Virgin Australia has revamped its economy class offering to create three new types of fares, including a no-frills "seat only" option.
The "Economy Lite" fare will not include checked baggage, which previously had come standard with Virgin's economy fares. Economy Lite passengers will also have to pay for the ability to choose their own seat.
Economy Lite passengers are also unable to bid for an upgrade using the airline's UpgradeMe service, but they will be able to earn Velocity frequent flyer points from flights.
The two other classes are Economy Choice and Economy Flex, both of which include checked luggage and the ability to upgrade. Economy Lite passengers will face an $80 fee for flight changes made by the passenger up to the day before their flight. They will lose their fare if they wish to change to another flight on the day of departure.
Choice passengers can make fee-free changes up to two weeks before departure, while Flex passengers can make changes right up to their departure.
In a statement, the airline said it was bringing in the new fares based on research that showed 30 per cent of its passengers did not bring checked luggage on flights.
"On flights between Melbourne, Sydney and Brisbane, that number is even higher," a spokesperson said.
The airline's now defunct subsidiary, Tigerair, previously sold similar fares where baggage and food cost extra. With its new fares, Virgin will be seeking to compete for budget flyers with Qantas' low-cost carrier Jetstar, which also charges extra for checked baggage. Air New Zealand has offered a similar seat-only budget fare on its flights between Australia and New Zealand for many years.
Complimentary tea, coffee and water will be served to Economy Lite passengers, but food must be purchased from the on board menu. Food must also be purchased by Choice and Flex passengers.
The airline scrapped complimentary food for economy passengers in March this year, with Virgin chief executive Jayne Hrdlicka saying the free snacks were not valued by customers. The airline claimed its research showed economy passengers would prefer to choose their own food and beverage from a for-purchase menu on domestic flights, rather than receive a pre-determined snack.
Virgin Australia collapsed last year due to the downturn in travel caused by the pandemic. It was resurrected by investment firm Bain Capital after laying off thousands of staff and shutting down Tigerair.
Earlier this week, the airline announced it would reopen its VIP Club lounges, under a new name, in Melbourne, Sydney and Brisbane in the first quarter of 2022. However, its Club lounges in Adelaide and Perth would be closing permanently, due to high operating costs and low visitation. The airline's domestic lounges remain open. Alternative options for Club members travelling through Adelaide and Canberra were being explored.
Virgin followed Qantas in standing down staff earlier this month after lockdowns in Sydney and Melbourne saw domestic passenger numbers plummet.