Sir Richard Branson's Virgin Atlantic has axed flights between Sydney and Hong Kong. Photo: Emile Wamsteker
Richard Branson's Virgin Atlantic will ditch daily flights between Sydney and Hong Kong in May, blaming increasing costs and a challenging economic environment.
The decision to end flying to Australia after almost 10 years will be a fillip for Virgin's rivals on the route, Qantas and Hong Kong flag carrier Cathay Pacific.
Virgin Atlantic chief executive Craig Kreeger said external factors such as increasing costs and a weakening Australian dollar had affected the airline's profitability on the route.
"These are still difficult times for the airline industry and as part of our strategy to operate more efficiently, we need to deploy our aircraft to routes with the right level of demand to be financially viable," he said.
The decision is set to result in job losses at Virgin Atlantic's operations in Sydney and Hong Kong.
Virgin Atlantic employs 47 ground crew and office staff in Sydney.
A spokeswoman said it would take up to a month before it was known how many staff would be made redundant as a result of the decision to ditch services to Australia.
The severing of links to Sydney also threatens the jobs of 158 cabin crew who are based in Hong Kong.
It leaves British Airways as the last major European airline to still fly to Australia.
The airline's final flight from Sydney to Hong Kong will be on May 5, and it advised passengers booked to fly on its services after that date to contact it or travel agents to discuss alternatives.
It will continue to fly between Hong Kong and London's Heathrow Airport.
When Virgin Atlantic first began flying to Sydney in December 2004, Sir Richard talked up the possibility of his airline eventually flying to other Australian destinations including Melbourne with A380 superjumbos.
But those plans never came to fruition, and more recently the airline has faced intense competition on routes between Australia and Europe from Middle Eastern airlines Emirates and Etihad.
Chinese airlines such as China Southern have also opened up a new way of flying to Europe via mainland China in recent years.
Qantas stopped flying between Hong Kong and London in 2012, and Virgin Atlantic's withdrawal leaves Cathay Pacific as the only airline flying from Australia to London via the Asian financial hub.
Sir Richard's Virgin Group has a 51 per cent stake in the British airline. The rest is owned by American airline Delta.
Sir Richard was the co-founder of Virgin Blue, which started flying on domestic routes in Australia with just two Boeing 737 aircraft in August 2000.
The airline has since been renamed Virgin Australia, and reshaped itself as an upmarket competitor to Qantas under the leadership of chief executive John Borghetti.
Sir Richard has a stake of about 12.5 per cent in Virgin Australia but has indicated he eventually intends to sell down his holdings in this country's second-largest airline.
Virgin Australia has a 60 per cent stake in ultra low-cost airline Tigerair Australia.
Virgin Australia is a separate entity to Virgin Atlantic, which is Sir Richard's flagship carrier.