Business travel is not coming back, says Virgin Australia CEO Jayne Hrdlicka

Business travel will not return to how it was before COVID-19, according to Virgin Australia chief executive Jayne Hrdlicka, but that will mean cheaper fares for holidaymakers.

"Business travel isn't coming back in the same way that it existed before COVID," she told the Tourism and Transport Forum's Outlook 2021 Tourism Industry Conference on Wednesday.

Ms Hrdlicka cited the rise of video conferencing as a replacement for travelling for business meetings and conferences.

"There is a structural change that will come to the way that people have travelled in the past and we have to be prepared for it."

That is likely to be bad news for airlines, which rely heavily on business travellers for revenue - not just by flying at the pointy end of the plane in premium seats, but also by purchasing more expensive flexible fares or flights at short notice in economy class.

However, it could be good news for leisure travellers, Mr Hrdlicka suggested, as airlines would need to offer cheap fares to make sure seats are filled in order to make up for the loss of business travellers.

"It will be cheaper, per seat, on board an aircraft to travel than it has been for a long time," she said. "The higher fares that business passengers paid, there won't be as many of those, (but) we still need to sell those seats. So all the seats will be less expensive than they were in the past."

Ms Hrdlicka said customer volume was the key going forward, not just for airlines, but also hotels and other parts of the tourism industry.

She said the downturn caused by the pandemic meant people needed encouragement to get back into the habit of travelling again.


"It's going to take time to build new patterns of behaviour and we're investing to make sure that it's irresistible to travel so that we can sell as many of the seats that we have on offer, get people back to normal and enjoy the experiences that they've been shut off from in the past year."

"Then over the next two to three years, we get back to a more normal environment."

Ms Hrdlicka echoed comments made by the chief executive of rival Qantas, Mr Alan Joyce, regarding Australia's vaccination rollout.

"We've all got a job to do, in making sure that we do come out of this as fast as we can," she said.

"If we were better vaccinated as a country, Melbourne wouldn't have gone into lockdown and we wouldn't have had the dysfunction that we've just been through. And so all of us have an obligation to get our jabs," she said, adding that she had received her first dose of the AstraZeneca vaccine.

She said Virgin Australia was working to ensure that every employee gets vaccinated.

"As an industry, if we don't role model great behaviour in getting vaccinated and demonstrating what it's going to take to come out of this to the other side, who will?" she said.

"We've had the most difficult time coming through this and we need to lead the way."

Virgin Australia has not yet followed Qantas' lead and introduced incentives for people to get vaccinated. Mr Joyce announced on May 31 Qantas would provide discounts, flight vouchers and frequent flyer point bonuses to passengers who had been vaccinated. He also announced major prizes of free flights for a year with the airline.

In her speech to the conference, Ms Hrdlicka did not address the issue of Australia's international border closures, which she controversially said last month should reopen once enough people are vaccinated, even if that meant "some people may die".

The comments drew criticism from several quarters, including from the Prime Minister Scott Morrison, and resulted in calls on social media for people to boycott the airline.

Virgin Australia last month announced new routes and increased capacity in the domestic market. The five new routes, Darwin-Sydney, Adelaide-Cairns, Sydney-Townsville, Melbourne-Townsville and Cairns-Perth, along with increased capacity on other routes add more than 700 flights a week to Virgin's network. The airline is also seeking 250 new staff.

See also: Rattlesnakes infest Qantas' grounded A380s in California desert

See also: Perks no more: Business travel may never come back