VIRGIN FLIES THROUGH DIFFICULTY AND NARROWS LOSS

Written on the 19 February 2015

VIRGIN FLIES THROUGH DIFFICULTY AND NARROWS LOSS VIRGIN Australia Holdings (ASX: VAH) has flown through what CEO John Borghetti describes as "one of the most difficult years in Australian aviation history" to post an underlying profit before tax of $10.2 million, an improvement on a loss of $45.4 million in the prior corresponding period.

The after tax statutory loss of $47.8 million is down from last year's $74.3 million half year loss.

Total group revenue for the period increased six per cent from the prior corresponding period to $2.4 billion, with leisure and international segments remaining constrained, but the business segments of corporate and government, charter and interline and codeshare seeing growth.

Borghetti says the company is on track for corporate and government to comprise 30 per cent of domestic revenue by end of fiscal year 2017, with this goal supported by the recent Conde Nast accolade of VAH being one of the top 10 airlines in the world for business travel. 

The company has achieved a turnaround in Tigerair Australia performance, following the acquisition completion last week, and also increased numbers in its Velocity Frequent Flyer program through new major partnerships with Australia Post, Aussie Home Loans and BP, and turned focus to its charter business to a rewarding result.

VAH CEO John Borghetti says the group has been successful in achieving growth in spite of blows to consumer sentiment.

The company also reports to have benefitted approximately $3 million from the decline in oil prices, but Borghetti commented this was lower than the benefit from the previous corresponding period due to the decline in the Australian Dollar.

"We have succeeded in driving domestic yield growth despite ongoing subdued consumer sentiment which continues to impact overall demand," says Borghetti.

"The performance of the international business has been impacted by increased competitive pressure in key international markets.

"Virgin Australia Group saw a benefit of approximately $3 million from the decline in oil prices in comparison to the first half of the 2014 financial year.

"Based on our current hedging position and market rates, we expect to see further benefit in the second half of the 2015 financial year.

"We should see a pricing benefit in the second half of around $50 million, if the oil price remains at current levels."

Borghetti says the company expects an improved performance in the second half of the 2015 financial year compared to the prior corresponding period, but due to current market conditions, cannot provide more specific guidance.



Latest News

KOPLOVITZ GIVES SPRINGBOARD TO AGILE ENTREPRENEURS

FOR Kay Koplovitz, the key to being a successful entrepreneur is an agile mind - one that is always learning and q...

VITA GROUP SHARES SURGE UPON RESULTS

VITA Group (ASX: VTG), the Brisbane telco retailer tied up with Telstra (ASX: TLS), saw its share price surge 12 p...

SONAND TURNS THE TIDE AT SURFSTITCH

SURFSTITCH (ASX:SRF) has reduced its losses in the first half of FY17 as new CEO Mike Sonand executed his turnaround ...

EUREKA IMPROVES WHILE MANAGEMENT REMAINS UNIMPRESSED

EUREKA Group has collected the gains on its 'buy and build' strategy to achieve a net profit of $6.29 mill...

Related News

KOPLOVITZ GIVES SPRINGBOARD TO AGILE ENTREPRENEURS

FOR Kay Koplovitz, the key to being a successful entrepreneur is an agile mind - one that is always learning and q...

FASHION RETAILER'S TAKEOVER IN DOUBT AS PROFIT CLIMBS

IN the thick of takeover talks, Specialty Fashion Group (ASX: SFH) worked hard to cut costs and see its bottom lin...

HOW TO TAKE CONTROL OF YOUR CAREER THROUGH TRAINING

GIG economy, remote working, and freelance Friday are more than just buzz terms; our workforce is changing, and so...

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter