Virgin Atlantic's profit soars thanks to BA's troubles
Wednesday August 27, 2008
Virgin Atlantic yesterday reported a net profit for the year ended Feb. 29 of £47.7 million ($88.2 million), up from £6.6 million the previous year, citing a surge in business travelers at Virgin Atlantic Airways.
Pre-tax profit before special items, which included £32.5 million in provisions for the refund of passenger fuel surcharges as part of a court settlement for colluding with British Airways on long-haul flights (ATWOnline, Aug. 8), rose 38% year-over-year to £60.9 million. The company received a £9.1 million boost from its minority investment in Virgin Nigeria (ATWOnline, Aug. 20). Group revenue rose 9.1% to £2.34 billion.
Passenger numbers increased 7.6% to 5.7 million as VS expanded its number of destinations to 30. Premium passengers rose 22% during the year, and Virgin claimed it "took market share from BA and other carriers."
Pre-tax profit for the fiscal first quarter ended May 31 came in at £23.5 million compared to a loss of £1.2 million in the year-ago period. Revenue jumped 16% to £645.3 million and load factor gained 2.2 points to 77%. Virgin said results were partly strengthened by a "T5 effect," which saw it win "passengers from BA because of the ongoing problems at their new Heathrow terminal."
CEO Steve Ridgway said, "While the outlook remains pretty overcast for the aviation industry, the winners will be those airlines that focus on offering the best customer service and which are nimble enough to take advantage of the opportunities that lie ahead. Our strategy of slowing our growth has paid off in time for the slowdown in the industry." He claimed the group is "well-placed to succeed over the coming months. We have diversified our route network, focused on providing the best product in Upper Class, Premium Economy and Economy, hedged our fuel purchasing and built up a strong cash position."
Virgin said its cash position at the end of the fiscal year was nearly £600 million and grew to £838 million at the end of June, raising speculation it might once again try to acquire bmi. The latter recently valued itself at £750 million after including, for the first time, the value of its slots at LHR (ATWOnline, May 26).
by Cathy Buyck
ATWonline
Wednesday August 27, 2008
Virgin Atlantic yesterday reported a net profit for the year ended Feb. 29 of £47.7 million ($88.2 million), up from £6.6 million the previous year, citing a surge in business travelers at Virgin Atlantic Airways.
Pre-tax profit before special items, which included £32.5 million in provisions for the refund of passenger fuel surcharges as part of a court settlement for colluding with British Airways on long-haul flights (ATWOnline, Aug. 8), rose 38% year-over-year to £60.9 million. The company received a £9.1 million boost from its minority investment in Virgin Nigeria (ATWOnline, Aug. 20). Group revenue rose 9.1% to £2.34 billion.
Passenger numbers increased 7.6% to 5.7 million as VS expanded its number of destinations to 30. Premium passengers rose 22% during the year, and Virgin claimed it "took market share from BA and other carriers."
Pre-tax profit for the fiscal first quarter ended May 31 came in at £23.5 million compared to a loss of £1.2 million in the year-ago period. Revenue jumped 16% to £645.3 million and load factor gained 2.2 points to 77%. Virgin said results were partly strengthened by a "T5 effect," which saw it win "passengers from BA because of the ongoing problems at their new Heathrow terminal."
CEO Steve Ridgway said, "While the outlook remains pretty overcast for the aviation industry, the winners will be those airlines that focus on offering the best customer service and which are nimble enough to take advantage of the opportunities that lie ahead. Our strategy of slowing our growth has paid off in time for the slowdown in the industry." He claimed the group is "well-placed to succeed over the coming months. We have diversified our route network, focused on providing the best product in Upper Class, Premium Economy and Economy, hedged our fuel purchasing and built up a strong cash position."
Virgin said its cash position at the end of the fiscal year was nearly £600 million and grew to £838 million at the end of June, raising speculation it might once again try to acquire bmi. The latter recently valued itself at £750 million after including, for the first time, the value of its slots at LHR (ATWOnline, May 26).
by Cathy Buyck
ATWonline
