VIRGIN TAKES OFF WITH PROFIT

Written on the 11 February 2016

VIRGIN TAKES OFF WITH PROFIT VIRGIN Australia Holdings (ASX: VAH) has lifted its profit and revenue, with a surge in fare prices delivering a boost.

The group reported its strongest statutory profit after tax in six years, $62.5 million, an improvement of $110.3 million on first half financial year 2015.

Virgin Australia CEO John Borghetti says revenue per seat delivered 'very strong growth'.

"Yield growth was also significant, the result of attracting more corporate and government travellers during the half," he says.

"For Virgin Australia International, RASK growth continued, despite a $19.2 million impact due to volcanic activity in Bali.

"The business remains on track to deliver a profit by the end of the 2017 financial year."

Velocity, Virgin's frequent flyer program, experienced an average daily join rate of almost 2600 members over the period to see its membership grow to 5.7 million and revenue and underlying EBIT margin improve.

Virgin has sustained its lead in domestic on time performance for 15 consecutive months over its 'major competitor'.

Further, Virgin has commanded an ability to charge 9.1 per cent more for the average airfare as it attracts more corporate and government business.

This goes hand in hand with Virgin maintaining a strict discipline on costs, decreasing cost per available seat kilometre (CASK) by 1.5 per cent on the prior corresponding period.

Virgin's international division, impacted by volcanic activity in Bali, experienced a loss again. International underlying EBIT loss was $30.8 million, but this was an improvement on the $39.5 million loss a year earlier.

"Based on current market conditions, all fundamental business metrics are in place for the group to report a profit for the 2016 financial year and deliver a return on invested capital in line with its cost of capital," says Borghetti.

"However, due to current market conditions, we are not able to provide more specific guidance at this time."



Latest News

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter