Virgin Atlantic announced a pre-tax loss of GBP51 million for 2013 this morning but said it is making ‘strong progress’ for reaching profitability by the end of 2014.
The airline set out on a two-year recovery programme at the beginning of 2013 with last year’s loss showing a 50% improvement on the previous calendar year ending December 2012.
The airline has moved to a new financial reporting period to align with the calendar year and also revealed the 10-month period for March to December showed a GBP7 million pre-tax profit.
Group turnover increased 4.9% year-on-year with the airline’s load factor improving to 81.6%.
Virgin Atlantic carried more than 6.1 million passengers in 2013 with its premium economy number up 7.5% and upper class sales up 1.8%.
“The group has made good progress in 2013 towards our target of a return to profitability by the end of this year. We have implemented a programme of measures which put in place firm foundations for future success and our results to this point show that we are delivering against our plan,” said Craig Kreeger, chief executive. “Our strategy has been to focus on network, alliances and managing our cost base in a way which has not impacted on the customer. For example, use of a new fuel management system delivered savings of GBP8m in a single year. We have also increased our revenues and passenger numbers, which is the result of both a committed workforce providing exceptional customer service and a loyal customer base with high advocacy. We’re thrilled with the response we’re seeing from our customers.”
Virgin Atlantic will begin to see the full benefits of its joint venture with Delta this year while its domestic operation Little Red celebrated its first birthday earlier this month.
“Going forward, the impact from our Delta relationship which greatly enhances our revenue opportunities in the US, improving result from Little Red services and improvements in selling activity, supported by a strong focus on managing the cost base and on fuel efficiency gains, mean we are confident that we will deliver on our target and return to profitability,” said Kreeger.
What’s next for Virgin Atlantic?
Soon: New uniforms designed by Vivienne Westwood will be rolled out
22 June 2014: Marks 30 years of Virgin Atlantic’s first flight, which flew from Gatwick to Newark
Autumn 2014: WiFi roll-out; expanded use for devices in flight and new service training for staff