Virgin Atlantic retreats from Australia

Tail off: Virgin Atlantic is abandoning its Heathrow-Sydney route (PA)

Virgin Atlantic has blamed the weakening Australian dollar for its decision to abandon flights to Sydney. Sir Richard Branson’s airline currently flies daily from Heathrow to Australia’s largest city via Hong Kong, but will end the service on 5 May. Thousands of passengers are booked to travel after that date. The airline says it is seeking to place them on alternative flights: “We are in discussions with airlines in regards to reprotecting ticketed passengers affected by the intended withdrawal.”

Competition between the UK and Australia is intense, with more than a dozen airlines offering services via a Middle Eastern or Asian hub. Dubai is now the main transit point between the two countries.

Craig Kreeger, the airline’s chief executive, said: “Despite the best efforts of our employees, external factors such as increasing costs and a weakening Australian dollar have affected our profitability.

Mr Kreeger was brought in to stem the airline’s heavy losses. He has vowed to make Virgin Atlantic profitable by the end of the year.

Virgin Atlantic’s link to Hong Kong will continue. A spokesman for British Airways said the airline had no plans to end its daily service from Heathrow to Sydney.