Industry players think a narrower focus on the domestic market offers the best model for a revival of the airline once people begin flying again.

A new owner should be able to find solid upside once the coronavirus pandemic passes.
“I think they’ve got plenty of opportunity,” he said.
‘Watched in horror’
Chris Corrigan, a former chairman of Virgin Blue from 2003 to 2006, said the airline should go back to basics and he was horrified at how it later expanded the different types of planes it operated, and the number of routes covered, after transforming into Virgin Australia.
He said while there was a strong business case for a second airline in Australia, that position might be taken by a new entrant offering a completely different business model.
“There is no shadow of a doubt that there will be a second airline in Australia,” he said on Wednesday.
“The government was absolutely right to seek a market solution. The government should not step in every time someone has a problem and wants a bailout.”
Mr Corrigan says he watched in “horror” as Virgin Australia changed its business model and the number of routes it flew, as the number of different types of planes it owned “exploded”.
When it was Virgin Blue, the airline had only one type of aircraft, flew a limited number of routes and only offered one class of service.
Peter Harbison, chairman emeritus of industry analyst CAPA Centre for Aviation, said the best model for Virgin Australia was to be a full-service domestic carrier in the medium term.
Some ”virtual” international add-on options in the future by linking in with the planes of other offshore carriers could then be looked at.
Domestic the only way to go
He said the local market was likely to be the first to improve by next year, and would be profitable because of substantial pent-up demand and limited international options to people because of international restrictions.
“The only model that is really going to work in the short term is domestic,” Mr Harbison said.
But it still needed to be a full-service offering, with business customers part of the model. “You can’t afford to leave 100 per cent of the corporate market to Qantas.”
Mr Harbison said a reborn Virgin couldn’t compete as a low-cost budget airline, and that was why it had transformed from Virgin Blue to Virgin Australia.
Virgin Australia’s domestic business generated $3.9 billion in revenue and $437 million in earnings before interest, tax, depreciation and amortisation in 2018-19. Administrators from Deloitte are in control of the operations now after being appointed by the Virgin board on Monday night, and hope to complete a sale process by June 30.
A separate entity, Virgin Australia International, was set up six years ago after Virgin Australia’s foreign owners went above 51 per cent. The separate entity provided a work around, endorsed by the federal government, to allow the foreign-owned airline to keep flying internationally. More than 90 per cent of Virgin is controlled by Singapore Airlines, Etihad Airways, Chinese conglomerate HNA Group, and Sir Richard Bransons Virgin Group,
Virgin Australia International holds the international charters to Hong Kong, Canada, the United States, Bali, Tonga, Fiji, New Zealand and Japan. The US routes and New Zealand have been particularly profitable.
The board is chaired by Graham Bradley, and counts Tony Shepherd and Lindsday Tanner as directors and has responsibility for the safety and regulatory aspects, though the operations are subcontracted to Virgin Australia.
Virgin International Australia is now, like Virgin Airways, in voluntary administration, having never been profitable and entirely reliant on Virgin to operate. The decision to place that entity in administration was made immediately after Virgin Australia was placed in administration.
Sone of the restructuring options could include relinquishing some of the international landing rights, a source said, which could either be sold or given up. However, they are considered an important feeder for domestic traffic.
Virgin Australia has a fleet of 132 planes, with 63 of them owned by the company and 69 leased.