Virgin Australia to exit Phuket
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Virgin Australia to exit Phuket

Virgin Australia will end flights from Perth to Phuket from February, saying the market was "just not big enough" to make the service viable.

The announcement on Friday came as the company reported that losses from international flights had widened to A$69 million, the Sydney Morning Herald reported.

The airline will also stop flying from Adelaide, Melbourne and Perth to Bali from March, and instead use its budget affiliate Tigerair on those routes, after deciding it is better suited to a no-frills carrier.

The change would pit Tigerair directly against AirAsia and the Qantas budget offshoot Jetstar on routes to the popular Indonesian tourist destination.

As part of the overhaul, Virgin said it would redeploy the Boeing 737 aircraft it has used for flying to Bali and Phuket to trans-Tasman routes including Sydney to Christchurch and Melbourne-Christchurch.

The airline's international operations reported an underlying pre-tax loss of A$69 million for the fiscal year to June 30, compared with a $49-million loss a year earlier.

Virgin said it expected the international business to be profitable by the end of the 2016-17 financial year. 

Overall, Australia's second-largest airline lost A$94 million, an improvement from a loss of $356 million the year before.

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