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Branson: We were losing $10 million in Australia

Staff writer |
Richard Branson has explained Virgin Atlantic's decision earlier this month to halt operating services between Australia and Hong Kong.

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The service connected with Virgin Atlantic's Hong Kong-London flights. Mr. Branson, speaking in Dubai for Arabian Business, sid the airline had been losing about $10 million a year on the route and increased costs and a falling Australian dollar had made it unviable.

"I suspect we carried on going too long and that's always a danger in business, you hope that next year will be better than the previous yea. I love going to Australia and the idea of having to go on Qantas or British Airways is going to be very, very painful. But hopefully we'll be back one day.

"We have a great Virgin Australian airline when you get there, which has got 35% of the market, so we're just going to have a bag over our heads for that one leg, from Hong Kong onwards [from London], sadly, in the future," said Mr. Branson.

Mr. Branson also took the opportunity while in Dubai to blast airline alliances, this time taking aim at the Qantas-Emirates alliance. He said governments should have prevented partnerships such as that between Dubai's Emirates and Australian flag carrier Qantas, as well as between British Airways and American Airlines

"If you're in an alliance and you're on the same route as your alliance partner, you know what's going to happen: fares are going to go up and why should they do better service?" He blamed "weak regulators" for allowing airline alliances.