Virgin Australia exec flags further B737-MAX order

By Andrew Curran.

Virgin Australia is eyeing another aircraft order as it admits its single-fleet model is hampering its ability to expand into domestic regional markets. However, airline executives told a Senate committee in Canberra last week that there were no plans to move away from Virgin’s existing aircraft platform.

Speaking at an Australian Government Senate Committee hearing into the state of the country’s aviation sector on October 16, Chief Financial Officer Race Strauss said the airline “will be looking at a further order in the near future”.

His comments followed questioning about Virgin Australia’s inroads, or lack thereof, into regional routes in Australia.

Virgin Australia had a 33.3% domestic market share in July 2026, according to the Australian Competition and Consumer Commission. The airline primarily serves inter-capital trunk routes and Queensland’s larger coastal cities. Airports served outside this catchment include Alice Springs (ASP), Launceston (LST), Newcastle (NTL) and Mount Isa (ISA).

The airline also has a short-haul international network and extensive charter operations in Western Australia, primarily served by its sibling carrier, Virgin Australia Regional Airlines.

B737 family fleet hampers expansion into regional markets

Except for five E190-E2s based in Perth (PER), with another three due to arrive, Virgin Australia operates its network using B737 family aircraft. It has just taken delivery of the last of a batch of twenty-six B737-8s. These operate alongside the carrier’s seven B737-700s and seventy-two B737-800s. The airline operates around 700 flights per week to 43 airports.

“Our business model is premised around simplicity,” Chief Customer Officer Andrew Cleary told the same hearing. He said part of that simplified business model was based on the “streamlined” B737 platform.

The long-running Senate committee hearings have focused on the parlous state of regional aviation and regional airports. It is a market Virgin Australia has largely vacated since it stopped operating ATR72s in early 2020. The airline has since restructured after filing for bankruptcy and been sold to a new owner, Bain Capital.

“Our approach to regional aviation is focused on long-term sustainability and partnerships,” said Cleary. “Virgin does not seek to operate to every regional port or every route directly. Where demand supports our aircraft type and the operating model, we compete through our own services.”

The problem for Virgin Australia is that B737s are simply too large to serve most regional airports in Australia. Bain, its profit-focused majority shareholder, has no interest in diversifying the fleet and taking on the associated costs, even if doing so would allow the airline to serve more regional markets.

“We exist as a company to make money for our shareholders,” added Cleary. “It’s not currently in our contemplation to enter a new regional sub-fleet.”

Existing B737-10 order may be converted to B737-8s

The impending order flagged by Strauss is likely to involve more MAX aircraft. Another ten are due from next year, under a separate order from the B737-8s already delivered. The airline has previously said the next batch of deliveries could be B737-10s. At the hearing, Strauss confirmed that all or some of those ten aircraft could instead be converted to B737-8s.

“They will either be the MAX 10 variant… or they’ll be MAX 8s,” he said. “We need to make that decision.”

Asked which new regional routes Virgin Australia had launched recently, Cleary referred to Virgin Australia aircraft taking over services to ports such as Newcastle (NTL), Rockhampton (ROK) and Mount Isa (ISA) that the airline had operated on using wet-leased Alliance Airlines aircraft. But he was unable to name a recent new regional route the airline had entered.

“We’re looking for new pairings,” Cleary said. “But many of the routes that are not currently served would require an aircraft type that we don’t have.”

In contrast, Virgin’s executives did come armed with a list of routes the airline has vacated in recent months. These included Adelaide (ADL) – Cairns (CNS), Yulara (AYQ) – Brisbane (BNE) and Adelaide –  Hobart (HBA) in July; Apia (APW) – Brisbane in August; and Yulara – Brisbane and Yulara – Melbourne (MEL) later this month. The seasonal Launceston – Perth (PER) flights have also been discontinued.

Cleary said there was insufficient demand on the Launceston – Perth and Adelaide – Hobart routes. He said demand was also low on the other cancelled services but added that Virgin could probably have “stuck it out” were it not for rising jet fuel prices, which had made the services “completely unsustainable”.

“Routes need to generate sufficient returns not only to operate today, but to support reliable and resilient services over time,” Cleary said. “Airlines are facing higher costs… and even relatively modest additional costs can materially affect the viability of a marginal route.”

Photo: Virgin Australia.
Contact the writer: andrew@aerosouthpacific.com