Financial News

  • 17 May 2013, 10:42

Virgin Atlantic Plunges To Deeper Annual Loss

Virgin Atlantic has dived to a steeper annual loss - blaming tough economic conditions and the London 2012 Olympic Games.

The airline, founded by Sir Richard Branson, lost 93m in the year to the end of February, worse than the 80m loss it reported a year earlier.

Its group pre-tax loss was 69.9m after a one-off positive 35.4m exceptional item and 23.1m in other income was taken into account, it said.

Revenue increased by 5% to 2.87bn as 5.5 million passengers flew with the airline, 188,000 higher than in 2011/12.

Chief executive Craig Kreeger said: "Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel."

However Kreeger, who joined Virgin earlier this year from American Airlines, said he was confident the airline's financial performance would improve "considerably" in 2013/14 though it would not make a profit until the second quarter of 2015.

European carriers such as IAG's Iberia, Lufthansa and Air France-KLM are slashing jobs and shelving growth plans as they grapple with high fuel prices, a weak economy and fierce competition from low-cost carriers and Middle East airlines.

Late last year US carrier, Delta, bought a 49% stake in Virgin and announced plans to generate new revenue and build on Virgin's strong luxury brand.

Sir Richard maintains a 51% holding in the company.