VIRGIN BACK IN THE BLACK

Written on the 6 February 2015 by Jenna Rathbone

VIRGIN BACK IN THE BLACK

VIRGIN Australia Holdings Limited (ASX: VAH) has reported an underlying profit before tax of $55.3 million for the second quarter of the 2015 financial year. 

This result represents a $47.6 million improvement on the prior corresponding period, with the company believing the benefits from falling oil prices will continue to assist with further growth during the second half of the year.

VAH chief financial officer Sankar Narayan says the result is a turnaround on the seasonally weaker first quarter, where the company reported a $45 million underlying pretax loss.

"We are delivering on our plan to maintain our cost advantage through the disciplined execution of our cost reduction program, while continuing to drive revenue growth from the Corporate, Government and Charter Market segments," says Narayan.

"These cost reduction benefits are being realised while we continue to improve the customer experience."

He says the company continues to witness some improvement in domestic trading conditions.

"However consumer sentiment has been relatively weak and international yield recovery has been constrained by continued pressure in the South East Asian and Europe/United Kingdom markets," says Narayan.

VAH reported an increase in domestic capacity by 1.4 per cent compared from the previous year, while the percentage of seats filled in the domestic market fell by 0.4 percentage points to 78.1 per cent in the second quarter.

In addition, VAH announced today it has acquired the remaining 40 per cent stake of Tiger Airways Australia and as a result, now owns and controls 100 per cent of the company.

As part of the acquisition, Virgin has secured the brand rights to fly Tigerair to a number of short-haul international destinations.

Virgin says this will provide further growth opportunities and additional flexibility for the business.

"The completion of this acquisition marks the next phase of Tigerair Australia's evolution in the Australian market and represents an important step in its pathway to sustainable profitability," says Narayan.

"We remain focused on maintaining Tigerair Australia's low cost business model and a separate brand, while ensuring there is a viable low cost alternative in the market for consumers."

Tigerair reported a $500,000 profit in the second quarter, up from a $15.5 million loss in the first quarter.

The partnership between Virgin and Tigerair will continue through brand licensing and certain services which will continue to be provided by Tiger Holdings to Tigerair Australia.


Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.
Connect via: Twitter

Latest News

ASF UNVEILS TRAFFIC PLANS FOR THE SPIT

A SECOND bridge over the Nerang River is the centrepiece of the ASF Consortium's plan to improve traffic flow ...

BHP AND VALE EDGE CLOSER TO $47.5 BILLION SAMARCO DAM DISASTER SETTLEMENT

BHP Billiton (ASX: BHP) and Brazilian mining company Vale have entered into a preliminary agreement with Brazilian fe...

BLK SPORT FOUNDER TYRON BRANT REMAINS CEO UNDER NEW OWNERS

BLK Sport has been purchased from receivers McGrathNicol by a private consortium composed of a TimorLeste-based oi...

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter