It seems the sky is not falling......
Virgin Blue flags breakeven year
Steve Creedy, Aviation Writer |
August 27, 2009
Article from:
The Australian
VIRGIN Blue expects to break even this financial year after posting an expected full-year net loss of $160 million.
The results, which were in line with figures revealed at the start of the
airline’s recent equity raising, produced an underlying net loss of $13 million for the year ended June 30 as the airline faced its toughest operating environment yet.
Virgin said in its outlook that strategic initiatives in the past 12 months had positioned the company to move quickly to benefit from any economic improvement.
“Notwithstanding further economic deterioration and based on current market conditions, the group result for FY10 is expected to be breakeven, with a positive group cash inflow (excluding proceeds from the recent equity raising),” it said.
Revenue at the group was up 12.8 per cent to $2.64 billion, but yields fell 5.3 per cent and operating expenses jumped 22 per cent, to $2.67bn, as the airline launched long-haul carrier V Australia and expanded its fleet.
But Virgin’s short-haul operations proved resilient with yields falling just 2.4 per cent, passenger revenues rising 9.9 per cent and the load factor declining just 0.5 points to 79.2 per cent.
Chief executive Brett Godfrey said: “While airlines have been variously impacted by the global economic crisis, our approach was to respond swiftly and definitively to softening domestic demand.
“Key strategies included redeployment of domestic capacity to short haul international routes, a programme of cost saving and productivity initiatives across the business and Virgin Blue’s first headcount reductions, achieved in consultation with our team.
“These measures achieved a 4.5 per cent reduction in overall group cost per available seat kilometre excluding fuel with the outstanding result in our short-haul operation where the unit cost was reduced for a second year in a row by a further 4.8 per cent.’’