checked baggage and food under new chief executive Jayne Hrdlicka, prompting a wider industry shake-up as the country's airlines reawaken from the coronavirus crisis.
Source: Reuters - 🏆 2. / 97 Read more »